ORDER
K.L. Rekhi, Member (T)
1. We have heard both sides and have carefully considered the matter.
2. The facts, in brief, are that the Superintendent of Central Excise having jurisdiction over the factory of the appellants, while assessing the monthly RT 12 Returns of the appellants under Rule 173-I of the Central Excise Rules, 1944, made 18 demands on the Returns from the month of March, 1976 to August, 1977. The Superintendent did so without issuing any show cause notice to the appellants and without hearing them. The demands, in all, totalled Rs. 4,93,480.68 and were communicated to the appellants during the period from 23-2-1977 to 12-9-1977. On 13-1-1978, the Superintendent sent them a reminder to pay the demands which were still outstanding. It was then that the appellants appealed to the Appellate Collector. The Appellate Collector, without granting a personal hearing (even though asked for by the appellants) dismissed the appeal as a nullity since it had been filed against the Superintendent’s reminder and not against the original demands. The appellants are now in appeal before us against the Appellate Collector’s order.
3. The prayer of the appellants is to set aside the demands since they had neither been heard by the Superintendent nor by the Appellate Collector. The learned representative of the department opposed their prayer saying that even if the demands were ab initio void, the appellants ought to have appealed against them in time and got the demands set aside; otherwise, the orders making the demands became final against them.
4. We find force in the arguments of the learned representative of the department. We have no hesitation in agreeing with the appellants that since the demands were unilateral and had not been preceded by a show cause notice, they were bad in law 1988 (35) E.L.T. 349 (S.C.) –Union of India and Ors. v. Madhumilan Syntex P. Ltd. and Ors.]. But they were yet orders made by a competent authority having jurisdiction. The orders, howsoever bad, stand unless set aside by the proper appellate authority. The appellants acquiesced in the demands since they did not exercise their right of appeal against them. Consequently, on the expiry of the statutory appeal period of three months under the then Section 35 of the Central Excises & Salt Act, 1944, the demand orders became final against them. The reminder which the Superintendent issued on 13-1-1978 was not an order in itself; it only invited the attention of the appellants to the earlier demand orders and asked the appellants to comply with them. The reminder did not confer a fresh right of appeal to the appellants. The Appellate Collector was, therefore, not wrong in substance when he dismissed their appeal against the reminder as a nullity. The Appellate Collector, no doubt, did not observe the principles of natural justice when he dismissed the appeal without hearing the appellants. But we see no point in remanding the matter to the Collector (Appeals) now because, under the law as it stood at the material time, the out-come of the appeal cannot be any different. The fact is that the appellants were not vigilant and they did not exercise their right of appeal against the demands in time. When belatedly they did file an appeal in 1978, it had become time-barred under the then Section 35 and there was no provision in the law to condone the delay in filing the appeal.
5. This Tribunal is a creation of the statute and it has to work strictly within the confines of the law. It has no inherent and high prerogative powers of a High Court. Under the law, we cannot help someone who was not vigilant about his right of appeal and who lost it by his sheer negligence.
6. In the circumstances, we dismiss this appeal.
P.C. Jain, Member (J)
7. I have carefully perused the order written by learned brother Shri K.L. Rekhi, Technical Member. I, however, regret to differ with it respectfully.
8. Once it has been admitted by the learned SDR that the demands made against the appellant company herein are void ab initio it would mean that the demands do not exist; they are non est. They have been admitted to be void ab initio inasmuch as no show cause notice or hearing was given to the appellant company. Once an order is considered to be void ab initio there is no order in law which can be appealed against, that is the precise effect of the order being void.
9. I am unable to pursuade myself to subscribe to the view that even a void order must be appealed against within the time limit specified in the statute i.e. the Central Excises and Salt Act, 1944. Such an approach, in my view, detracts from the very character of the order described as void.
10. In 1978 (2) E.L.T. (J 229) (Hindustan Pilkington Glass Works Ltd. v. Supdt. Central Excise, Asansole and Ors.), it has been held as in para 20 as follows :-
“20. The Superintendent, Central Excise in determining the assessable values of the goods, for the purpose of determining the excise duty under Section 4 of the Act is performing quasi judicial functions. Such order affects the rights of the petitioner. Although in the Act there is no provision for giving a personal hearing to the petitioner before making such order of assessment, but in the instant case certain deductions claimed by the petitioner for the purpose of determining the assessable value of the products have been disallowed by the Superintendent of Central Excise without assigning any reason. The petitioner wanted to make a proper representation before such order had been passed and they wanted to know the reason for such disallowance but the petitioner’s prayer had not been acceded to. Neither the petitioner was given any opportunity to make any representation nor the reasons for disallowance of such .claims made by the petitioner were make known to the petitioner at any stage of the proceeding. In my view, it is incumbent upon the Central Excise Authorities to afford an opportunity of being heard before such order were made. In the instant case, it is not disputed that natural justice of audi alterant partem has been violated. The breach of natural justice is itself a miscarriage of justice which cannot be cured by preferring an appeal as provided in the statute itself. So, in my view, it cannot be said that the petitioner’s present application under Article 226 of the Constitution could not be maintainable inasmuch as a remedy by way of appeal has been provided in the statute. Moreover if it is found that the assessable value has been determined and the assessment has been made without any authority of law, in that case the present application is also maintainable as it comes under Clause (1) ofArticle 226 of the Constitution. Accordingly, the preliminary objection raised by Mr. Dutt is overruled. [Emphasis supplied].
11. In view of the observations of the High Court which have been emphasised above, that the defect of breach of natural justice is not cured by merely filing an appeal.
12. I am, therefore, of the view that the impugned order needs to be set aside and the matter be remanded to the Asstt. Collector of Central Excise for deciding the case de novo in accordance with the principles of natural justice. This view is further fortified by Tribunal’s order No. 709 and 710/87-B1 dated 21st October, 1987 in the case of Metal Box India Ltd. v. Collector of Central Excise, Calcutta. Relevant extracts from which are reproduced below :-
“It is wrong on all grounds. It declares the assessee’s appeal time barred when there was not even an order from which to appeal-the order required by Section 11A to be issued by the Assistant Collector to determine the dues. The endorsements on the R.T. 12’s are not orders; at best they can be notices served on the assessees. An order of the kind that can be appealed to the Appellate Collector has to be issued by the Assistant Collector in accordance with Section 11 A; no Superintendent can issue it.”
13. As regards the arguments that the Tribunal is a creation of the statute and it has to work strictly within the confines of the law and that the time limit laid down in the Central Excise Law for filing an appeal cannot be whittled down by the Tribunal in terms of the law as it stood at the relevant time, I consider that the question involved here in this appeal is not one of filing the appeal in time against a valid order but the real question for consideration is whether there is a valid order which calls for an appeal to be filed against. The principle of law that an order of assessment is a quasi judicial order and has to conform to the principles of natural justice, has been accepted and therefore, any order in breach of such principles of natural justice is no order in the eye of law. The question of filing an appeal, therefore, does not arise. It is set aside only for the sake of convenience so that an appropriate order in accordance with the principles of natural justice can be passed afresh. In view of the aforesaid discussion, I remand the matter to the Assistant Collector of Central Excise for de novo adjudication.
FINAL ORDER
In view of the order recorded by the majority of the Members who heard this appeal, the appeal is dismissed.