1. There is a delay of 25 days in filing the appeal, for which a condonation application has been moved. Shri Bharat, the Id. advocate pleaded that the impugned order was received by the appellants on 21.11.1986 and the appeal ought to have been filed on or before 21.2.1987. But the appeal was filed on 18.3.1987. The delay is mainly on account of the fact that their General Manager, Shri Nadkarni, looking after excise matters, died on 13.11.1986 and the factory was taken over by the Receiver and hence was closed since 1982 onwards.
Hence normal working was disrupted. Shri Mondal, however stated that even, when the order was received, the factory was closed and it is reported to be closed till date. Hence, this is not a satisfactory explanation. After hearing both the sides, we observe that during the material period, the General Manager of the firm died and this could have caused disruption in the normal working even in the administrative office and hence, we take a liberal view to condone the delay.
Accordingly we condoned the delay and proceeded to hear the appeal.
2. This is an appeal directed against the order of the Collector (Appeals) No. HN-634/B-III-181/86 dated 13.11.1986 rejecting the appellants' appeal for non fulfilment of Section 35F of the Central Excises Act. They were given an opportunity of hearing before the appeal was rejected by the Collector (Appeals). The present appeal is against the aforesaid order of the Collector (Appeals).
3. Shri Bharat, mainly pleaded that the order is not legally sustainable and he canvassed his arguments on points of law only. After he finished his arguments, we specifically asked whether the appellants plead any ground of financial hardship for considering the same so that the appellants could be put to such terms, which are financially viable for their compliance and the matter could be remanded to the Collector (Appeals) for considering their appeal on merits, on condition of compliance of such terms ordered by us. The Id. advocate stated that he could not make any offer and his appeal based on his legal argument may be considered for a decision. In other words, he desired for a ruling that the order passed by the Collector (Appeals) rejecting their appeal for non compliance of the condition of Section 35F is not legally correct and for issue of directions to the Collector (Appeals) for considering his appeal on merits, without invoking Section 35F.3A. We, therefore, propose to deal with his arguments. His arguments are mainly the following: (i) The Collector (Appeals) ought to have considered their appeal on merits, notwithstanding non-compliance of Section 35F by the appellants; Section 35 confers an unfettered right for filing the appeal. It is not subject to compliance of Section 35F. Compliance of Section 35F is neither a condition precedent nor a requirement for filing the appeal; (ii) At the time of issue of show cause notice for duty demand, Section 35F was not there. Section 35F came into force on 11.10.1982, whereas show cause notice for duty demand was issued prior to that date. Appeal, being a continuation of the proceedings on conclusion of adjudication, based on the show cause notice, (when Section 35F was not in the statute on the date of show cause notice), that Section cannot be invoked in this case.
On a query by this Bench, the Id. advocate, however, stated that when the order-in-original was passed and when they filed the appeal before the Collector (Appeals) the aforesaid section already come into being.
His argument was that since, at the time of initiation of proceedings for demanding duty by issue of show cause notice, Section 35F was not in the statute and hence the condition of Section 35F cannot be invoked in this case.
(iii) They have a vested right of appeal. This cannot be whittled down by the procedural law introduced in Section 35F subsequently.SC Hossein Kasam Dada v. State of Madhya Pradesh.
4. Shri Mondal, the Id. SDR for the respondent, while opposing the contentions of the advocate, stated the decision of Supreme Court in the cases of Vijaya Prakash D. Metha and Anr. v. Collector of Customs (P), Bombay , while interpreting the provisions of Section 129E of the Customs Act, identically worded as those found in Section 35F, have answered all these objections, now raised by the Id.
advocate and that decision has overriding effect over all other decisions. In this case, the question of filing appeal arises only after an order is passed to the detriment of the appellant and not at the stage of issue of show cause notice. Hence, even the so called inherent right to appeal arises only after the order-in-original is passed. It is conceded by the Id. advocate that when the order in original was passed and when they filed the appeal against that order, Section 35F was very much there in the statute. Hence, any such appeal filed is subject to the compliance of mandatory condition prescribed under Section 35F. The Appellate authority, under the proviso to Sac.
35F, may dispense with the condition, if he is of the opinion that it would cause undue hardship and prescribe such condition for safeguarding revenue. The appellants have indicated even before the Bench that they are not pleading any such ground and have not made any offer for safeguarding revenue. Hence, their appeal Is to be rejected in toto.
