TMI Blog1998 (4) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of manufacture of paper based decorative laminated sheets. Petitioner No. 2 is a Director and shareholder of petitioner No. 1-Company. The Commissioner of Central Excise, Ahmedabad i.e. respondent No. 3 by an Order-in-Original dated February 2, 1987 confirmed certain duty liability and imposed penalty. The petitioners, therefore, filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi ("CEGAT" for short) with an application praying to stay the order passed by respondent No. 3. The CEGAT by an interim order stayed the order passed by respondent No. 3 on certain terms and conditions. The hearing of the appeal was fixed before CEGAT on July 26, 1996. The appellants had forwarded written submissions to be considered while hearing the appeal on merits. It is the case of the petitioners that written submissions so forwarded by the petitioners were not put in the concerned file by the registry of the Tribunal. When the appeal was called out for final hearing on July 26, 1996, the petitioners were not present. The CEGAT, therefore, dismissed the appeal for default of appearance of the petitioners. The petitioners thereafter filed an application for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 1068. Under the circumstances, by filing these petitions under Article 226 of the Constitution, the petitioners have prayed to issue a writ of mandamus or any other appropriate writ, direction or order to strike down Rule 20 of Customs, Excise Gold (Control) Appellate Tribunal (Procedure) Rules, 1982. The petitioners have also prayed to issue a writ of mandamus or any other appropriate writ or order directing CEGAT to make a rule providing that appeal shall be decided on merits even if appellant does not remain present on the date on which appeal is fixed for hearing before CEGAT. The petitioners have further prayed to issue a writ, order or direction permanently prohibiting the CEGAT from dismissing any appeal for non-appearance of the appellant. The respective petitioners have also prayed to quash and set aside the orders passed by CEGAT dismissing their appeals for default as well as orders rejecting applications for restoration of appeals on file. 4.Though the respondents are duly served, no affidavit-in-reply has been filed by any of the respondents in any petition controverting the statements made in the petitions. 5.In order to decide the question posed for considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od. The manner and method of disposing of appeal filed before the Appellate Tribunal is provided in Section 129B of the Customs Act and Section 129B(1) which is relevant for our purpose reads as under :- "129B(1):The Appellate Tribunal may; after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary." 7.The powers, functions and duties of the Appellate Tribunal are set out in Sections 129A, 129B and 129C of the Customs Act as well as Sections 35B, 35C and 35D of the Excise Act. Sub-section (1) of Section 35B as well as sub-section (1) of Section 129A of the Customs Act give a right to the assessee and the Commissioner to appeal to the Appellate Tribunal against the order passed by the Commissioner of Central Excise or Commissioner (Appeals) or against the order of Collector of Customs as the case may be. Sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear. As observed in Hukumchand Mills Ltd. v. Commissioner of Income-Tax - (1967) 63 I.T.R. 232 (S.C.), the word "thereon" restricts the jurisdiction of the Tribunal to the subject matter of the appeal. Therefore, the words "pass such orders as the Tribunal thinks fit" will include all the powers which are conferred on Commissioner of Central Excise or Commissioner (Appeals) under the provisions of the Excise Act or Collector of Customs under the provisions of the Customs Act. The provisions about making a reference on questions of law to the High Court will be rendered nugatory if any such power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default, without making any order thereon in accordance with Section 35C(1) of the Excise Act or Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application for an adjournment. On August 28, 1958, the appeal was dismissed by the Tribunal for default of appearance. After disposal of the appeal, the assessee had filed a petition before Appellate Tribunal praying for its restoration. However, that application was dismissed. The assessee thereupon had applied for a reference under Section 66(1) of the Act on two questions of law, but that application was also rejected by the Tribunal. The assessee, therefore, approached the High Court under Section 66(2) of the Act. The High Court directed the Tribunal to state the case on two questions. The Special Bench constituted to hear the reference, reframed the question as under :- "Whether Rule 24 of the Appellate Tribunal Rules, 1946, in so far as it enables the Tribunal to dismiss an appeal for default of appearance, is ultra vires?" The Special Bench, after examining the provisions of the Act, came to the conclusion that Rule 24 of the Appellate Tribunal Rules, insofar as it enabled the Tribunal to dismiss an appeal for default of appearance, was ultra vires. Thereupon the matter was carried to the Supreme Court. The Supreme Court on interpretation of the word "thereon" appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass any order which the circumstances of the case required. It was immaterial whether the opportunity of being heard had been availed of by the party or not. This provision, it was held, did not make it obligatory for the Appellate Tribunal to dispose of the appeal on merits. In this case again there was hardly much discussion and the Allahabad decision was simply followed. In Mangat Ram Kuthiala v. Commissioner of Income-tax, the points raised were different and arose in a petition filed under Articles 226 and 227 of the Constitution. it does not appear that the validity of Rule 24 was convassed. The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of Section 33(4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation : "How can it be said that the Tribunal should seek for advice on a question which it was not called upon to consider and in respect of which it had no opportunity of deciding whether the decision of the Court should be sought?" Thus, looking at the substantive provisions of the Act there is no escape from the conclusion that under Section 66(4) of the Appellate Tribunal has to dispose of the appeal on the merits and cannot short-circuit the same by dismissing it for default of appearance. Now, although Rule 24 provides for dismissal of an appeal for the failure of appellant to appear, the rules at the material time did not contain any provision for restoration of the appeal. Owing to this difficulty some of the High Courts had tried to find an inherent power in the Tribunal to set aside the order of dismissal (vide Shri Bhagwan Radha Kishan v. Commissioner of Income-tax and Mangat Ram Kuthiala v. Commissioner of Income-tax). There is a conflict of opinion among the High Courts whether there is any inherent power to restore an appeal dismissed for default under the Civil Procedure Code (Mulla, Civil Procedure Code, Volume II, page 1583, 1584). It is unnecessary to resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has got to be disposed of on merits and not for default of appearance of the appellant. Thus, the Appellate Tribunal has to decide the issue `ex parte', but dismissing appeal for non-appearance does not seem to be legally or even on equity grounds, correct when the Supreme Court in J.K. Synthetics Ltd. v. CCE, 1996 (86) E.L.T. 472 has held that an appeal decided ex parte can be recalled and heard afresh if appellant shows sufficient cause for his absence. Therefore, that part of Rule 20 which enables the Appellate Tribunal to dismiss an appeal for default of appearance will have to be struck down. 10.The submission that Rule 20 of the Rules empowers the Appellate Tribunal to restore an appeal which has been dismissed for default on sufficient ground being made out and, therefore, that part of the Rule 20 which enables the Appellate Tribunal to dismiss the appeal for default of appearance should not be declared ultra vires, has no substance. It is true that the Tribunal's powers in dealing with appeals are of the widest amplitude and the Appellate Tribunal is competent to set aside an order dismissing an appeal for default if sufficient cause is made out by the appellant. How ..... X X X X Extracts X X X X X X X X Extracts X X X X
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