2016 (10) TMI 119 - HC - Central Excise

Restoration of appeal - Tribunal dismissed the appeal for non-prosecution and restored it to file on the condition of deposit of Rs. 6 lacs with a direction to dismiss the appeal for non-prosecution or non-compliance of the provisions of section 35F of the Central Excise Act 1944 - Held that - in the light of the wording of the provision and when that provision did not empower the tribunal to dismiss the appeal without adjudication on merits that we have set aside the impugned order to the extent it dismisses the appeal without adjudication on merits. If the appellant/assessee before the tribunal now desires that Appeal No. E-841 of 2012 should be heard on merits and in accordance with law then it must deposit a sum of Rs. 6 lacs within a period of two weeks from today. If that condition is complied with and compliance is reported the tribunal shall restore the appeal of the assessee to its file and decide it in accordance with law. In the event this condition is not complied with the tribunal s order stands and the assessee will not have any opportunity of hearing of the appeal on merits. - Appeal disposed of

Summary

Issues:
1) Restoration of appeal for hearing on merits.
2) Compliance with deposit condition under section 35F of the Central Excise Act, 1944.

Analysis:
1) The High Court found that the tribunal should have restored the appeal of the assessee for genuine reasons. The tribunal's order was quashed, but it was clarified that the restoration application filed by the assessee was indeed granted. The appeal was initially dismissed for non-prosecution, and upon restoration, a condition of depositing Rs. 6 lakhs was imposed. The High Court set aside the direction to dismiss the appeal for non-prosecution or non-compliance with section 35F of the Central Excise Act, 1944. The court emphasized that the tribunal lacked the power to dismiss the appeal without adjudication on merits, as per the provision of section 35F.

2) The court held that the assessee must comply with the deposit condition of Rs. 6 lakhs within two weeks for the appeal to be restored and heard on merits. Failure to comply would result in the tribunal's order standing, depriving the assessee of the opportunity for a hearing on merits. The court highlighted that the assessee had not challenged the restoration order or the deposit condition previously. Therefore, compliance with the deposit condition was deemed necessary for the appeal to proceed. The court disposed of the appeal with these directions and waived costs considering the appellant's financial position.