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Judgment
Heard Mr. Jetly, learned counsel for the appellant. None appears for the respondent in spite of service.
This appeal, directed against the order of the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Mumbai ("Tribunal" for short), was admitted by this Court vide order dated 12th July, 2006 to consider the substantial questions of law raised therein. The questions sought to be raised can be reframed as under:
Whether the Tribunal was right in setting aside confiscation of land, building, plant and machinery by a cryptic and unreasonable order after having confirmed the imposition of penalty on the appellant for availing credit to which the assessee was not entitled?
The Tribunal has held that the appellant was not entitled to take credit as such the same was rightly disallowed by the Adjudicating Authority. The Tribunal, further held that the penalty imposed on the appellant was justified. At the same time, confiscation of the land, building, plant and machinery with option to the appellant to redeem the same on repayment of fine has been set aside by the Tribunal in the following words :
As regards the confiscation of land, building, plant and machinery with an option to the appellant to redeem the same on payment of redemption of fine, we set it aside as the facts do not warrant such draconian action. In the result, the appeal is partly allowed by setting aside only the order of confiscation of land, building, plant and machinery.
Reading of the aforesaid paragraph, unequivocally, goes to show that the Tribunal did not dwell upon the facts and circumstances of the case which compelled the Tribunal to set aside the confiscation of land, building, plant and machinery. This order is a cryptic and unreasoned order.
In the recent judgment in the case of State of Himachal Pradesh v. Paras Ram and Ors, passed in Crim. Appeal No. 1 of 2008, decided on January 3, 2008, the Apex Court has observed as under:
Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason in an indispensable part of sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made in other words, a speaking out. The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi judicial performance.
In the result, question of law is answered in favour of the Revenue and against the assessee. Impugned order is set aside to the extent the confiscation is set aside. Matter is remitted back to the Tribunal with direction to consider afresh with expeditious despatch, at any rate, within three months from the date of receipt of copy of this order.
Appeal stands disposed of in terms of this order with no order as to costs.