5. We have heard the submissions from both the sides and also looked into the citations made. Ref. citation 1983 ELT 1277 (SC) ECR C 589 SC, this relates to the provisions of Madhya Pradesh Sales Tax Act, where certain amendment was made prescribing condition of pre-deposit of Sales Tax assessed pending appeal and the proceeding for assessment of Sales Tax was initiated before the amendment. In this case, the Supreme Court considered the provisions of the Sales Tax Act of Madhya Pradesh in the context of the factual position of that case and held that there is a possibility of 'Lis' arising, as soon as proceedings started with the filing of return and at any rate when the authority Called for evidence and started the hearing and the right of appeal must be taken to have been in existence even on those dates. Much stress is laid by the Id. advocate on these observations in this judgment for contending that when Section 35F was not in existence on the date of show cause notice, it cannot be invoked. It is also pertinent to point out that the larger Bench of the Tribunal in the case of Amin Chand ' Pyarelal v. Collector of Cen. Excise-on a refcrehce arising out of Appeal No.ED(SB) No. 1761/83-B, held that Section 35F would be applicable in relation to appeals filed on or after 11.10.1982. We also observe that the Supreme Court in the case of Vijay Prakash Mehta and Anr. v.Collector of Custom (P), Bombay AIR 1988 (SC) 2017 : 1988 (18) ECR 369 (SC) : ECR C 1248 SC have held that Section 129E of the Customs Act (identically worded as Section 35F of the Central Excises Act) is required to be complied with and the authorities are justified legally in dismissing the appeal for non compliance of condition of Section 129E of the Customs Act In the Kerala High Court judgment in Ashoka Rubber Products the High Court held that in the Central Excises Act, there is no provision for dismissing the appeal for failure to deposit. However, in that case, the Supreme Court judgment in appears to have not been cited and 6. In the light of the aforesaid citations made before us, we now consider the legal issue involved in the present appeal.
The Supreme. Court in AIR 1988 (SC) 2010 : 1988 (18) ECR 369 (SC) : ECR C 1248 SC considered the Section 129E of the Customs Act, which is identically worded as Section 35F of the Central Excises Act. Some of the observations made by the Supreme Court in the above case are worthy of reproduction: Para 5 : The aforesaid Section provides a conditional right of appeal in respect of an appeal against the duty demanded or penalty levied. Although the Section does not expressly provide for rejection of the appeal for non-deposit of duty or penalty, yet it makes it obligatory on the appellant to deposit the duty or penalty, pending the appeal, failing which the Appellate Tribunal is fully competent to reject the appeal. See, in this connection, the observations of this Court in respect of Section 129 prior to substitution of Chapter XV by the Finance Act, 1980 in Navin Chandra Chhotelal v. Central Board of Excise & Customs The proviso however, gives power to the Appellate authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships. It is a matter of judicial discretion of the Appellate Authority.
Para 9: Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
Para 13: It is not the law that adjudication by itself following the rules of natural justice would be violative of any right constitutional or statutory, without any right of appeal, as such.
If the Statute gives a right to appeal upon certain conditions, it is upon fulfilment of these conditions that the right becomes vested and exercisable to the appellant. The proviso ;o Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a discretion vested in an obligation to act judicially and properly.
7. The above observations, set at rest any other arguments to the contrary that appeal cannot be dismissed for non compliance of Section 129E or Section 35F of the Central Excise Act. Hence, we do not propose to labour on the arguments canvassed by the Id. advocate to the contrary. The High Court of Kerala doe. not appear to have considered the decision of the Supreme Court and it was not cited before that Court.
