M/S. Bhagwati Steels Inds. Vs. Cce, Chandigarh - Court Judgment

Excerpt:
1. the present stay application filed by the appellants arises out of the appeal bearing no.e/73/2001-nb filed against the impugned order dated 31.8.2000 passed by the commissioner of central excise (appeals) who dismissed their appeal under section 35-f of the central excise act for non-compliance with the stay order dated 20.6.2000.2. the learned counsel for the appellants has contended that the appellant's application for modification of the stay order was never considered by the commissioner(appeals) before passing the impugned order section 35-f of the act and as such the waiver of the pre-deposit of the duty amount deserves to be allowed for the purposes of hearing of the present appeal. on the other hand, the learned sdr contended that on failure of the appellants to comply with the stay order of the commissioner (appeals), the appeal of the appellants had been rightly dismissed under section 35-f of the act.4. the perusal of the record shows that the appellants were, no doubt, directed to make pre-deposit of duty amount of rs.6 lakhs which was confirmed on them through the order in original by the assistant commissioner. the time granted to them for this pre-deposit was 15 days. but they moved an application for modification of the stay order before the commissioner(appeals) and that application was never considered by the commissioner(appeals) before dismissing their appeal under section 35-f of the act. apparently, the impugned order had been passed in violation of the principles of natural justice. therefore, prima facie, the appellants have a good case and equity and balance of convenience are also in their favour. therefore, we allow the waiver of the entire duty amount for the purpose of hearing of the appeal.5. we with the consent of both the sides, we also proceed to decide the appeal on merits.6. the appeal of the appellants through the impugned order, was dismissed by the commissioner(appeals) without going into the merits.he dismissed the appeal only under section 35-f on account of their failure to make pre-deposit of the duty amount of rs.6 lakhs. but this order apparently cannot be sustained for he simple reason that the appellants' application for modification of the stay order was never considered by the commissioner(appeals). even before passing the impugned order, the commissioner(appeals) did not hear the appellants in order to get their explanation for non-compliance with the stay order. therefore, the impugned order has been passed in violation of the principles of natural justice and as such cannot be legally sustained.7. in view of the discussion made above, the impugned order of the commissioner(appeals) is set aside and the matter is sent back to the commissioner(appeals) for hearing the modification application of the appellants and thereafter their appeal subject to the compliance, if any, after affording opportunity of hearing to them appellants.8. consequently, the appeal of the appellants is allowed by way of remand.

Judgment:
1. The present stay application filed by the appellants arises out of the appeal bearing No.E/73/2001-NB filed against the impugned order dated 31.8.2000 passed by the Commissioner of Central Excise (Appeals) who dismissed their appeal under Section 35-F of the Central Excise Act for non-compliance with the stay order dated 20.6.2000.

2. The learned counsel for the appellants has contended that the appellant's application for modification of the stay order was never considered by the Commissioner(Appeals) before passing the impugned order Section 35-F of the Act and as such the waiver of the pre-deposit of the duty amount deserves to be allowed for the purposes of hearing of the present appeal. On the other hand, the learned SDR contended that on failure of the appellants to comply with the stay order of the Commissioner (Appeals), the appeal of the appellants had been rightly dismissed under Section 35-F of the Act.

4. The perusal of the record shows that the appellants were, no doubt, directed to make pre-deposit of duty amount of Rs.6 lakhs which was confirmed on them through the order in original by the Assistant Commissioner. The time granted to them for this pre-deposit was 15 days. But they moved an application for modification of the stay order before the Commissioner(Appeals) and that application was never considered by the Commissioner(Appeals) before dismissing their appeal under Section 35-F of the Act. Apparently, the impugned order had been passed in violation of the principles of natural justice. Therefore, prima facie, the appellants have a good case and equity and balance of convenience are also in their favour. Therefore, we allow the waiver of the entire duty amount for the purpose of hearing of the appeal.

5. We with the consent of both the sides, we also proceed to decide the appeal on merits.

6. The appeal of the appellants through the impugned order, was dismissed by the Commissioner(Appeals) without going into the merits.

He dismissed the appeal only under Section 35-F on account of their failure to make pre-deposit of the duty amount of Rs.6 lakhs. But this order apparently cannot be sustained for he simple reason that the appellants' application for modification of the stay order was never considered by the Commissioner(Appeals). Even before passing the impugned order, the Commissioner(Appeals) did not hear the appellants in order to get their explanation for non-compliance with the stay order. Therefore, the impugned order has been passed in violation of the principles of natural justice and as such cannot be legally sustained.

7. In view of the discussion made above, the impugned order of the Commissioner(Appeals) is set aside and the matter is sent back to the Commissioner(Appeals) for hearing the modification application of the appellants and thereafter their appeal subject to the compliance, if any, after affording opportunity of hearing to them appellants.

8. Consequently, the appeal of the appellants is allowed by way of remand.