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2009 DIGILAW 441 (CAL)

Promising Exports Ltd. v. UNION OF INDIA

2009-06-23

SOUMITRA PAL

body2009
Judgment Soumitra Pal, J. These writ petitions were moved challenging the orders passed by the Customs, Excise and Service Tax Appellate Tribunal (for short "the Appellate Tribunal") dismissing the appeals for non-compliance of the orders passed by it directing predeposit under section 35F of the Central Excise Act, 1944 ("Central Excise Act" for short) or under section 129E of the Customs Act, 1962 (in short the ‘Customs Act’). 2. It is to be noted that the writ petitions i) W.P. No. 261 of 2008, Promising Exports Ltd. & Anr. vs. Union of India & Ors. ii) W.P. No. 1161 of 2008, Indrajit Jash vs. Union of India & Ors. iii) W.P. 2428(W) of 2008, Shree Krishna Limited & Anr. vs. Union of India & Ors. iv) W.P. No. 4006(W) of 2008, Suresh Goyel & Sons. vs. Union of India & Ors. were moved challenging the orders passed in appeals by the Appellate Tribunal directing predeposit under section 35F or under section 129E of the Customs Act upon notice to the respondents including the Appellate Tribunal. During the pendency of the writ petitions, appeals were dismissed by the Appellate •Tribunal for non-compliance of the orders directing predeposit. However, the writ petitions W.P. No. 230 of 2008, Shaman Ispat Ltd. & Anr. vs. Union of India & Ors. and W.P. No. 1016 of 2008, Shree Gobinddeo Glass Works Ltd. & Anr. vs. Union of India & Ors. were moved after orders were passed by the Appellate Tribunal dismissing the appeals for not complying with the orders directing predeposit. 3. The common grounds of challenge in these petitions are that the applications for dispensing with the predeposit under section 35F or under section 129E or the application for modification of the order directing predeposit in connection with the appeals before the Appellate Tribunal were not at all considered on merit as discretion was not exercised while considering relevant materials honestly, bona fide and objectively. Further the Appellate Tribunal ought not to have dismissed the appeals for noncompliance of the orders directing predeposit. Moreover, the Appellate Tribunal should not have dismissed the appeals of Promising Export Limited, Indrajit Jash, M/s. Shree Krishna Limited and Suresh Goyal and Sons since writ petitions were pending challenging the orders of the Appellate Tribunal directing predeposit. Further the Appellate Tribunal ought not to have dismissed the appeals for noncompliance of the orders directing predeposit. Moreover, the Appellate Tribunal should not have dismissed the appeals of Promising Export Limited, Indrajit Jash, M/s. Shree Krishna Limited and Suresh Goyal and Sons since writ petitions were pending challenging the orders of the Appellate Tribunal directing predeposit. Besides the common grounds, in the writ petition relating to M/s. Shree Gobinddeo Glass Works Limited the grievance or the issue, in short, is that the Appellate Tribunal while passing the order directing predeposit did not take note of the fact that the petitioner was registered with the BIFR. In M/s. Shree Krishna Limited though the quantum of duty and penalty were more than Rs.10 lakhs, a learned singe member of the Appellate Tribunal had dismissed the appeal for non-compliance of the order directing predeposit in violation of the provisions contained in section 35D of the Central Excise Act and had thus exceeded his jurisdiction. In Indrajit Jash the petitioner has challenged the order passed by the Appellate Tribunal directing pre deposit on the ground that it failed to consider the fact that no show-cause notice under section 124 of the Customs Act was served on him in his individual capacity which is evident from the notice of show-cause and the adjudication order and thus, the order is void. Further the Appellate Tribunal failed to appreciate that there was no concession and there cannot be any concession on a point of law by the learned Advocate for the appellant as recorded in the order. In M/s. Shaman Ispat Limited the grievance is though a sum of Rs.1,41,49,000.00 was deposited till the date of passing of the order by the Appellate Tribunal, yet the financial stringency faced by the appellant was not considered. In M/s. Promising Exports Limited grievance is though it is evident that the exports were duly certified by the customs authorities, transactions were through normal banking channels and there was no complaint from the importer, yet orders were passed by the Appellate Tribunal directing predeposit under section 129E without considering the facts. In Suresh Goyel and sons (HUF) it has been stated that though additional evidences were furnished, those were not considered by the Appellate Tribunal while passing the order dated 1st February, 2008. Besides, in the writ petitions there are short points which were raised and argued. 4. In Suresh Goyel and sons (HUF) it has been stated that though additional evidences were furnished, those were not considered by the Appellate Tribunal while passing the order dated 1st February, 2008. Besides, in the writ petitions there are short points which were raised and argued. 4. Since the issues involved are common, the matters were heard analogously. Elaborate arguments were advanced. 5. It is to be noted that I would be proceeding on the basis of sections 35C(2A) and 35F under the Central Excise Act inasmuch as four of the petitions are under the Central Excise Act and for the purpose of appreciating the judgment wherever the remaining two customs cases are concerned, the said provisions of sections 35C(2A) and 35F should be read as section 129B(2A) and 129E of the Customs Act respectively. 6. The issues which fall for consideration are i) whether the Appellate Tribunal was justified in passing orders dismissing the appeals for noncompliance of its directions directing deposit of an amount by the appellants under section 35F of the Central Excise Act after the insertion of section 35C(2A); ii) whether an appeal can be dismissed for non-compliance of the order directing predeposit on the day when it is posted for compliance; iii) whether the Appellate Tribunal was justified in dismissing the appeals during the pendency, of the writ petitions challenging the order of predeposit passed by the Appellate Tribunal and (iv) whether before passing the impugned orders directing predeposit, the Appellate Tribunal had formed its 'opinion' as stipulated in section 35F. 7. In order to answer the first issue it is to be noted that section 35F of the Central Excise Act is pari materia to section 129E of the Customs Act. Sections 35B and 35C of the Central Excise Act are pari materia to sections 129A and 129B respectively of the Customs Act. 8. 