22-123 Pioneer Industrial Estate vs Union Of India on 17 September, 2009

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY




                                                                                
                   ORDINARY ORIGINAL CIVIL JURISDICTION
                    CENTRAL EXCISE APPEAL NO.62 OF 2009




                                                        
    M/s.Chemipol




                                                       
    122-123 Pioneer Industrial Estate
    Subhash Road, Jogeshwari East,




                                           
    Mumbai 400 060                                      ..  Appellant


     versus
                             
                            
    1)    Union of India, 
    Law Ministry, Ayakar Bhavan,
        


    Mumbai 400 020.
     



    2)    The Commissioner of Central
    Excise, Thane-II, Nav Prabhat, Chembur





    4th floor, Ranade Road, Dadar,
    Mumbai 400 028.                                        ..    Respondents





                                           ...

Mr.Ashok Shetty with Mr.R.V.Shetty and Ms.Rita K. Joshi for the
appellant.

Mr. P.S. Jetly for respondents.

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CORAM : F. I. REBELLO AND
D.G. KARNIK, JJ

DATED : 17th September 2009

ORAL JUDGMENT:- (Per D.G.Karnik, J)

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 (for short “the Act”) 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

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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 Pvt.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

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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 Commissioner of Income Tax 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 …”

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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 quasi-
judicial 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

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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

inspite 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

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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

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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.

    (D.G. KARNIK, J)                                                  (F.I. REBELLO, J)




                                               
                               
                              
        
     






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