Whether reasonable opportunity of hearing should have been given by competent authority while passing the order under Section 35F of the Act?

PJ/Case Laws/2012-13/1160

Case:- ACME GLOBAL VERSUS COMMISSIONER OF CENTRAL EXCISE, LUCKNOW

Citation: - 2012 (281) E.L.T. 372 (ALL)
Issue: - Whetherreasonable opportunity of hearing should have been given by competent authority while passing the order under Section 35F of the Act?
Brief fact: -M/s. ACME Global, 40B, Sarojini Nagar, Lucknow (hereinafter referred to as the 'appellant') are engaged in manufacturing of 'Ada' Brand 'Pan Masala' contained tobacco commonly known as gutka classifiable under Chapter sub-heading 2403 99 90 of the first schedule to the Central Excise Tariff Act, 1985 and as they were found to have failed to comply with the requirement of provisions of excise law, a show cause notice dated 13-7-2009 came to be issued which was contested by the appellant by filing their reply dated 25-1-2010. The adjudicating authority, after hearing the party, confirmed the demand of the tune of Rs. 6,08,875/- alongwith interest and equal amount of penalty under its order dated 19-3-2010. Being aggrieved, the appellant filed the appeal before Commissioner (Appeals) and alongwith appeal filed an application for dispensing with the requirement of pre-deposit which came to be disposed of by the Commissioner (Appeals) under order dated 8-6-2010 requiring the appellants to deposit 20% of the entire amount of duty confirmed and the penalty imposed by the adjudicating authority under his order dated 19-3-2010 within two weeks from the receipt of the copy of the said order. The appellant failed to deposit the amount within the specified period. However, they filed an application dated 22-6-2010 for modification of the order passed on 8-6-2010 on the ground of undue hardship. The appellant also submitted a bank statement dated 22-6-2010. Though, the appellant was given opportunity of being heard in person on 29-6-2010, but, none appeared before the Commissioner (Appeals) and accordingly, the impugned order came to be passed by the Commissioner (Appeals).

Appellant Contention:- The learned counsel for the appellant has submitted that the appellant was not informed well within time to appear on 29-1-2010. In case, it is so, then it was incumbent upon the appellant to invite the attention of the appellate authority by moving appropriate application which seems to be not has been done.

Learned counsel for the appellant proceeded to submit that reasonable opportunity of hearing should have been given by competent authority while passing the order under Section 35F of the Act. It is also submitted that undue hardship should have been considered by the appropriate authority while rejecting the appellant's case. From plain reading of sec.35F shows that by preferring the appeal against the order passed by original authority, it shall be incumbent on the assessee to deposit the tax demand raised. However, under proviso liberty has been given to the appellate authority to pass appropriate order to reduce the deposits. The provision contained under section 35F of the Act, does not provide that before passing order under this provision, opportunity of hearing should be given.

The Appellant has invited attention of this court to the Circular dated 30-3- 1999 issued by the Central Board of Excise and Customs relying upon the judgment of Madras High Court. The circular has been struck down by the Madras High Court in its judgment with the finding that the opportunity of hearing shall be necessary. Madras High Court has relied upon the judgment reported in AIR 1978 SC 597 at page 620, Menaka Gandhi v. Union of India, the provision of principles of natural justice is required to be complied with in every matter where person's right is affected. It borne out that discretions has been given to the appellate authority to take a decision with regard to compliance of principles of natural justice with due opportunity of hearing to the appellant. Moreover, in Jesus case (supra) Hon’ble supreme Court itself had interpreted setion 35F of the Act by recording different finding, hence it is not open for the High court to take different view. The judgment and order passed by Hon’ble Supreme Court is binding under Article 141 of the Constitution of India.

The Appellant has further relied upon the case reported in (2006) 13 SCC 347 = 2006 (204) E.L.T. 513 (S.C.) = 2008 (12) S.T.R. 104 (S.C.), Benara Valves Ltd. and Others v. Commissioner of Central Excise and 2009 17 SCC 626 = 2009 (249) E.L.T. 321 (S.C.), Dinesh International Ltd. v. Union of India and Another

Respondent contention ;- TheLearned counsel for the respondent has relied upon the judgment reported in (1996) 4 SCC 69 = 1996 (83) E.L.T. 486 (S.C.), Union of India and another v. Jesus Sales Corporation. In case of Jesus Corporation (supra), it has been held by Hon'ble Supreme Court that it is not necessary to provide opportunity of hearing while considering the undue hardship under Section 35F of the Act.

Reasoning of judgement :- The judgment of Supreme Court in the case of A.K. Kraipak v. Union of India and Menaka Gandhi v. Union of India (supra) though deals with the principles of natural justice, the hands of the Court are tight when Hon'ble Supreme Court itself interprets statutory provision and gives different meaning.
The provision contained in case of Benara Valves (supra) does not seem to be applicable under the facts and circumstances of the present case, that too when the petitioner has not raised grievance against the original order passed under Section 35G of the Act at initial stage. The judgement of Dinesh International Ltd. (supra) is also not applicable under the fact and circumstances of the present case.
Accordingly, no substantial question of law is involved in the present case, which may require for interference by this Court under Section 35G of the Act. The controversy is based on the finding of the fact, hence there appear no good ground to interfere with the impugned order passed by the Tribunal. So it is dismissed accordingly.
However it is provided in the case that the appellant deposits the pre-deposit amount within one month from today, in case already not deposited, then the appellate authority may hear the appeal on merits, expeditiously.

Decision: -Appeal dismissed

Comments

PJ/Case Laws/2012-13/1160

Post a Comment

Query