7. In order to answer the first issue it is to be noted that section 35F of the Central Excise Act is pari materia to section 129E of the Customs Act. Sections 35B and 35C of the Central Excise Act are pari materia to sections 129A and 129B respectively of the Customs Act. 8. The question whether the Appellate Tribunal was competent to reject an appeal in the event of failure to deposit duty or penalty under section 129E pending the appeal, came up for consideration before the Supreme Court in a Civil Appeal in Vijay Prakash D. Mehta vs. Collector of Customs, decided on 16th August, 1988 reported in (39) ELT 178(SC) relied on by the learned Advocates for the respondents, wherein it was held as under: "5.The aforesaid section provides a conditional right of appeal in respect of an appeal against the duty demanded or penalty levied. Although the section does not expressly provide for rejection of the appeal for non-deposit of duty or penalty, yet it makes it obligatory on the appellant to deposit the duty or penalty, pending the appeal, failing which the Appellate Tribunal is fully competent to reject the appeal. See, in this connection, the observations of this Court in respect of section 129 prior to substitution of Chapter XV by the Finance Act, 1980 in Navin Chandra Chhotelal vs. Central Board of Excise & Customs & Ors., 1981 ELT 679 (S.C.) : 1971(3) SCR 357 ). The proviso, however, gives power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships. It is a matter of judicial discretion of the Appellate Authority. 11. These observations cannot be applied to the facts of this case. Here we are concerned with the right given under section 129A of the Act as controlled by section 129E of the Act, and that right is with a condition and thus a conditional right. The petitioner in this case has no absolute right of stay. He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitations of section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of 'undue hardships'. The discretion must be exercise on relevant materials honestly, bona fide and objectively. He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitations of section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of 'undue hardships'. The discretion must be exercise on relevant materials honestly, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority. In this case it is manifest that the order of the Tribunal was passed honestly, bona fide and having regard to the plea of 'under hardship' as canvassed by the appellant. There was no error of jurisdiction or misdirection. 13. It is not the law that adjudication by itself following the rules of natural justice would be violative of any right-Constitutional or statutory without any right of appeal as such. If the Statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the rights becomes vested and exercisable to the appellant. The proviso to section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a discretion vested in an obligation to act judicially and properly." 9. The Apex Court in Vijay Prakash D. Mehta (supra) had referred to and relied on the judgment of the Supreme Court in Navin Chandra Chhotelal vs. Central Board of Excise and Customs & Ors. reported in AIR 1971 SC 2280 , wherein while interpreting section 129 of the Customs Act it was held as under : "18.No doubt section 129 does not expressly provide for the rejection of the appeal for I1gn-compliance with the requirement regarding the deposit of penalty or duty; but when sub-section (1) of section 129 makes it obligatory on an appellant to deposit the duty or penalty pending the appeal and if a party does not comply either with the main sub-section or with any order that may be passed under the proviso the appellate authority is fully competent to reject the appeal of non-compliance with the provisions of section 129(1). That is exactly what the first respondent has done in this case. Accepting the contention of Mr. That is exactly what the first respondent has done in this case. Accepting the contention of Mr. Trevedi will mean that the appeal will have to be kept on file for ever even when the requirement of section 129(1) has not been complied with. Retention of such an appeal on file will serve no purpose whatsoever because unless section 129(1) is complied with, the appellate authority cannot proceed to hear an appeal on merits. Therefore, the logical consequence of failure to comply with section 129(1) is the rejection of appeal on that ground." 10. Therefore the established proposition of law was that an appeal under section 35F was a conditional right of appeal. Although section 35F did not expressly provide for rejection of the appeal for non-deposit of duty or penalty, yet it was obligatory on the appellant to deposit the duty or penalty pending the appeal failing which the Appellate Tribunal was competent to reject the appeal. 11. It is significant that on 11th May, 2002 the legislature had inserted sub-section (2A) to section 35C. However, section 35F except 'with the substitution of the words 'Commissioner (Appeals)', has remained unamended. Now what is the effect of the insertion of sub-section (2A) to section 35C. Does it have any bearing on section 35F? 12. In order to answer the question it is necessary to refer to Chapter VI(A) of the Central Excise Act dealing with 'Appeals'. Besides other sections, the said chapter contains sections 35B, 35C and 35E which shall be referred to for deciding the issue. Relevant provisions in section 35B relating to appeals to the appellate Tribunal are as under : "SECTION 35B. Besides other sections, the said chapter contains sections 35B, 35C and 35E which shall be referred to for deciding the issue. Relevant provisions in section 35B relating to appeals to the appellate Tribunal are as under : "SECTION 35B. Appeals to the Appellate Tribunal-(1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order- (a) a decision or order passed by the [Commissioner of Central Excise] as an adjudicating authority; (b) an order passed by the [Commissioner (Appeals)] under section 35A; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereafter in this Chapter referred to as the Board) or the Appellate (Commissioner of Central Excise) under section 35, as it stood immediately before the appointed day; (d) an order passed by the Board or the (Commissioner of Central Excise), either before or after the appointed day, under section 35A, as it stood immediately before that day;...... (2).................... (3) Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the (Commissioner of Central Excise), or, as the case may be, the other party preferring the appeal. (4)................. (5)................ (6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, irrespective of the date of demand of duty and interest or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of............ (7)............." 13. Section 35C is as under : "SECTION 35C. Orders of Appellate Tribunal-(1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. [(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) The Appellate Tribunal may, at any time within [six months] from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the [Commissioner of Central Excise] or the other party to the appeal: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. [(2A) The Appellate Tribunal shall. where it is possible to do so. hear and decide every appeal within period of three years from the date on which such appeal is filed: Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order: Provided further that if such appeal is not disposed of within the period specified in the first proviso the stay order shall on the expiry of that period stand vacated. (3) The Appellate Tribunal shall send a copy of every order passed under this section to the [Commissioner of Central Excise] and the other party to the appeal. (4) [Save as provided in section 35G or section 35L] orders passed by the Appellate Tribunal on appeal shall be final." (Emphasis supplied) 14. Section 35F is with regard to the deposit, pending appeal, of duty demanded or penalty levied, is as under: "SECTION 35F. Deposit, pending appeal, of duty demanded or penalty levied-Where in any appeal under this Chapter. (4) [Save as provided in section 35G or section 35L] orders passed by the Appellate Tribunal on appeal shall be final." (Emphasis supplied) 14. Section 35F is with regard to the deposit, pending appeal, of duty demanded or penalty levied, is as under: "SECTION 35F. Deposit, pending appeal, of duty demanded or penalty levied-Where in any appeal under this Chapter. the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall pending the appeal deposit with the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the [Commissioner (Appeals)] or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the [Commissioner (Appeals)] or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue. [Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing.] [Explanation-For the purposes of this section 'duty demanded' shall include,- (i) amount determined under section 11D; (ii) amount of erroneous Cenvat credit taken; (iii) amount payable under Rule 57CC of Central Excise Rules, 1944; (iv) amount payable under Rule 6 of Cenvat Credit Rules, 2001 or Cenvat Credit Rules, 2002 or Cenvat Credit Rules, 2004; (v) interest payable under the provisions of this Act or the rules made thereunder.]" (Emphasis supplied) 15. In this context it is appropriate to refer to a public notice dated 2nd July, 1999 regarding filing of appeal which is as under :- "DEFECTIVE APPEALS-DIARY NUMBER (PROVISIONAL APPEAL NUMBER) TO BE GIVEN IN CASE OF DEFECTS. CEGAT, New Delhi, Public Notice No. 7/99, dated 2.7.1999 It is proposed to issue computerized acknowledgements and defect memos right at the time of receipt. 2. CEGAT, New Delhi, Public Notice No. 7/99, dated 2.7.1999 It is proposed to issue computerized acknowledgements and defect memos right at the time of receipt. 2. In case of substantial defects and non-compliance with the CEGAT (Procedure) Rules noticed at the time of receipt only a diary number (provisional appeal number) will be given and the matters will not be listed unless the defects are removed within the prescribed time (including such extended time as may be allowed). All the appellants/respondents and their representatives may ensure proper filing of appeal memos/applications in their own interest." 16. Section 35C(2A) postulates that the Appellate Tribunal "where it is possible to do so, shall hear and decide every appeal within a period of three years from the date on which such appeal is filed". First proviso to section 35C(2A) makes it obligatory "that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within one hundred and eighty days from the date of such order". Significantly, the first proviso stipulates disposal of appeal and not dismissal. However, second proviso to section 35C(2A) postulates automatic vacation of the order of stay if such appeal is not disposed of within the said period of one hundred and eighty days. Hence, if an appeal is not disposed of after one hundred and eighty days an order of stay does not survive. There is no question of extension of an order of stay. Thus, in a case where the order of stay passed by the Appellate Tribunal is automatically vacated, there are no fetters on the revenue, in order to safeguard public revenue, from recovering the sum due. In such a case the revenue is free to set in motion the process of recovery of the sum due either tinder section 11 of the Central Excise Act or under section 142 of the Customs Act, as the case may be. Now the question is after vacation of the order of stay what would remain in the file? In such a case the revenue is free to set in motion the process of recovery of the sum due either tinder section 11 of the Central Excise Act or under section 142 of the Customs Act, as the case may be. Now the question is after vacation of the order of stay what would remain in the file? In my view and as correctly submitted on behalf of the petitioner, it is the appeal which remains and in that case the "Appellate Tribunal shall, where it is possible to do so, hear and decide" the appeal "within a period of three years from the date on which such appeal" was filed. Now what do the words "hear and decide every appeal" occurring in section 35C(2A) mean? "Decide" means to "give a judgment concerning a matter or legal case" (Concise Oxford English Dictionary). Therefore, in my view, "decide" would mean a decision or a judgment by the Appellate Tribunal on merits on every appeal which is pending and not dismissal. During hearing a point was raised when would an appeal be treated as ready for hearing. Learned Advocates for the respondents submitted that as evident from section 35F an appeal would be treated as ready for hearing either when goods are under the control of the revenue or when the amount of duty or penalty imposed are deposited. However, where goods are not in the control of the authorities, an application for waiver of predeposit is to be made under Rule 28A of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 (for short the 'Rules') and if direction is issued by the Appellate Tribunal for predeposit of duty or penalty and if deposit is made, an appeal would be treated to be ready for hearing. However, in case of its non-payment, an appeal would not be entertained as it would not be treated as ready for hearing. On behalf of the petitioner it was submitted that since in each of the appeals at the time of filing of