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Judgment
Heard.
Perused appeal.
This appeal is directed against the order dated 3rd September, 2010 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (''Tribunal" for short). The question sought to be canvassed by the learned counsel for the appellant is that whether the Tribunal was justified in directing the appellant in depositing Rs. 97 lakh u/s 35F of the Central Excise Act, 1944 ("Act" for short) without considering the right to claim cenvat credit on input services rendered prior to 1st March, 2006 without recording reasons in support of the view taken.
3.1 The learned counsel for the appellant is justified in criticizing the order of the Tribunal for want of reasons and contending that the impugned order is arbitrary. He submits that the impugned order of the Tribunal is arbitrary and suffers from non-application of mind.
The issue is : whether it was permissible for the Tribunal to brush aside the submission advanced by the appellant without threadbare discussion and without recording reasons in support of the view taken.
The impugned order passed by the Tribunal does not state any reasons for the view taken. In absence of reasons in support of the order it is difficult to assume that the Tribunal had properly applied its mind before passing the order directing pre-deposit.
It is, no doubt, true that there is no precise statutory or other definition of the term "arbitrary". Arbitrariness in making an order by the authority manifest itself in different forms. Non-application of mind by the authority making an order is only one of them. Every order passed by the judicial or quasi-judicial authority must disclose due and proper application of mind by the person making order. This may be evident from the order itself or the record contemporaneously maintained by the authority. Application of mind is best demonstrated by disclosure of its mind by the authority making the order. Absence of reasons either in the order passed by the authority or in the record contemporaneously maintained, is clearly suggestive of the order being arbitrary and in breach of the principles of natural justice hence illegal and unsustainable.
In the result, impugned order is set aside. Prayer for dispensing with pre-deposit is restored to the file of the Tribunal with direction to the Tribunal to consider it afresh by a reasoned order following principles of natural justice. Appeal is allowed with no order as to costs.