TMI Blog2011 (3) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... ey having failed to make out satisfactory case for modification of the said orders, the impugned orders came to be passed. Thus it can not be said that absolutely no hearing was granted on the issue regarding the requirement of pre-deposit of the amount due and payable under the order passed by the adjudicating authorities. - E/2094 of 2010, 3670 of 2010, 3737 of 2010 & 3759 of 2010 - 293-296/2011-EX(PB) - Dated:- 15-3-2011 - Shri Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ. Appearance: Rep. by Sh. R.S. Sharma, Advocate for the appellants. Rep. by Sh. Sunil Kumar, DR for the respondent. Per: Shri Justice R.M.S. Khandeparkar: These appeals have been heard pursuant to the order passed in Stay application Nos. 2004, 3475, 3548 3579 of 2010 respectively. 2. We have heard the learned Advocate for the appellants and learned SDR for the respondents. 3. In all these three appeals the common question of law is sought to be raised as to whether Section 35F of the Central Excise Act, 1944 excludes personal hearing or it is necessary for the Commissioner (Appeals) to grant hearing to the appellants before disposal of the applications for dispensing with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while appropriating an amount of Rs. 486500/- already deposited by the party and also ordered payment of interest on the said amount of duty, besides imposing equal amount of penalty. Further, 27775.00 kgs. plastic granules valued at Rs. 26,94,175/- were ordered to be confiscated while giving option to redeem the same on payment of redemption fine of Rs. 675000/- and further, penalty of Rs. 388501/- was also imposed under Rule 15(1) of the Cenvat Credit Rules, 2004. Being aggrieved, the appellants filed appeal before the Commissioner (Appeals) alongwith application for dispensing with the requirement of pre-deposit. The said application was disposed of by an order dated 01.06.2010 directing deposit of the 50% of the entire amount of penalty within two weeks from the receipt of the copy of the said order. The party, however, did not deposit the amount but under its letter dated 14.06.2010 submitted that their financial conditions were very poor and they were facing acute financial hardship and, therefore, requested for modification of the said order. The appellants were heard in person on 09.08.2010 when Shri G.K. Dhusia, Consultant appeared on behalf of the appellants. The Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the tune of Rs. 2,51,104/- with interest and imposed equal amount of penalty. Being aggrieved, the appellants preferred appeal before the Commissioner (Appeals) alongwith the application for dispensing with the requirement of pre-deposit. The said application was disposed of by an order dated 24.05.2010 directing the appellants to deposit 50% of the entire amount of duty and penalty imposed under the adjudicating order dated 19.11.2009 within two weeks from the receipt of the copy of the order. The appellants did not comply with the said order but filed an application on 03.06.2010 for modification of the order dated 25.05.2010 while submitting that their financial position was pathetic and they were facing financial hardship. The appellants were heard in person through their representative Shri G.K. Dhusia on 18.08.2010. As there was default without any justification, the appeals came to be dismissed by the impugned order dated 25.08.2010. 8. The common grounds in all these appeals is that the Commissioner (Appeals) disposed of the applications for dispensing with the requirement of pre-deposit without affording opportunity of being heard in person and, therefore, the initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 351 (Del.), a Board Circular No. 450/16/99-CX dated 30.03.1999. 10. Section 35F of the Central Excise Act, 1944 deals with the subject of deposit, pending the appeal. It provides that where in an appeal under Chapter VIA, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under the said Act and the person is desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. The first proviso to Section 35F provides that where in a case the Appellate Authority is of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, such authority may dispense with such deposit subject to such conditions as he may deem fit to impose so as to safeguard the interests of revenue. The second proviso provides that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, held that #the Courts cannot insist that under all circumstances and under different statutory provisions personal hearing have to be afforded to the persons concerned. If this principle affording personal hearing is extended whenever statutory authorities are vested with the power to exercise discretion in connection with statutory appeals, it shall lead to chaotic conditions. Many statutory appeals and the applications are disposed of by the competent authorities who have been vested with the powers to dispose of the same. Such authority which shall be deemed to be quasi-judicial authorities are expected to apply their judicial mind over the grievances made by the appellants or applicants concerned, but it cannot be held that before dismissing such appeals or applications in all events the quasi-judicial authorities must hear the appellants or the applicants, as the case may be. When principles of natural justice require an opportunity to be heard before an adverse order is passed on any appeal or application, it does not in all circumstances mean a personal hearing. The requirement is complied with by affording an opportunity to the person concerned to present his case before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit unconditionally or has dispensed with such deposit subject to some conditions without hearing the appellant, the appeal of the petition filed on behalf of the appellant for the said purpose, the order itself is vitiated and liable to be quashed being violative of principles of natural justice . 14. Applying the law laid down by the Apex Court in the above decision to the proceedings under Section 35F of the said Act, it can certainly be said that no appellants is entitled to be heard on merits in appeal unless he complies with his obligation regarding pre-deposit in terms of Section 35F of the said Act. The provision of law in that regard specifically provides that the appellants #shall# deposit the amount demanded under the adjudicating order. It includes the duty amount, the interest thereon and the penalty. It is only by way of proviso to the said provision of law, a discretion of power has been vested in the Appellate authority to dispense with the requirement of such deposit subject to condition as it may impose bearing in mind the undue hardship which the assessee may suffer in case of deposit of the entire amount being ordered as well as to safeguard the interest of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the principles of fair hearing. However, while deciding the matter, the Hon'ble High court has made a very relevant observation regarding the matters which were under consideration before the High Court. In para 82 of the decision it has been specifically observed that #Individual orders which is being challenged also, it has to be pointed out without contradiction that the Commissioner (Appeals) had passed a stereotyped chamber orders without much strain and without reference to the merits of the case as well as the financial conditions and surrounding circumstances which might have weighed with him if he had afforded an opportunity or hearing and if he had been apprised of full facts, subsequent events in view of the time lag as well#. It was in those circumstances that ultimately orders without hearing were held to be bad in law. That was a decision in peculiar facts of the case before the Hon'ble High Court. 17. The Punjab and Haryana High Court in Fashion Fair case has observed that #in the scheme of a taxing stature, unless expressly or by necessary implication exclude, personal hearing is desirable at the appellate stage, though the effect of denial of opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