appeals and applications for stay regular appeal numbers were provided by the Registry of the Appellate Tribunal, appeals were regular appeals. On behalf of the petitioner it was submitted that since in each of the appeals at the time of filing of appeals and applications for stay regular appeal numbers were provided by the Registry of the Appellate Tribunal, appeals were regular appeals. Had there been defects, under circular vide public notice No. 7/99 dated 2.7.99, only a diary number (provisional appeal number) would have been given and appeals would not have been listed unless the defects were removed within the time prescribed. Moreover, an appeal cannot be treated as defective subsequently for non-payment of predeposit. In my view, in view of the public notice dated 2.7.1999, as admittedly regular appeal numbers were provided, such an appeal should be treated to be as ready for hearing and cannot become or be treated as defective. Even in case of non-compliance, as held in this paragraph, under second proviso to section 35C(2A), the stay order would stand automatically vacated after one hundred and eighty days from the date of passing such order of stay. However, still the appeal would remain pending and it would be decided on merits, as far as possible, within three years from the date of filing of such appeal. Does the newly introduced sub-section (2A) to section 35C have any bearing on section 35F? If sections 35C(2A) and 35F are construed harmoniously the answer has to be in the affirmative. The reasons are not far to see. 17. It has been noted that section 35C(2A) directs the "Appellate Tribunal" to "hear and decide every appeal" and significantly its first proviso speaks of "an order of stay made in any proceeding relating to an appeal". Now what is the ambit of the words "an order of stay in any proceeding relating to an appeal". Does it include an order passed under section 35F? Since the proviso to section 35F speaks of, in case of "undue hardship", dispensing with the deposit of duty demanded or penalty levied on certain conditions "pending appeal", it is certainly a proceeding relating to an appeal filed under subsection (1) of section 35B as contemplated in section 35C(2A). Moreover, that an order passed under section 35F is a part of the proceedings in appeal is evident from the words at the outset of the said section which relates to "any appeal under this chapter". Moreover, that an order passed under section 35F is a part of the proceedings in appeal is evident from the words at the outset of the said section which relates to "any appeal under this chapter". Further, though the words "an order of stay" or "stay order" appearing in section 35C(2A) do not appear in section 35F, it cannot but mean an order of stay passed by the Appellate Tribunal made on an application of waiver of predeposit while dispensing with the predeposit of duty demanded or penalty levied under section 35F which otherwise should have been deposited. Looking at the provisions, in my view, section 35C(2A) has to be interpreted in a manner so as to bring it in harmony with the other provisions particularly section 35F. Intention must not be inferred solely from section 35F if it militates against the expressed and unambiguous provisions in 35C(2A). Interpretation should not be with regard to a particular section and the provisions in chapter VIA including sections 35C(2A) and 35F must be construed as a whole. Effect is to be given to the intention of the legislature which is to be gathered• from the context and the statute has to be given a schematic interpretation. Hence, it is clear that section 35F and its proviso cannot be read independently and should be read in harmony with section 35C(2A); otherwise it would render the provisions contained in the newly inserted sub-section (2A) to section 35C otiose. Therefore, in view of the insertion of sub-section (2A) to section 35C in the Central Excise Act, the law laid down in Vijay Prakash D. Mehta (supra) and in Navin Chandra Chhotelal (supra) stands impliedly diluted. The judgments in B.D. Steel and Traders vs. Union of India decided on 31st November, 1997 and reported in 1998(103) ELT 218(Bom), Usha Udyog vs. CEGAT decided on 26th July, 2000 and reported in 2003 (156) ELT 201 (Del.) are per incuriam as it did not consider the law laid down in the judgment in Vijay Prakash D. Mehta (supra) which, in my view, held the field till the insertion of sub-section (2A) to section 35C on 11th May, 2002. The judgment in Kishori Pujari Granite Private Limited vs. Union of India decided on 5th August, 2003 and reported in 2005 (184) ELT 225 (M.P.) is of no assistance as it does not deal with section 35C(2A). The judgment in Kishori Pujari Granite Private Limited vs. Union of India decided on 5th August, 2003 and reported in 2005 (184) ELT 225 (M.P.) is of no assistance as it does not deal with section 35C(2A). Thus, in my view, for the reasons as enumerated the Appellate Tribunal was not justified in dismissing the appeals for non-compliance of the orders directing predeposit. 18. In order to answer the second issue it is necessary to refer to Rules 18, 19, 20, 28A and 41 of the Rules which are as under :- RULE 18. Date and place of hearing to be notified.-(1) The Tribunal shall notify to the parties the date and place of hearing of the appeal or application. (2) The issue of the notice referred to in sub-rule (1) shall not by itself be deemed to mean that the appeal or application has been admitted. RULE 19. Hearing of appeal-(1) On the day fixed, or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal. (2) The Tribunal shall then, if necessary, hear the respondent against the appeal and in such a case the appellant shall be entitled to reply. RULE 20. Action on appeal for appellant's default-Where on the day fixed for the hearing of the appeal or on any other day to which such hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for default or hear and decide it on merits: Provided that where an appeal has been dismissed for default and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the dismissal and restore the appeal. RULE 21. Hearing of appeals exparte-Where on the day fixed for the hearing of the appeal or on any other day to which the hearing is adjourned the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Tribunal may hear and decide the appeal exparte. RULE [28A]. RULE 21. Hearing of appeals exparte-Where on the day fixed for the hearing of the appeal or on any other day to which the hearing is adjourned the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Tribunal may hear and decide the appeal exparte. RULE [28A]. Procedure for filing and disposal of stay petitions.