8. Now coming to the question of applicability of Section 35F to this case, where proceedings by issue of show cause notice are staled to have been initiated prior to introduction of Section 35F, it is pleaded that they arc governed by the provisions of appeal, as they existed then at the time of issue of show cause notice. This issue is mainly agitated on the plank of the decision of the Supreme Court in Hossein Kasam Dada 1983 ELT 1277 (S.C.) : ECR C 589 SC. Firstly, we must observe that the above decision is in the context of Madhya Pradesh Sales Tax Act and it was not pleaded before us by citing the relevant provisions of that Sales Tax Act and comparing the same with the provisions of relating to Appeals under the Central Excises Act. But that as it may, the Supreme Court, in the latter judgment or considered the same argument in the context of the earlier judgment cited by the petitioner's counsel referring to the case of Hossein Kasam Dada v. State of Madhya Pradesh . The Supreme Court held that the right to appeal was granted with a condition and there was no question of change of that right and that right is subject to the condition of Section129E. Here in this case, also, when the order was passed against the appellant, he is to exercise the right of appeal conferred on him under the Central Excises Act. When he chose to exercise that right, he is to be governed by the provisions for filing appeal as laid down under that Act, as it existed at the time of passing the order, giving rise to the filing of appeal. It is not disputed before us that such a right is conferred on compliance of Section 35F, which was very much in the statute at the time of the passing of the order as well as at the time of filing the appeal. We arc also drawing support for the aforesaid view from the scheme of the Act as laid down. It is pertinent to note that while Section 11A for recovery of the short levy/non levy/erroneous refund is under Chapter II of the Central Excise Act, adjudications etc, arc dealt with under Chapter VI. Provisions for conferring the right of appeal are dealt within an exclusive Chapter VI-A, leaving thereby no ambiguity in concluding that in the case of Central Excise appeals, the right of appeal can be exercised only under the provisions of that Chapter and it arises only when any person is aggrieved by any decision or order, passed under the Act, by the concerned adjudicating authority. Thus, even from the scheme of the Act, it is evident that when a person is aggrieved by a decision or order, he has to take recourse to the relevant provisions of Chapter VI-A and when it is so, he cannot choose only Section 35 and docs not comply with Section 35F, even though both were in the said Chapter, at the time the order was passed and the person feels aggrieved by that order. Such a construction does not flow from the scheme of the Act itself. We were not taken to the relevant portion of Madhya Pradesh Sales Tax Act (considered by the Supreme Court), whether it analogous to the one in the Central Excise Act.
9. In view of this position, we are unable to persuade ourselves to agree to the contention of the Id. advocate that non compliance of Section 35F cannot be a ground for rejecting the appellants' appeal.
10. We were keen to remand the matter to Collector (Appeals) for considering the appeal on merits, on putting them to such terms as could be of easy compliance by them, having regard to their financial condition. The Id. advocate did not choose to agree to this, even on our specific enquiry. He pleaded that arguments on merits could be heard by this Bench. We were not agreeable to this proposition, because the appeal is only against the order of the Collector (Appeals) who rejected the appeal for non compliance of Section 35F without going into the merits. Hence, if their appeal on merits is to be heard on merits, it is to be done by Collector (Appeals). Since the appellant does not want to subject himself to Section 35F, we have no other alternative but to dismiss the appeal.
11. I fully concur with the findings arrived at by the Member (T). I however add that the larger bench of the CEGAT has in Amin Chand Pyarelal v. Collector of Customs, taken a view that provisions of Section 35F of Central Excises & Salt Act, would stand attracted to all the appeals filed on or after 11.10.1982. The said decision of the larger Bench operates as binding, more particularly when the same covers the same issue. Of course, the decision of the Supreme Court ought to prevail over all the decisions from any forum subordinate thereto, provided of course, the same covers the issue quite identical to the one there. The Id. Advocate for the appellants placed reliance on the decision of the Supreme Court in Hossein Kasam v. The State of Uttar Pradesh (sic), 1983 ELT 1277 : ECR C 589 SC, beside being a decision under Uttar Pradesh (sic) Sales Tax Act, could not render much assistance to him, as the said judgment was also examined by the Supreme Court, in its subsequent decision in Jaipraksah (sic) D. Mehta v. Collector of Customs AIR 1988 Supreme Court 2012 - 1988 (18) ECR 369 (SC) : ECR C 1248 SC, where the Supreme Court, while examining the provisions of Section 129E of the Customs Act, (similar to those in Section 35F of the CESA), has held in para 8 of the judgment that the substantive right is the one of filing an appeal, and if the Legislature in its wisdom, imposes any condition, the same being a mere alteration in the procedure, not directly affecting the right to file an appeal, could not tantamount to whittling out the right.
Viewing independently, the provisions of Section 35F are in the nature of imposition of same condition, retaining the existing right to appeal as undisturbed. I therefore, endorse the finding given by Brother R.Jayaraman.