(2010) 43 SITC 254 (Mum)

 

[IN THE HIGH COURT OF MUMBAI]

 

HON'BLE F.I. REBELLO & HON'BLE D.G. KARNIK, JJ

 

M/s. Chemipol Pioneer Vs. UOI

 

Central Excise Appeal No. 62 of 2009

 

Shri Ashok Shetty with Shri R.V. Shetty and Ms. Rita K. Joshi, Advocates for the

Appellant.

 

Shri P.S. Jetly, Advocate for the Respondents.

 

Dated 17.9.2009.

 

APPEAL(TRIBUNAL)-ABSENCE OF APPELLANT-

 

RULE 20 OF THE CENTRAL AND EXCISE RULES, 1944.

 

HELD.

 

It is clear that though part of the Rule 20 of the Rules has been held to be

unconstitutional by the Delhi High Court relying upon the decision of the Supreme Court,

one cannot altogether lose sight of the rule that every court or Tribunal has an inherent

power to dismiss a proceeding for non prosecution when the petitioner/appellant before

it does not wish to prosecute the proceeding. In such a situation, unless the statute clearly

requires the court or Tribunal to hear the appeal/proceeding and decide it on merits it can

dismiss the appeal/proceeding for. Of course, the power must be exercised judiciously and

taking into consideration all the facts and circumstances of the case. The Tribunal

presently has its benches only at four or five places in India. An appellant who on account

of his place or residence or business being far away from the place of sitting for the

Tribunal may not except at a high cost be able to attend the hearing especially when as we

know that the matters are adjourned for several times. If the appellant files on record his

submissions in writing, the Tribunal must decide the appeal on merits on the basis of the

said submissions. In that case, the Tribunal would not have a power to dismiss the appeal

for but where the appellant in spite of notice is persistently absent and the Tribunal on

facts of the case is of the view that the appellant is not interested in prosecuting the appeal,

it can in exercise its inherent power to dismiss the appeal for non- prosecution. Of course,

the conclusion of the Tribunal that the appellant is not interested in prosecuting the appeal

must be reached on the facts of each case and not merely on account of absence of an

appellant on a solitary occasion.

 

In the present case, the Tribunal has dismissed the appeal on the absence of the

appellant only on one occasion. The fact that the appellant immediately thereafter applied

for restoration of the appeal shows his intention that he was interested in prosecuting the

appeal and may be he had a justifiable cause for his absence on one occasion. In the

circumstances, the Tribunal ought to have restored the appeal to the file.

 

The Tribunal ought to have corrected its mistake on being brought to its notice that

petitioner was interested in prosecuting the appeal and as such the Tribunal had no power

to dismiss the appeal for default. In the light of that, Tribunal ought not to have dismissed

the second application on a technical ground. For these reasons, the petition is allowed

and the matter is restored to file of the Tribunal.

 

Vital Point :

 

In the present case, the Tribunal has dismissed the appeal on the absence

of the appellant only on one occasion. The fact that the appellant

immediately thereafter applied for restoration of the appeal shows his

intention that he was interested in prosecuting the appeal and may be he

had a justifiable cause for his absence on one occasion. In the

circumstances, the Tribunal ought to have restored the appeal to the file.

 

JUDGMENT

 

1. This appeal is directed against the order dated 27th February 2006 passed by the

Customs, Central Excise and Services Tax Appellate Tribunal (for short the `Tribunal')

rejecting the application filed by the appellant for restoration of its appeal for non

prosecution.

2. The appellant had filed an appeal before the Tribunal bearing No. E/2822/98-Mum

challenging the order in original dated 30th April 1998 passed by the Commissioner of

Central Excise (Appeals). The appeal was posted for hearing on 25th May 2005. As the

appellant was absent, the Tribunal dismissed the appeal. Application filed by the

applicant for setting aside the order of dismissal for non prosecution was rejected by the

Tribunal. Hence the appeal.

3. Learned counsel for the appellant submitted that under the Central Excise Act,

1944 the Tribunal has no power to dismiss an appeal for default in appearance of an

appellant. Even if the appellant is absent, the Tribunal is required to decide the appeal

on merits. In support, learned counsel referred to and relied upon a decision of Gujarat

High Court in Viral Laminates Vs. Union of India, 1998 (100) E.L.T. 335 (Guj.) and

the decision of the Delhi High Court in Prakash Fabricators & Galvanizers (P) Ltd. Vs.

Union of India, 2001 (130) E.L.T 433 (Del.)