-(1)(a) Every application preferred under the provisions of the Acts for stay of the requirement of making deposit of any duty demanded or penalty levied shall be presented in triplicate by the appellant in person or by his duly authorised agent, or sent by registered post to the Registrar or any other officer authorised to receive memoranda of appeals, as the case may be, at the Headquarters of the Bench having jurisdiction to hear the appeal in respect of which the application for stay arises. (b) One copy each of such application shall be served on the authorised representative of the (Commissioner) or, as the case may be, the Administrator simultaneously by the applicant. (2) Every application for stay shall be neatly typed on one side of the paper and shall be in English and the provisions of Rule 5 shall apply to such applications. (3) An application for stay shall be set forth concisely the following: (a) the facts regarding the demand of duty or penalty, the deposit whereof is sought to be stayed; (b) the exact amount of duty or penalty and the amount undisputed therefrom and the amount outstanding; (c) the date of filing of the appeal before the Tribunal and its number, if known; (d) whether the application for stay was made before any authority under the relevant Act or any Civil Court and, if so, the result thereof (copies of the correspondence, if any, with such authorities to be attached); (e) reasons in brief for seeking stay; (f) whether the applicant is prepared to offer security and, if so, in what form; and (g) prayers to be mentioned clearly and concisely (state the exact amount sought to be stayed). (4) The contents of the appeal/application/cross-objection shall be supported by a verification regarding their correctness by the appellant or respondent or the principal officer authorised to sign appeal/cross-objection. (4) The contents of the appeal/application/cross-objection shall be supported by a verification regarding their correctness by the appellant or respondent or the principal officer authorised to sign appeal/cross-objection. The Bench may, however, in a particular case direct filing of an affidavit by the appellant/respondent or any other person, if so considered necessary or desirable in the circumstances of a given case. (5) Every application for stay shall be accompanied by three copies of the relevant orders of the authorities of the department concerned, including the appellate orders, if any, against which the appeal is filed to the Tribunal by the appellant and other documents, if any : [Provided that it shall not be necessary for the applicant to file copies of the documents which have already been filed with the related appeal.] (6) Any application which does not conform to the above requirements is liable to be summarily rejected. (7) Subject to any general or special orders of the President in this behalf, an application for stay shall be decided by the Bench having jurisdiction to hear the appeal to which the application relates. RULE 41. Orders and directions in certain cases-The Tribunal may make such orders to give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. (Emphasis supplied) 19. As seen, Rule 18 postulates that Appellate Tribunal shall notify the date and place of hearing of application or appeal. It is to be noted once an application for dispensing with the predeposit is disposed of what remains on record is the appeal. Under Rule 19 on the day fixed for hearing of the appeal the appellant shall be heard. Significantly, Rule 20 stipulates that if the appellant does not turn up at the time of hearing on the day fixed for hearing or another day to which hearing may be adjourned, the Appellate Tribunal has the discretion either to dismiss the appeal for default or hear and decide on merits. That apart Rule 28A(6) which deals with the "Procedure for filing and deposit of stay petitions" provides that a stay application is liable to be summarily rejected if an application does not conform to the requirements under Rules 28A(1) to (5). That apart Rule 28A(6) which deals with the "Procedure for filing and deposit of stay petitions" provides that a stay application is liable to be summarily rejected if an application does not conform to the requirements under Rules 28A(1) to (5). Hence, after applications for stay are disposed of as Rules postulate either an appeal can be dismissed for non-appearance of the petitioner or it has to be decided on merits on the day fixed for hearing of appeal, the order of the Appellate Tribunal directing dismissal of appeals on the day of compliance is clearly contrary to the Rules. Dismissal of appeals on the ground of non-compliance of the directions directing pre-deposit, ignoring section 35C(2A) and the Rules as noted is also contrary to Rule 41 which empowers the Appellate Tribunal to pass orders to prevent abuse of its process or to secure the ends of justice. Moreover, such an order passed by the Appellate Tribunal dismissing the appeal also infringes on the fundamental rights guaranteed under Article 14 of the Constitution of India. Hence, there is no doubt that the orders passed by the Appellate Tribunal dismissing the appeals for non-compliance of its orders directing predeposit on the respective dates of compliance were illegal. 20. The third issue which calls for consideration is whether the Appellate Tribunal was justified in dismissing the appeals during the pendency of the writ petitions challenging its order of predeposit. It appears that in i) W.P. No. 261 of 2008; Promising Export vs. Union of India & Ors. ii) W.P. No. 1161 of 2008 ; Indrajit Jash vs. Union of India & ors iii) W.P. No. 2428(W) of 2008 ; Sri Krishna Limited vs. Union of India & ors. and iv) W.P. No. 4006(W) of 2008; Suresh Goyel & sons vs. Union of India & ors. the Appellate Tribunal was intimated, as it appears from the affidavits of service affirmed, that writ petitions were filed challenging its orders directing predeposit. However, in spite of such communication, the Appellate Tribunal took up the matter on the respective dates fixed for reporting compliance regarding deposit and dismissed the appeals as it found that deposits were not made as directed. However, in spite of such communication, the Appellate Tribunal took up the matter on the respective dates fixed for reporting compliance regarding deposit and dismissed the appeals as it found that deposits were not made as directed. In this context it is to be noted that it is evident from the fourth paragraph of the order dated 7th July, 2008 passed in the appeal of Indrajit Jash that the Appellate Tribunal was well aware about the pendency of the writ petition before the High Court. 