ORDER
P.G. Chacko:
1. We dispense with pre-deposit of duty and penalty and take up the appeal for disposal.
2. This appeal has been (lied by M/s. Ujala Dyeing and Printing Mills Pvt. Ltd. against the order passed by the Commissioner (Appeals). The appellants are registered with the department under Rule 174 of the Central Excise Rules, 1944 since 1.4.1996. According to the averments in the appeal, they had taken over the factory with the appurtenant land from M/s Ranuka Silk Mills (P) Ltd. prior to registration with the department. In respect of alleged clandestine removal of goods from the factory for some period prior to such take-over of the property by the appellants, the department issued a show-cause notice seeking to recover the duty on the goods and proposing to confiscate land, building, plant, machinery etc. and to impose penalty for alleged contravention of law with intent to evade payment of duty. The noticee viz. Ranuka Silk Mills (P) Ltd. did not respond. The adjudicating authority passed an order against M/s Ranuka Silk Mills (P) Ltd., confirming the demand of duty, ordering confiscation of land, building, plant, machinery etc. (with option for redemption thereof on payment of a fine or Rs. 1 lakh) and imposing penalty equal to duty. The order of the Additional Commissioner of Central Excise was served on the appellants, who were, at that time, in charge of the factory. The appellants preferred an appeal to the Commissioner (Appeals) and the latter rejected it as not maintainable. Ld. Commissioner (Appeals) held that M/s Ujala Dyeing & Printing Mills Pvt. Ltd. could not be aggrieved by the order passed by the original authority against M/s Ranuka Silk Mills (P) Ltd. Hence the present appeal of M/s Ujala Dyeing & Printing Mills Pvt. Ltd.
3. We have heard both sides. The Consultant for the appellants submits that, as the order of the Additional Commissioner affected the property of M/s Ujala Dyeing and Printing Mills Pvt. Ltd., they were aggrieved by the order and were competent to challenge it before the Commissioner (Appeals). It is further submitted that no show-cause notice for confiscating the land, building, plant, machinery etc. was served on the appellants. Ld. Jt. CDR seeks to justify the view taken by the Commissioner (Appeals). He submits that M/s Ujala Dyeing and Printing Mills Pvt. Ltd. had no locus standi to file any appeal with the Commissioner (Appeals) against the original authority’s order passed against another legal entity. The provisions of Rule 233A of the Central Excise Rules, 1944 have been brought to our notice by ld. advocate Shri V. Sridharan, who by way of assisting the bench submits that the provisions are relevant to the case.
4. We have carefully considered the facts of the case and the relevant provisions of law. The short question to be decided upon is whether the appeal preferred by M/s Ujala Dyeing and Printing Mills Pvt. Ltd. to the Commissioner (Appeals) against the order passed by the Additional Commissioner of Central Excise against M/s Ranuka Silk Mills (P) Ltd. was maintainable in law. That appeal was filed under Section 35 of the Central Excise Act. Under this provision of law, “any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise” may appeal to the Commissioner (Appeals). Now the question which immediately arises is whether the present appellants were aggrieved by the decision of the Additional Commissioner, Under the order of the Additional Commissioner, the land, building, plant, machinery etc. which were in the possession and enjoyment of the appellants were confiscated (with option for redemption). The relevant provision which should guide the departmental authorities wanting to confiscate properties which, according to them, were used for the manufacture of excisable goods liable to confiscation, was Rule 233 A of the erstwhile Central Excise Rules 1944. This rule reads as under :-
RULE [233 A. Issue of show cause notice before confiscation of any property or imposition of any penalty, – No order confiscating any property, or imposing any penalty on any person shall be made under these rules, unless –
(a) a written notice stating the grounds on which it is proposed to confiscate such property or to impose such penalty; and
(b) a reasonable opportunity of making a representation in writing within such time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein and of being heard in the matter’
are given –
(i) Where the order relates to confiscation of any property, to the person-in-charge of such property and, where such person-in-charge is not the owner of such property, also to the owner thereof.
(ii) Where the order relates to the imposition of any penalty, to the person on whom such penalty is to be imposed:
Provided that the notice referred to in Clause (a) and the representation referred to in Clause (b) may, at the request of the person or persons concerned, be oral.]
5. The above provision of law ex facie obligated the department to issue a written notice stating the grounds for confiscation of any property, to the person-in-charge of the property. Where the person-in-charge was not the owner of the property, then such notice shall also be issued to the owner. In any situation, it was mandatory for the department to notify their proposal for confiscation of property, to the person-in-charge of the property. In the present case, it is not in dispute that M/s Ujala Dyeing and Printing Mills Pvt. Ltd. who had got themselves registered with the department under Rule 174 as early as on 1.4.1996 and had taken over the factory were the persons-in-charge of the property. It is also not in dispute that no notice was issued to them under Rule 233A by the department before proceeding to confiscate the property. The Additional Commissioner confiscated the property without following the mandate of the above Rule and, therefore, the confiscation was bad in law insofar as the appellants were concerned. If that be the case, the appellants were certainly aggrieved by the decision of the Additional Commissioner and had sufficient grounds to prefer appeal under Section 35. It is a gross error of law on the part of the Commissioner (Appeals) to have dismissed the appeal as not maintainable.
6. We have noted from the impugned order that, before the Commissioner (Appeals), the party had undertaken to produce documents proving their title to the property. However, the documents were not produced before the Commissioner (Appeals). It is upto the party to adduce documentary evidence before the Commissioner (Appeals) to substantiate their grievances.
7. In view of the findings recorded above, we set aside the order passed by the Commissioner (Appeals) and direct him to dispose of the appeal of M/s Ujala Dyeing & Printing Mills Pvt. Ltd. on its merits in accordance with law. Needless to say, the party shall be given a reasonable opportunity of being heard.
8. The appeal stands allowed by way of remand.
(Pronounced in Court)