ORDER
P.G. Chacko, Member (J)
1. After careful examination of the records and hearing both sides, I have been convinced of existence of a strong prima facie case in favour of the applicants. I, therefore, allow the stay application unconditionally and, having regard to the particular facts and circumstances of the case, proceed to dispose of the appeal finally.
2. Learned Advocate, Ms. Reena Khair has reiterated the grounds of the appeal and, on the basis thereof, has submitted that the matter requires to be remanded to the lower appellate authority for fresh disposal in accordance with the law and principles of natural justice. There is no serious objection to this submission.
3. The jurisdictional Additional Commissioner of Central Excise had passed an order of adjudication against the present appellants, wherein a duty demand of Rs. 1,06,437.50/- by way of disallowance of Modvat credit was confirmed and a penalty of Rs. 10,000/- was imposed on the party. Aggrieved by this order, the party appealed to Commissioner (Appeals). Along with such appeal, they also submitted an application for waiver of pre-deposit of the duty and penalty amounts and for stay of recovery thereof, pending the appeal. The Commissioner (Appeals) posted this stay application to a date for hearing, but the appellants were not able to attend the hearing due to personal reasons. Learned Advocate now explains the reasons to the effect that the party was not able to attend the hearing on account of death of the mother of the Managing Director of the appellant-company. Well before the date of hearing, the appellants had given a request in writing for adjournment of the hearing on the said ground. This request was, however, turned down by the Commissioner (Appeals) who chose to dispose of the stay application against the party as per order dated 26/29-11-1999. As per the order, the Commissioner (Appeals) directed the party to deposit the amounts within a period of three weeks from the date of receipt of the order. The party received this order but did not comply therewith. Consequently, the lower appellate authority passed order dated 27-1-2000 rejecting the appeal on the sole ground of non-compliance with the requirement of pre-deposit. It is this order which is under challenge in the present appeal.
4. On a careful examination of the records, I find that the Commissioner (Appeals) has passed so-called “interim stay order” without hearing the party and without stating any reason for his finding that the appellants failed to make out a prima facie case for waiver of pre-deposit either on the ground of financial hardship or on merit. It is apparent from the records that the appellants had submitted the relevant facts with regard to their financial hardship and had also furnished documentary proof in support of such submission. The fact that the appellants’ manufacturing unit had been declared a sick unit by the BIFR was clearly stated before the lower appellate authority. True copy of the balance-sheet for the year 1995-96 was also produced before the authority in support of the plea of financial hardship. These submissions were not, however, adverted to let, alone considered by learned Commissioner. Apart from this, he did not state any reason for the finding that no prima facie case was made out by the party. The interim stay order is, therefore, unsustainable in law inasmuch as it is not a speaking order and not in accordance with the principles of natural justice. The final order under challenge was also issued by the Commissioner (Appeals) without affording any opportunity of personal hearing to the party. The appeal was rejected on the sole ground of non-compliance with the interim stay order, which itself was an illegal order as already held. The final order also, therefore, requires to be set aside.
5. In the light of the foregoing discussions, I set aside both the interim stay order and the final order passed by the lower appellate authority and allow this appeal by way of remand, with the following directions: –
(a) the Commissioner (Appeals) shall, in the first instance, dispose of the stay application after by a speaking order after duly considering the submissions of the party and giving a reasonable opportunity of hearing to them; and
(b) he shall dispose of the appeal on its merit after affording a similar opportunity to the party, subject to the results of the stay application.