21. Now was it proper for the Appellate Tribunal to dismiss the appeals during the pendency of the writ petitions? In our judicial system there is a hierarchy of Tribunals and Courts. One is free to assail even an interim order passed by an authority or Tribunal or Appellate Tribunal before a superior authority or Court. It is common the authority whose order is under challenge awaits the verdict of the superior authority. However, as seen, the Appellate Tribunal had dismissed the appeals during the pendency of the writ petitions. Thus, the petitioners have been non-suited. In my view, since in all the four appeals the Appellate Tribunal had the knowledge about the filing of the writ petition challenging its order, it was unjust and highly improper on its part to pass orders dismissing the appeals. It also amounts to interference with the due course of justice. In this regard it is appropriate to refer to the judgment passed by this Court in Haripada Poddar vs. S.R. Das, Secretary to the Government of West Bengal, reported in 1970 Lab. IC 930, relied on behalf of the petitioner, wherein while dissenting from the judgment passed by the Allahabad High Court in Dwarka Prasad vs. Krishna Chandra, AIR 1953 All 600 , it was held as under: "9......... It is quite clear from the facts already stated that the opposite party had information of the proceeding pending in this Court when he made the order dated November 16, 1968. It is quite clear from the facts already stated that the opposite party had information of the proceeding pending in this Court when he made the order dated November 16, 1968. In the circumstances of the case, I have no doubt that the conduct of the opposite party in seeking to proceed with the departmental inquiry in spite of his knowledge of the writ petition pending in this Court was a calculated move to put pressure on the petitioner not to proceed further with the case; it was also meant as a threat that if the petitioner disregarded the warning, he must be prepared to face the consequences of the disciplinary proceeding. That such conduct amounts to a Contempt of Court is clear in view of the law stated by the Supreme Court in the said two decisions. 10.........The stream of justice, it is often said, must be allowed to flow free, and any obstruction to its passage has been held to be an act of contempt. 12............. When a proceeding can be called imminent may sometimes be a disputed question and will have to be decided on the facts of a particular case but that, in my opinion, is hardly a valid reason for holding that there can be no contempt if no proceeding is pending in Court. I am, therefore, unable to agree with the view expressed in the Allahahad case which is also not shared by any of the other High Courts as would appear from the decisions I have referred to above. 13. Thus, both on reason and on the authorities, it is clear that the offence of contempt may be committed also in respect of proceeding that are imminent but not actually commenced provided the person charged with contempt had knowledge that proceedings were about to be launched. In the instant case, the opposite party had knowledge of the fact from the notice demanding justice served on him that the petitioner was about to move a writ petition in this Court, and yet he passed the order dated October 11, 1968, suspending the petitioner, and that also because of the very fact that he was informed of the intending proceeding. This is a conduct which, in my opinion, clearly constitutes a contempt-......" 22. This is a conduct which, in my opinion, clearly constitutes a contempt-......" 22. The learned Single Judge had made these observations in contempt proceedings arising out of writ petition where the petitioner was placed under suspension with immediate effect until further orders pending drawing up of formal proceedings against him because the petitioner, through his learned Lawyer had furnished a notice, received by the State on 9th October, 1968, calling upon the State to rescind the order of transfer dated 27th September, 1968 and had, thereafter, moved the Writ Court on 11th October, 1968. Therefore, the law is one can be held guilty of contempt even if one blocks the free flow of justice not only in a pending proceeding but even in a proceeding which is "imminent" or about to happen. As seen in the instant four appeals, though the Appellate Tribunal was notified in advance about the pendency of the writ petitions challenging its orders, yet it had passed orders dismissing the appeals. In my view as the law laid down in Haripada Poddar (supra) applies and as discussed, it was improper for the Appellate Tribunal to dismiss the appeals during the pendency of the petitions as it is against the principles of fair play and dispensation of justice. 23. Before dealing with the fourth issue let the matters be examined, individually, in brief. W.P. No. 1161 of 2008, Indrajit Jash Vs. Union of India & Ors. 24. The grievance of the petitioner is that the adjudicating authority had imposed penalty on the writ petitioner without issuing any show cause notice on the petitioner/assessee. Being aggrieved and dissatisfied he had preferred an appeal and an application for stay before the Appellate Tribunal. The Appellate Tribunal on 22nd May, 2008 had passed an order recording that the learned Advocate for the appellant had made an offer to pre deposit 25% of the penalty imposed without conceding their right to argue. Accepting such offer, directions were passed by the Appellate Tribunal for predeposit of 25% of the penalty imposed on each of the appellants. It was recorded that the balance would remain waived during the pendency of the appeal. According to the petitioner no such concession was made by the learned Advocate and thus such recording was wrong and incorrect. Further there cannot be concession on a point of law. It was recorded that the balance would remain waived during the pendency of the appeal. According to the petitioner no such concession was made by the learned Advocate and thus such recording was wrong and incorrect. Further there cannot be concession on a point of law. Referring to the show-cause notice dated 29th December, 2006 and the adjudication order dated 30th November, 2007 it was also argued that the notice to show cause was issued on the company and not on the petitioner in his individual capacity and the Appellate Tribunal without going into the said question whether a show-cause notice was issued on the writ petitioner under section 124 of the Customs Act, had passed the order on 22nd May, 2008. According to the petitioner, as there was violation of fundamental right guaranteed under Article 14 of the Constitution of India, thus the writ petition. Learned Advocate appearing on behalf of the respondent relying on the affidavit-in-opposition submitted that the order passed by the Appellate Tribunal was just and proper and the writ petition is not maintainable. The petitioner, if aggrieved, should have preferred statutory appeal. 