Window Glass Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. this appeal arose out of an elaborate order passed by commissioner (appeal) on 18.02.2005 considering that he was handicapped to grant adjournment beyond three times by virtue of first proviso to section 35(ia) of the central excise act, 1944. while deciding the matter ex-parte he relied on the document available on record and order of adjudication was upheld.2. in the previous occasion of hearing on 09.02.2007 the grievance of the appellant was that natural justice was violated for which the appellant was prevented to lead its defence. while it has merit and fair chance of success it should not be debarred from due process of justice. it was considered proper to allow them an opportunity for appearance before the ld. commissioner and reconcile the stock discrepancy. upon such exercise the outcome thereof was called for reporting by the ld. commissioner (appeal).3. when the matter was called on 07.05.2007 it was submitted by the ld.dr that there was no instruction to him on the outcome of the direction given by the tribunal on 09.02.2007. therefore, he submitted that the matter may be decided on its own merit according to law. however, he pleaded that when the appellant failed to take proper chance for its defence in three occasions, they are not prevented to lead their evidence before this forum for redressal of wrong done to them.4. the ld. counsel appearing for the appellant submitted that although he filed a copy of order dated 09.02.2007 conveying direction of the tribunal to the ld. commissioner (appeals), he was informed that the matter shall be fixed for hearing in due course. but so far nothing has been done.5. it is needless to mention that judicial discipline demands that the authorities below should carry out the directions of the higher court following the decision of the hon'ble supreme court in kamalakshi finance 1991 (55) e.l.t. 433 (s.c). in para 6 of the judgment hon'ble court held as under: 6. sri reddy is perhaps right in saying that the officers were not actuated by any malafides in passing the impugned orders. they perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the revenue would suffer. but what sri reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mal fides but with the fact that the officers, in reaching their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the collector (appeals) and the other of the tribunal. the high court has, in our view, rightly criticised this conduct of the assistant collector and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate heirarchy. it cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. the order of the appellate collector is binding on the assistant collectors working within his jurisdiction and the order of the tribunal is binding upon the assistant collectors and the appellate collectors who function under the jurisdiction of the tribunal. the principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. the mere fact that the order of the appellate authority is not "acceptable" to the department- in itself an objectionable phrase- and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. if this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.6. in view of the ld. counsel's submission in para 4 aforesaid, he was directed to ascertain and apprise the position on 08.05.2007. on 08.05.2007 ld. sr. counsel mr. khaitan appeared and submitted that there was no difficulty on the part of the ld. commissioner (appeal) to carry out the direction of the tribunal but in view of pressure of work and certain technical difficulties the matter could not be disposed.however, if the matter is remanded, the appellant shall get opportunity to explain its case to the learned appellate authority below. he argued that violation of natural justice touches root of the matter and if the same is violated the proceeding in sequence shall also be void.therefore the matter in controversy which requires thorough examination of evidence by the process of reconciliation and appreciation of evidence being sine qua non it would be proper if the appellant is given an opportunity to submit its entire defence before the ld.appellate authority below.8. particularly at page 6, the ld. appellate authority below was actually handicapped on appreciation of the provision of section 35(ia) of the central excise act, 1944 that he had no power to grant adjournment beyond three times. ld. sr. counsel submitted that a stay order was passed on 16.12.04 directing pre-deposit of certain amount and comply within 10 days of the receipt of the stay order passed by the ld. commissioner (appeal). that stay order having been passed on 16.12.2004, page 6 of the appeal order shows that there was only one hearing fixed thereafter for hearing the appeal and such date was 11.01.2005. the second hearing date was 07.02.2005. therefore, there was no third occasion of hearing for the ld. commissioner (appeal).however without dialating the matter further, the only need is to secure end of justice.9. in view of aforesaid factual background, it would be proper for the learned commissioner (appeals) to hear the matter and decide the issue involved a-fresh, granting fair opportunity of hearing to the appellant, to meet the end of justice.

Judgment:
1. This appeal arose out of an elaborate order passed by Commissioner (Appeal) on 18.02.2005 considering that he was handicapped to grant adjournment beyond three times by virtue of first Proviso to Section 35(IA) of the Central Excise Act, 1944. While deciding the matter ex-parte he relied on the document available on record and order of adjudication was upheld.2. In the previous occasion of hearing on 09.02.2007 the grievance of the Appellant was that natural justice was violated for which the appellant was prevented to lead its defence. While it has merit and fair chance of success it should not be debarred from due process of justice. It was considered proper to allow them an opportunity for appearance before the ld. Commissioner and reconcile the stock discrepancy. Upon such exercise the outcome thereof was called for reporting by the ld. Commissioner (Appeal).

3. When the matter was called on 07.05.2007 it was submitted by the ld.DR that there was no instruction to him on the outcome of the direction given by the Tribunal on 09.02.2007. Therefore, he submitted that the matter may be decided on its own merit according to law. However, he pleaded that when the appellant failed to take proper chance for its defence in three occasions, they are not prevented to lead their evidence before this forum for redressal of wrong done to them.

4. The ld. Counsel appearing for the appellant submitted that although he filed a copy of order dated 09.02.2007 conveying direction of the Tribunal to the ld. Commissioner (Appeals), he was informed that the matter shall be fixed for hearing in due course. But so far nothing has been done.

5. It is needless to mention that judicial discipline demands that the authorities below should carry out the directions of the Higher Court following the decision of the Hon'ble Supreme Court in Kamalakshi Finance 1991 (55) E.L.T. 433 (S.C). In Para 6 of the judgment Hon'ble Court held as under: 6. Sri Reddy is perhaps right in saying that the officers were not actuated by any malafides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mal fides but with the fact that the officers, in reaching their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collector and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate heirarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department- in itself an objectionable phrase- and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.

6. In view of the ld. Counsel's submission in para 4 aforesaid, he was directed to ascertain and apprise the position on 08.05.2007. On 08.05.2007 ld. Sr. Counsel Mr. Khaitan appeared and submitted that there was no difficulty on the part of the ld. Commissioner (Appeal) to carry out the direction of the Tribunal but in view of pressure of work and certain technical difficulties the matter could not be disposed.

However, if the matter is remanded, the appellant shall get opportunity to explain its case to the learned Appellate Authority below. He argued that violation of natural justice touches root of the matter and if the same is violated the proceeding in sequence shall also be void.

Therefore the matter in controversy which requires thorough examination of evidence by the process of reconciliation and appreciation of evidence being sine qua non it would be proper if the appellant is given an opportunity to submit its entire defence before the ld.Appellate Authority below.

8. Particularly at page 6, the ld. Appellate Authority below was actually handicapped on appreciation of the provision of Section 35(IA) of the Central Excise Act, 1944 that he had no power to grant adjournment beyond three times. Ld. Sr. Counsel submitted that a Stay order was passed on 16.12.04 directing pre-deposit of certain amount and comply within 10 days of the receipt of the Stay order passed by the ld. Commissioner (Appeal). That Stay Order having been passed on 16.12.2004, page 6 of the appeal order shows that there was only one hearing fixed thereafter for hearing the appeal and such date was 11.01.2005. The second hearing date was 07.02.2005. Therefore, there was no third occasion of hearing for the ld. Commissioner (Appeal).

However without dialating the matter further, the only need is to secure end of justice.

9. In view of aforesaid factual background, it would be proper for the learned Commissioner (Appeals) to hear the matter and decide the issue involved a-fresh, granting fair opportunity of hearing to the Appellant, to meet the end of justice.