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Judgment
D.A. Mehta, J
Rule. Mr. M.R. Shah, learned standing counsel appears for the respondents and waives service of Rule. With the consent of the learned Counsel for the parties, the matter is heard finally today.
The petitioner, a public limited company, has approached this Court against the orders of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) whereby the Tribunal allowed the departmental appeal and also rejected the rectification of mistake application filed by the petitioner. Incidentally, the petitioner has also challenged the vires of provisions of Section 35C(2) of the Central Excise Act, 1944. However, the said contention has not been pressed on behalf of the petitioner.
The facts necessary for deciding the present petition, in brief, are that the petitioner became entitled to refund of Rs. 50,16,829.26 in relation to Methane produced and captively consumed by the petitioner. The petitioner was sanctioned the said refund some time in 1997. However, the third respondent preferred an appeal before the Commissioner (Appeals), Vadodara against the order in original and the said departmental appeal came to be dismissed. The department preferred a second appeal before the Tribunal. Some time in February 2000, the petitioner preferred a Miscellaneous Application seeking early hearing of the departmental appeal and the said Miscellaneous Application came to be listed on 3.5.2000. The same was thereafter adjourned to 23.6.2000. The advocate for the petitioner moved an application withdrawing the Miscellaneous Application for early hearing which was fixed on 23.6.2000. However, the Tribunal rejected the application for withdrawal and disposed of the departmental appeal on the said date viz. 23.6.2000 in absence of the petitioner or its representative, as according to the Tribunal, the issue was concluded by the decision of the Supreme Court in the case of Union of India and others Vs. Solar Pesticide Pvt. Ltd. and Another, .
The petitioner company filed an application for rectification of mistake against the aforesaid order of the Tribunal and after hearing both the sides on 30.8.2000/6.9.2000, this application for rectification of mistake came to be disposed of without rectification or recalling the final order which was passed in the appeal.
Mr. Dave, learned Counsel appearing on behalf of the petitioner submitted that the action of the Tribunal was against the statutory provisions viz. the Act and the Rules inasmuch as the Tribunal had not fixed the appeal for hearing and without issuing any notice for hearing the appeal, the Tribunal could not have disposed of the said appeal. He further assailed the order of the Tribunal whereby the Tribunal rejected the rectification application by stating that it was not necessary to hear the petitioner or its representative in view of the fact that the issue was already concluded against the petitioner by the decision of the Apex Court.
Mr. Shah, learned standing counsel appearing on behalf of the respondents-department contended that though apparently there was an error committed by the Tribunal and the respondents would have no objection if the matter was remanded to the Tribunal, it was necessary to protect the interest of the department. According to Mr. Shah, refund had already been recovered from the petitioner in pursuance of the aforesaid orders passed by the Tribunal and in case the orders were set aside by this court, the department would be called upon to refund the said amount and direction to the effect that till the Tribunal decides the appeal finally, the department must not be called upon to refund the amount, should be issued.
There is no dispute between the parties the Tribunal had not fixed the appeal for hearing and notice as regards the same had also not been issued. Though the principal issue as regards the petitioner being entitled to refund in relation to captive consumption is concluded against the petitioner by the decision of the Supreme Court in the case of Solar Pesticides Pvt. Ltd. (supra), Paras 27 and 30 of the said decision were relied on behalf of the petitioner to contend that whether duty had been passed on directly or indirectly by the petitioner had to be ascertained by the Tribunal/Authorities before invoking the principle of unjust enrichment.
As laid down by the Apex Court, it was necessary for the Tribunal to go into the question whether in fact, there would be unjust enrichment in the event of refund being ordered to be paid and it was necessary for the Tribunal to adjudicate the said question. From the order in application for rectification, we find that the Tribunal is aware of the situation that in its original order dated 23.6.2000/5.7.2000, it had not dealt with this aspect of the matter and hence, in its order of 30.8.2000/6.9.2000, the Tribunal states:
If the department has not yet granted refund the department should take note of paragraph 30 of the judgment of the Supreme Court in ''Solar Pesticides '' case and take action accordingly.
Apparently, the Tribunal did not take into consideration the fact that in case the refund had been granted and recovered by the department (as is the case) a situation would arise which cannot be set right by the aforesaid direction or observation made by the Tribunal.
In view of the foregoing facts and circumstances of the case, we quash and set aside the orders dated 23.6.2000/5.7.2000 and dated 30.8.2000/6.9.2000 passed by CEGAT in original appeal and rectification of mistake application respectively. CEGAT is directed to list the appeal for disposal after issuing notice of hearing as provided in the rules. The appeal shall be decided and disposed of in light of the decision of the Supreme Court in the case of Solar Pesticides Private Limited (supra). The petition is allowed to the aforesaid extent. Rule is made absolute. There shall be no order as to costs.