25. In my view since in the order dated 22nd May, 2008 there is no discussion regarding the issuance of show-cause notice under section 124 of the Customs Act, on the petitioner in his individual capacity, it amounted to violation of fundamental rights guaranteed under the Constitution of India. Hence, the writ petition is maintainable. Further as the Appellate Tribunal had directed predeposit on the basis of concession which is disputed by the petitioner, in my view, the Appellate Tribunal should consider the matter afresh. W.P. No. 1016 of 2008, Shree Gobinddeo Glass Works Ltd. vs. Union of India & Ors. 26. In this writ petition the petitioner has challenged the orders dated 21st September, 2005, 12th January, 2006 and 29th November, 2007 on the ground that the orders passed are not speaking orders and the point of undue hardship was not considered. Submission was that the revenue had no case is evident from the submission of the learned departmental representative as recorded in paragraph 2 of the order dated 21st September, 2005. Submission was that the revenue had no case is evident from the submission of the learned departmental representative as recorded in paragraph 2 of the order dated 21st September, 2005. Moreover, though it was mentioned in the application for modification of the stay order dated 21st September, 2005 that the company was registered with the BIFR and as it is evident from the order dated 4th January, 2007 of the BIFR, that the company had become sick, yet the Appellate Tribunal passed the order dated 29th November, 2007 ignoring the factual aspects. As the BIFR in its order had accepted the fact that the petitioner company was sick, considering the facts in Vijay Packaging System Limited vs. Commissioner of Customs and Central Excise (A.P.), reported in 2000(118) ELT 553 (SC), where the company was merely before the BIFR, the petitioner was entitled to waiver of predeposit. Moreover, the order directing dismissal of appeal is violative of Article 14 of the Constitution of India. Learned advocate appearing on behalf of the respondent submitted that as the petitioner did not challenge the initial order dated 21st September, 2005, no order may be passed. 27. I find on 29th November, 2007 the Appellate Tribunal while dismissing the appeal on the date of compliance for non-compliance of the order directing predeposit had recorded that "The Assistant Registrar is directed to examine the case records and all such cases where the date of compliance is over, the cases should be listed for immediate hearing and dismissal of appeals". Such order, in my view, is discriminatory and violative of Article 14 as in the case of the petitioner appeal was dismissed on the day of reporting compliance, whereas in the case of other appeals directions were issued for listing for hearing and dismissal. Further since the Appellate Tribunal while passing the order dated 29th November, 2007 did not consider the order dated 4th January, 2007 passed in presence of the Collector, Central Excise, Customs House, Kolkata by the BIFR and as I find the application for' modification was not considered, the orders impugned cannot be sustained. W.P. No. 2248(W) of 2008, Shree Krishna Ltd. & Anr. vs. Union of India & Ors. 28. W.P. No. 2248(W) of 2008, Shree Krishna Ltd. & Anr. vs. Union of India & Ors. 28. In this writ petition the petitioner has challenged the order dated 17th December, 2007 passed by the Appellate Tribunal and also the order dated 4th February, 2008 passed by a learned single member of the Appellate Tribunal by filing a supplementary affidavit. So far as the order dated 17th December, 2007 is concerned it has been challenged mainly on the ground that the Appellate Tribunal without considering and appreciating the financial hardship had directed to make a predeposit of Rs.10 lakhs and had fixed the matter for compliance on 4th December, 2008. So far as the order dated 4th December, 2008 is concerned it was submitted since the amount of duty and penalty exceeded 10 lakh rupees, the order of the learned single member in dismissing the appeal is in gross contravention of section 35D read with sub-rule (7) of Rule 28A of the Rules. 29. In my view, since admittedly the demand is Rs.68,09,260/- and penalty is Rs.1 crore as evident from the order in original dated 31st March, 2005, the learned single member had exceeded his jurisdiction in passing the order dated 4th February, 2008 as it was in violation of section 35D(3)(a) and (b) of the Central Excise Act and thus, the said order cannot be sustained. So far as the order dated 17th December, 2007 is concerned since I find from paragraph 34 of the said order there has been no deliberation on the financial aspect of the company, the order cannot be sustained. The Appellate Tribunal shall also have to examine whether penalty can exceed duty and whether mere reference to Rule 173Q of the Central Excise Rules, 1944, as has been recorded by the Commissioner of Central Excise, Kolkata II. Commissionerate, Kolkata in its order, is sufficient to sustain an order in view of the law laid down in the judgment in Amrit Foods vs. Commissioner of Central Excise, U.P. reported in 2005(190)ELT (SCJ)433, wherein it has been held by the Apex Court that the assessee must be put on notice as to the exact nature of contravention under the provisions of 173Q. W.P. No. 230 of 2008, Shaman Ispat Ltd. & Anr. vs. Union of India & Ors. 30. W.P. No. 230 of 2008, Shaman Ispat Ltd. & Anr. vs. Union of India & Ors. 30. In this petition the petitioner has challenged the orders dated 14th June, 2007, 31st July, 2007 and 19th November, 2007. It was submitted on behalf of the respondent that since the writ petition was moved after the order dated 19th November, 2007 was passed by the Appellate Tribunal, the petitioner is estopped from challenging the orders dated 14th June, 2007 and 31st July, 2007. Moreover, the Appellate Tribunal was justified in passing the order dismissing the appeal since the appellant had failed to deposit in spite of repeated opportunities granted. The grievance of the petitioner is that while passing the order dismissing the appeal, the miscellaneous application filed on 16th November, 2007 was not considered at all. Moreover, the Appellate Tribunal in none of the orders had considered the application for stay on merit. 