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PETITIONER: M/S J.K. SYNTHETICS LTD.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE

DATE OF JUDGMENT:       28/08/1996

BENCH: BHARUCHA S.P. (J) BENCH: BHARUCHA S.P. (J) PARIPOORNAN, K.S.(J)

CITATION:  JT 1996 (7)   674        1996 SCALE  (6)299

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      The appellant  had  filed  a  refund  claim  which  was rejected by  the Assistant  Collector of Central Excise. The appellant filed an appeal before the Collector (Customs) and the appeal  was allowed.  The respondent,  the Collector  of Central Excise,  filed an  appeal  thereagainst  before  the Customs,  Excise   and  Gold  (Control)  Appellate  Tribunal (CEGAT). The appeal was on board for hearing on 31st August, 1987. When the appeal reached hearing, the appellant (before us)  was  not  represented.  CEGAT  heard  the  departmental representative in  support of  the appeal and decided it ex- parte against  the appellant  on merits. At about 11.30 A.M. on the  same day  CEGAT was  told that  the counsel  for the appellant had  been held  up and would soon reach CEGAT. The informant was  told that  the appeal  had already been heard and disposed of. The bench having risen, the counsel for the appellant met  the Vice  President of  CEGAT in his chambers and, explaining  why he had been held up, requested that the ex-parte order  on the  appeal be recalled and the appeal be heard on  merits. The counsel was told, very rightly, to put his request  in writing.  An application  in this behalf was filed. When  the application  was heard, learned counsel for the appellant  stated what had delayed him, relied upon Rule 41 of  the CEGAT  (Procedure) Rules,  1982, and  prayed  for recall of  the order  dismissing the  appeal on  merits. The learned  departmental   representative  representating   the respondent,  "while   submitting  that   he  would  have  no objection to  the order  being  recalled,  stated  that  the Tribunal,  in   view  of   Rules  20   and   21   of   CEGAT (Procedure)Rules, 1982,  had no power to recall or set aside such  an   order  passed   on  merits   in  absence  of  the respondents". CEGAT  considered the  provisions of  Rules 20 and 21  and of  Rule 41.  It observed  that it could be seen from Rules  20 and  21 that  whereas the  proviso to Rule 20 provided for  restoration of  an appeal dismissed in default on sufficient cause being shown, there was no such provision

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with respect  to an  appeal heard ex-parte in the absence of the respondent  to it  under Rule 21. CEGAT noted the nature and true  character of  the order  which it passed. It noted the decision  of this  Court in  Commissioner of Income-Tax, Madras vs.  S.Chenniappa Mudaliar,  74 ITR 41. It found that where a respondent had not availed of the opportunity to put forward  his   case,  CEGAT   was  not   absolved   of   its responsibility to decide. It held:      Therefore, even  if respondent  was      not present  when  the  appeal  was      called  for   hearing,  would   not      absolve the  Tribunal from deciding      the appeal  on merits  on the basis      of material on record. That in fact      the  Tribunal   did.  The  decision      taken  by   the  Tribunal   in  the      absence of the respondent is not an      ex-parte  decision   or  decree  as      understood under  the Code of Civil      procedure or  in a  Civil Court and      if it  is a  decision on merits, we      can review  or set  aside the same.      Recalling the order passed on merit      would in  fact  amount  in  setting      aside or reviewing an order decided      on merit. In doing so, the Tribunal      would be  exercising a  power which      is not  vested in  it by law. We do      not think  that in such a situation      Rule 41 of CEGAT (Procedure) Rules,      1982 could  be pressed  into aid by      the appellants  in support of their      request for recalling the order."      This  is   the  Judgment   and  order  of  CEGAT  under challenge. Learned  counsel for the appellant submitted that Rule 41  was wide enough to take within its sweep the recall of an  order passed be the merits of an appeal if such order was necessary  to secure  the ends  or justice.  Mr.  Joseph Vellappally, learned counsel for the respondent, fairly, did not disagree.      Our attention was invited to the judgment of this Court in Income  Tax Officer.  Cannore vs. M.K. Mohammed Kunhi, 71 ITR 815,  where the  question related  to the  powers of the income Tax  Appellate Tribunal  under  Section  254  of  the Income Tax  Act, 1961. Reliance was placed upon Sutherland’s Statutory Construction,  Third Edition,  Domat’s Civil  Law, Volume I,  and Maxwell  on Interpretation  of Statutes, 11th Edn., to  hold that it was a firmly established rule that an express  grant  of  statutory  power  carried  with  it,  by necessary implication,  the authority  to use all reasonable means to  make such  grant effective.  The powers  which had been conferred  upon the  Tax Appellate Tribunal were of the widest  possible   amplitude  and   carried  with  them,  by necessary implication,  all powers and duties incidental and necessary  to  make  the  exercise  of  those  powers  fully effective. Having regard to its powers under Section 254, it was held  that the Tax Appellate Tribunal had impliedly been granted the  power of doing all such acts and employing such means as  were essential  and necessary  to  its  ends.  The statutory power  carried with it the duty in proper cases to make such order for staying proceedings as would prevent the appeal, if successful, from being rendered nugatory.      In  Grindlays   Bank  Ltd.   vs.   Central   Government Industrial Tribunal  & Ors.,  1981 (2)  SCR  341,  the  same principles  were  applied  in  relation  to  the  Industrial

