ORDER
P.G. Chacko, Member (J)
1. After carefully examining the records of the case and hearing ld. Advocate Shri J.S. Agarwal for the applicants and ld. DR Shri MM. Dubey for the respondents, I am convinced of the existence of a strong prima facie in favour of the applicants and therefore allow this application unconditionally. Having regard to the particular facts and circumstances of this case, I am of the view that the appeal itself can be disposed of at this stage. Accordingly I am taking up the appeal for disposal.
2. The jurisdictional Assistant Commissioner, in adjudication of proceedings taken in pursuance of show cause notice dated 11-9-1997 against the appellants and another person, passed order dated 16-3-1999 confiscating certain quantity of finished goods of the appellants with option to redeem the same on payment of a fine of Rs. 50,000/-. There was no demand of any duty or imposition of any penalty against the appellants under the order of adjudication. The order of the Assistant Commissioner was, however, taken in appeal by the party before the Commissioner of Central Excise (Appeals) and the latter passed an order dated 23/24-9-1999 rejecting the appeal on the sole ground of non-compliance with the requirement of pre-deposit under Section 35F of the Central Excise Act, without going into the merits of the case and without even affording any opportunity of hearing to the appellants. This order of the Commissioner (Appeals) is under challenge in the appeal before the Tribunal at present.
3. The course of events culminating in the impugned order, as reiterated by the ld. Counsel for the appellants, is as follows :
Alongwith their appeal to the Commissioner (Appeals), the appellants had also filed an application for waiver of pre-deposit and for stay under Section 35F of the Act before him and the latter had passed order dated 19-8-1999 directing the party to deposit “adjudged dues” within three weeks from the date of receipt of the order. This order was passed without affording any opportunity of hearing to the appellants. This order was received by the appellants on 24-8-1999, whereupon they submitted a modification application to the Commissioner (Appeals). This application was sent on 6-9-1999. In this application, the appellants had, inter alia, prayed for modification of the order dated 19-8-1999 after a personal hearing on their stay/modification applications. The Commissioner (Appeals) however did not consider this plea of the party and, without affording any opportunity of hearing to them, passed the impugned order rejecting their appeal on the sole ground of non-compliance with the order dated 19-8-1999.
4. Ld. Counsel for the appellants has, on the basis of the above facts and circumstances, prayed for setting aside the impugned order and remanding the matter to the lower appellate authority.
5. Ld. Advocate has raised yet another question of law with reference to the requirement of Section 35F of the Central Excise Act. He has submitted that this provision of law is no applicable to a case where there is neither any demand of duty nor any imposition of penalty. The present appellants’ case, according to him, is one such case. At the moment, on this issue, I would observe that the appellants will be at liberty to raise the plea before the lower appellate authority at the appropriate stage.
6. Both the interim stay order dated 19-8-1999 and the final order dated 23/24-9-1999 of the Commissioner (Appeals) are liable to be set aside inasmuch as these orders were passed in violation of the principles of natural justice. As regards the interim stay order, I note that, apart from the fact that the order was passed in violation of natural justice, the order is not a speaking order inasmuch as no reason whatsoever was stated by the lower appellate authority for his finding that the party had not been able to make out a prima facie case. I observe that the reliance placed by the lower appellate authority, for passing the stay order, on the decision of the Supreme Court in the case of Union of India and Ors. v. Jesus Sales Corporation 1996 (83) E.L.T. 486 (S.C.) cannot be considered as opposite to the factual situation. The Apex Court’s judgment in the case of Jesus Sales Corporation (Supra) was passed in a similar context of consideration of stay application. The Court categorically held that a quasi-judicial authority should exercise its discretion in such matters in a reasonable and rational manner taking into consideration the relevant facts and circumstances of the particular case while considering the question as to whether deposit of any amount of penalty should be dispensed with unconditionally or subject to conditions. In the instant case, the interim stay order does not indicate as to whether the relevant facts and circumstances of the case had been duly considered in a reasonable and rational manner by the lower appellate authority. I, therefore, hold that the reliance placed by the Commissioner (Appeals) on Jesus Sales Corporation is misconceived. For the reasons already noted, I set aside the interim stay order. The interim stay order having been set aside, the final order of the Commissioner (Appeals) holds no ground and the same is also set aside on the same grounds as set out in relation to the interim stay order.
7. The matter is remanded to the Commissioner (Appeals) for fresh consideration in the manner prescribed hereinafter.
8. The stay application of the appellants shall be considered afresh along with their application for modification on merits and a speaking order shall be passed by the Commissioner (Appeals) after affording a reasonable opportunity of hearing to the party. The appeal shall, then, be disposed of on its merits after affording a similar opportunity to the appellants and a speaking order shall be passed therein; subject to the results of the stay application. It is made clear that, while considering the stay application along with modification application, the Commissioner (Appeals) shall duly consider the aforesaid plea of the appellants with regard to the applicability of Section 35F of the Act to the stay matter.