31. Perusing the orders under challenge I find that nowhere the Appellate Tribunal had considered the stay petition as well as the miscellaneous application on its merit. In fact the orders are cryptic and without reasons. Therefore the orders dated 14th June, 2007, 31st July, 2007 and 19th November, 2007 under challenge cannot be sustained. W.P. No. 261 of 2008, Promising Exports Ltd. & Anr. vs. Union of India & Ors. 32. In this writ petition the petitioner has challenged the order dated 21st January, 2008 passed by the Appellate Tribunal on the ground that as the customs authorities had certified the exports made, as, transactions were through regular banking channels and there was no complaint from the importer, the order under challenge, holding the appellants do not have a prima facie case, cannot be sustained. Moreover, the bills of exports have not been challenged by the authorities by filing appeal against the orders and hence the Assistant Commissioner had no jurisdiction to issue show-cause notice which the petitioner had replied. It was argued assuming there was complicity on the part of the customs officials as evident from the order impugned, yet there was no direction for taking steps against the said officers. 33. Perused the order dated 21st January, 2008 under challenge. Paragraphs 1 to 5 contain the arguments advanced on behalf of the petitioner. Paragraph 6 of the order contains the reasons. I find that the stay application has not been considered at all. 33. Perused the order dated 21st January, 2008 under challenge. Paragraphs 1 to 5 contain the arguments advanced on behalf of the petitioner. Paragraph 6 of the order contains the reasons. I find that the stay application has not been considered at all. Merely stating in the order that order is being passed after hearing the both sides, after perusing the records and the learned members were satisfied and that the main appellants do not have a prima facie case for waiver of predeposit, are not sufficient to justify an order. In my view, there should have been deliberation and formation of opinion which should be evident from the order. Since those are absent, the order impugned cannot be sustained. W.P. No. 4006(W) of 2008, Suresh Goyel and Sons vs. Union of India & Ors. 34. In this writ petition the petitioner has challenged the order dated 1st February, 2008 passed by the Appellate Tribunal principally on the ground that the additional evidence adduced before the Appellate Tribunal was not at all taken into consideration. The stay application, as evident from the order impugned was not at all considered and the order of predeposit was passed in a routine manner. 35. Perused the order impugned. Paragraphs 1, 2 and 3.1 of the order under challenge take note of the submission made by the parties before the Appellate Tribunal. Paragraph 4.1 speaks about the six issues before the adjudicating Commissioner. Paragraph 4.2 speaks of issues and how those have been dealt by the authority. In paragraph 5 I find that the Appellate Tribunal has jumped to a conclusion that no legal infirmity could be found in the order passed by the adjudicating authority. Rather the Appellate Tribunal has appreciated that the authority examined issues threadbare in the interest of justice since the order of adjudication had to be passed exparte. 36. It is evident that while passing the order the Appellate Tribunal did not consider the additional evidence produced though section 35C postulates consideration of additional evidence, if necessary. No reason has been cited for non-consideration of such evidence. I find from paragraph 5 of the order impugned that there is no deliberation on the materials on record. In fact there is no formation of "opinion" as postulated in proviso to section 35F. No reason has been cited for non-consideration of such evidence. I find from paragraph 5 of the order impugned that there is no deliberation on the materials on record. In fact there is no formation of "opinion" as postulated in proviso to section 35F. Unless there is independent consideration, simply quoting the order passed by the adjudicating authority does not make the order passed by the Appellate Tribunal bona fide. Therefore, the order dated 1st February, 2008 cannot be sustained. 37. Now dealing with the fourth issue it is evident from a reading of proviso to section 35F that the Appellate Tribunal has been granted the discretion to dispense with the deposit, pending appeal, if it is of the 'opinion' that deposit would cause "undue hardship" to the appellant. Therefore, the Appellate Tribunal has to form an 'opinion' which should be evident from the order directing predeposit. The Supreme Court in Vijay Prakash D. Mehta (supra) held that "The discretion must be exercised on relevant materials honestly, bona fide and objectively. Once that position is established it cannot be contended there was any improper exercise of the jurisdiction by the Appellate Authority". Therefore, it has to be looked into whether while passing the order the relevant facts and materials were considered in honest and bona fide manner. In my view, from a reading of each of the orders under challenge, the relevant materials which were on record were not considered honestly, bona fide and objectively and hence, there was no formation of 'opinion' as evident from the orders impugned. Thus, there was improper exercise of jurisdiction by the Appellate Tribunal. 38. During hearing a point was raised on behalf of the respondent regarding the maintainability of the writ petitions on the ground of availability of alternative remedy to the High Court under section 35G of the Central Excise Act or section 130 of the Customs Act. It is well-settled that the said right" of appeal is not automatic and would be maintainable when the case involves substantial question of law being condition precedent for filing of appeal. However, there is no Constitutional fetter in invoking" the extraordinary jurisdiction even where an alternative remedy exists. Therefore, the writ petitions are maintainable. 39. Hence, for the reasons as enumerated in this judgment the impugned orders are set aside and quashed. The writ petitions are allowed. However, there is no Constitutional fetter in invoking" the extraordinary jurisdiction even where an alternative remedy exists. Therefore, the writ petitions are maintainable. 39. Hence, for the reasons as enumerated in this judgment the impugned orders are set aside and quashed. The writ petitions are allowed. The Appellate Tribunal is directed to restore the appeals which were dismissed, to its file and number. Thereafter, let the appeals and applications for stay be heard expeditiously after due notice in accordance with the rules. 40. No order as to costs. Later : 41. After judgment is delivered learned Advocates for the respondents pray for stay of the operation of the judgment and order. Learned Advocate appearing on behalf of the petitioner opposes the prayer for stay. Prayer is considered and stay refused. 42. Urgent xerox certified copy of this judgment and order, if applied for, be given to the appearing parties on priority basis. Writ petitions allowed.