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Tribunal constituted  under the provisions of the Industrial Disputes Act.  It was  held that where a party was prevented from appearing  at a hearing due to sufficient cause and was faced with  an ex-parte  award, it  was as  if the party was visited with  an award  without notice  of the  proceedings. Where an  Industrial Tribunal  proceeded to  make  an  award without notice  to a  party, the  award was  nothing  but  a nullity. In  such circumstances, the Industrial Tribunal had not only  the power  but also  the duty to set aside the ex- parte award and to direct the matter to be heard afresh. The rule  in   question  Rule  22  of  the  Industrial  Disputes (Central) Rules,  1957)  provided  that  without  sufficient cause being  shown. if  any party  to proceedings before the Industrial Tribunal  failed to attend or be represented, the Industrial Tribunal  would proceed  as if the party had duly attended or  had been  represented. If, therefore, there was no  sufficient  cause  for  the  absence  of  a  party,  the Industrial Tribunal  had the  jurisdiction  to  proceed  ex- parte. But  if sufficient  cause was shown which prevented a party from  appearing, the Industrial Tribunal had the power to set  aside the  ex-parte award.  the power to proceed ex- parte carried  with it  the power  to enquire whether or not there was sufficient cause for the absence of a party at the hearing.      Rule 20 of the CEGAT (Procedure) Rules deals with cases where the appellant has defaulted. Rule 21 empowers CEGAT to hear appeals  ex-parte. The  fact  that  Rule  21  does  not expressly state  that  an  order  on  an  appeal  heard  and disposed of  ex-parte can  be set  aside on sufficient cause for the  absence or the respondent being shown does not mean that CEGAT  has on  power to do so. Rule 41 gives CEGAT wide powers to  make such orders or give such directions as might be necessary  cr expedient  to give effect or in relation to its order  or to  prevent abuse  of  its  process  or,  most importantly, to secure the ends of justice.      If, in  a  given  case,  it  is  established  that  the respondent was  unable to  appear before  it for no fault of his own,  the ends of justice would clearly require that the ex-parte order against him should be set aside. Not to do go on the  ground of lack of power would be manifest injustice. Quite apart  from the inherent power that every tribunal and court constituted  to do  justice has in this respect, CEGAT is clothed  with express  power under  Rule 41  to make such order as  is necessary  to secure the ends of justice. CEGAT has. therefore,  the power  to set aside an order passed ex- parte against  the respondent  before it if it is found that the respondent  had, for  sufficient cause,  been unable  to appear.      It is for CEGAT consider in every such case whether the respondent who  applies for  recall of  the  ex-parte  order against him  had sufficient  cause for remaining absent when it was  passed and, if it is established to the satisfaction of CEGAT  that there  was sufficient  cause, CEGAT  must set aside the ex-parte order, restore the appeal to its file and hear it afresh on merits.      On the facts of the present case, we think it proper to allow the appellants’ application to CEGAT for setting aside the ex-parte order against it ourselves.      The appeal  is allowed.  The order  under appeal is set aside. The  application of  the appellant  for recalling the order dated  31st August,  1987, passed  by  CEGAT  ex-parte against it  is allowed. The appeal (No.590/84C) before CEGAT is restored  to its  file and shall be heard and disposed of on merits.      There shall be no order as to costs.

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