4. Per contra, Mr. Jetly, learned counsel for the Revenue, submitted that today all

Courts and Tribunals are flooded with litigation and there is a docket explosion of

unprecedented magnitude. When the Tribunal is not in a position to decide appeals and

other proceedings before it in a reasonable time, it would not be appropriate to burden

the Tribunal with the task of deciding appeals on merit when the appellant himself is

absent and/or is not interested in prosecuting the appeal. We should not shut our eyes

to the reality that if the Tribunal is required to spend its valuable time in deciding the

appeals on merits when the appellant is absent, then valuable time of the Tribunal would

be lost without hearing the other appeals which are pending since long. He further

submitted that in any event, in the absence of assistance from the appellant, the Tribunal

may be seriously handicapped in deciding an appeal on merits and the possibility of the

Tribunal deciding the appeal erroneously and laying down the law which may not be

fully correct. We should not therefore follow the view taken by the Gujarat and Delhi

High Courts but hold that a Tribunal can dismiss the appeal in default of appearance of

the appellant. While we see some merit in the submissions of Mr. Jetly, we are not

inclined to depart from the view taken by the two High Courts. No other High Court

has taken a different view. Secondly, the Gujarat High Court, for striking down Rule

20 of the Rules, has relied upon a decision of the Supreme Court in CIT Vs. S. Cheniappa

Mudaliar, AIR 1969 SC 1068, wherein the Supreme Court struck down Rule 34 of the

Income Tax (Appellate Tribunal) Rules, 1946 which was similar to Rule 20 of the Rules.

 

5. We would however refer to the observations of Hidayatullah, Chief Justice (as

His Lordship then was) in Sunderlal Mannalal Vs. Nandramdas Dwarkadas AIR 1958

MP 260 wherein it was observed :

"Now the Act does not give any power of dismissal. But it is axiomatic that no

court or tribunal is supposed to continue a proceeding before it when the party

who has moved it has not appeared nor cared to remain present. The dismissal,

therefore, is an inherent power which every tribunal possesses....."

 

This statement of law was approved by the Supreme Court in Dr. P. Nalla Thampy

Thera Vs. B.L. Shankar 1984 (Supp) SCC 631. Again in New India Assurance Co. Ltd.

Vs. R. Srinivasan (2000) 3 SCC 242, the Supreme Court observed at paragraph No. 18:

 

"That every court or judicial body or authority, which has a duty to decide a list

between two parties, inherently possesses the power to dismiss a case in default.

Where a case is called up for hearing and the party is not present, the court or

the judicial or quasijudicial body is under no obligation to keep the matter

pending before it or to pursue the matter on behalf of the complainant who had

instituted the proceedings. That is not the function of the court or, for that matter

of a judicial or quasi judicial body. In the absence of the complainant, therefore,

the court will be will within its jurisdiction to dismiss the complaint for non

prosecution. So also, it would have the inherent power and jurisdiction to restore

the complaint on good cause being shown for the non-appearance of the

complainant."

 

6. It is thus clear that though part of the Rule 20 of the Rules has been held to be

unconstitutional by the Delhi High Court relying upon the decision of the Supreme

Court, we cannot altogether lose sight of the rule that every court or tribunal has an

inherent power to dismiss a proceeding for non prosecution when the petitioner/appellant before it does not wish to prosecute the proceeding. In such a situation, unless the

statute clearly requires the court or tribunal to hear the appeal/proceeding and decide it

on merits it can dismiss the appeal/proceeding for. Of course, the power must be

exercised judiciously and taking into consideration all the facts and circumstances of

the case. The Tribunal presently has its benches only at four or five places in India. An

appellant who on account of his place or residence or business being far away from the

place of sitting for the Tribunal may not except at a high cost be able to attend the hearing

especially when as we know that the matters are adjourned for several times. In such an

event, if the appellant files on record his submissions in writing, the Tribunal must

decide the appeal on merits on the basis of the said submissions. In that case, the Tribunal

would not have a power to dismiss the appeal for but where the appellant in spite of

notice is persistently absent and the Tribunal on facts of the case is of the view that the

appellant is not interested in prosecuting the appeal, it can in exercise its inherent power

to dismiss the appeal for non-prosecution. Of course, the conclusion of the Tribunal that

the appellant is not interested in prosecuting the appeal must be reached on the facts of

each case and not merely on account of absence of an appellant on a solitary occasion.

 

7. In the present case, the Tribunal has dismissed the appeal on the absence of the

appellant only on one occasion. The fact that the appellant immediately thereafter

applied for restoration of the appeal shows his intention that he was interested in

prosecuting the appeal and may be he had a justifiable cause for his absence on one

occasion. In the circumstances, the Tribunal ought to have restored the appeal to the

file.

8. Mr. Jetly then submitted that the impugned order arises out of a second application

for restoration of the appeal filed by the petitioners. Second application for restoration

was not maintainable as the first application was dismissed. As we have held that initial

order of dismissal itself was without jurisdiction as the appeal was dismissed for default

without there being a power, the fact of dismissal of the first application would not come

in the way of the petitioner. The Tribunal ought to have corrected its mistake on being

brought to its notice that petitioner was interested in prosecuting the appeal and as such

the Tribunal had no power to dismiss the appeal for default. In the light of that, Tribunal

ought not to have dismissed the second application on a technical ground. For these

reasons, the petition is allowed and the matter is restored to file of the Tribunal. The

Tribunal shall hear the appeal on merits after notice to the petitioner.