National Productivity Council Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. this appeal is directed against the order of the commissioner (appeals) dismissing the appeal of the appellant for non-compliance of the provisions of section 35f of the central excise act. section 35 of the act mandates pre-deposit of duty and penalty in accordance with the order-in-original of the adjudicating authority.2. the appellant was directed to pre-deposit a sum of rs. 1,00,000/- in terms of the said provisions vide order dated 1.8.2007. the deposit was to be made by 10.8.2007 and the compliance was to be reported by 17.8.2007. as the circumstances would have it, the appellant deposited the amount but after expiry of time on 17.8.2007. compliance was reported on 28.8.2007. the commissioner (appeals) held that the order dated 1.8.2007 had not been complied with and accordingly dismissed the appeal by the impugned order.3. on behalf of the revenue, a preliminary objection was taken to the maintainability of this appeal on the ground that the necessary clearance from the committee on disputes (cod) in accordance with the decision of the supreme court in ongc v. cce as clarified by the order dated 7.1.1994, 4. having heard the learned counsel for the appellant and the learned departmental representative on the point i am satisfied that the said decision of the supreme court would not stand in the way of the appellant in the peculiar facts of this case. as per the clarificatory order dated 7.1.1994 (supra) the rationale of the decision in ongc case was to minimize the avoidable litigation without affecting the statutory remedies available to the party. this will be clear from the following observation: it is clear that order of this court is not to affect that nor can that be done-so far as union of india and its statutory corporations are concerned, the statutory remedies effaced. indeed, the purpose of the constitution of the high power committee was not to take away those remedies.... it is abundantly clear that the machinery contemplated is only to ensure that no litigation comes to court without the parties having had an opportunity of conciliation before an in-house committee....5. as far as the instant case is concerned, the commissioner (a) dismissed the appeal on the ground of non-compliance without going into the merits of the case. the only question for consideration in this appeal is whether he was justified in doing so. as merits of the case have not been looked into by the commissioner (appeals), it is clear that this tribunal would also not like to go into the same. if the tribunal comes to conclusion that commissioner (a) was not justified in dismissing the appeal on the ground of non-compliance, it would follow that the matter has to go back for decision on merits. this being the position, i am satisfied that the ratio of the decision of the supreme court aforesaid cannot be applied to the present case.6. coming to the sequence of events which led to dismissal of the appeal, it is clear that there was, at the worst, delay of only seven days in compliance of the order. i am inclined to think that the order had been substantially complied with. the commissioner (a) should in all fairness have condoned the delay by extending the period of compliance and treated the order to have been complied with as has been complied within the extended period, and decided the appeal on merits.the impugned order of the commissioner (appeals) in the circumstances is fit to be set aside.7. in this view of the matter, the requirement of pre-deposit of the amount in this appeal is dispensed with and the impugned order is set aside, and the matter is sent back to the commissioner (a) for decision on merits.

Judgment:
1. This appeal is directed against the order of the Commissioner (Appeals) dismissing the appeal of the appellant for non-compliance of the provisions of Section 35F of the Central Excise Act. Section 35 of the Act mandates pre-deposit of duty and penalty in accordance with the order-in-original of the adjudicating authority.

2. The appellant was directed to pre-deposit a sum of Rs. 1,00,000/- in terms of the said provisions vide order dated 1.8.2007. The deposit was to be made by 10.8.2007 and the compliance was to be reported by 17.8.2007. As the circumstances would have it, the appellant deposited the amount but after expiry of time on 17.8.2007. Compliance was reported on 28.8.2007. The Commissioner (Appeals) held that the order dated 1.8.2007 had not been complied with and accordingly dismissed the appeal by the impugned order.

3. On behalf of the Revenue, a preliminary objection was taken to the maintainability of this appeal on the ground that the necessary clearance from the Committee on Disputes (COD) in accordance with the decision of the Supreme Court in ONGC v. CCE as clarified by the order dated 7.1.1994, 4. Having heard the learned Counsel for the appellant and the learned Departmental Representative on the point I am satisfied that the said decision of the Supreme Court would not stand in the way of the appellant in the peculiar facts of this case. As per the clarificatory order dated 7.1.1994 (supra) the rationale of the decision in ONGC case was to minimize the avoidable litigation without affecting the statutory remedies available to the party. This will be clear from the following observation: It is clear that order of this court is not to affect that nor can that be done-so far as Union of India and its statutory corporations are concerned, the statutory remedies effaced. Indeed, the purpose of the constitution of the High Power Committee was not to take away those remedies.... It is abundantly clear that the machinery contemplated is only to ensure that no litigation comes to Court without the parties having had an opportunity of conciliation before an in-house Committee....

5. As far as the instant case is concerned, the Commissioner (A) dismissed the appeal on the ground of non-compliance without going into the merits of the case. The only question for consideration in this appeal is whether he was justified in doing so. As merits of the case have not been looked into by the Commissioner (Appeals), it is clear that this Tribunal would also not like to go into the same. If the Tribunal comes to conclusion that Commissioner (A) was not justified in dismissing the appeal on the ground of non-compliance, it would follow that the matter has to go back for decision on merits. This being the position, I am satisfied that the ratio of the decision of the Supreme Court aforesaid cannot be applied to the present case.

6. Coming to the sequence of events which led to dismissal of the appeal, it is clear that there was, at the worst, delay of only seven days in compliance of the order. I am inclined to think that the order had been substantially complied with. The Commissioner (A) should in all fairness have condoned the delay by extending the period of compliance and treated the order to have been complied with as has been complied within the extended period, and decided the appeal on merits.

The impugned order of the Commissioner (Appeals) in the circumstances is fit to be set aside.

7. In this view of the matter, the requirement of pre-deposit of the amount in this appeal is dispensed with and the impugned order is set aside, and the matter is sent back to the Commissioner (A) for decision on merits.