Sri Kaliswari Fireworks Pvt. Ltd. vs CESTAT, Chennai

R. Sudhakar, J.—These Civil Miscellaneous Appeals are filed by the aggrieved appellant, engaged in the business of manufacture of fireworks, falling under Chapter Heading No. 3604.10 of First Schedule to Central Excise Tariff Act, 1985, raising the following substantial questions of law:

"(i) Whether the Final Orders dated 24-1-2014 passed by the learned first respondent Tribunal suffers from the vice of principles of natural justice?

(ii) Whether the learned first respondent Tribunal erred in deciding the appeals by a learned Single Member Bench while some of the appeals on the same issue are listed to be heard before the learned Division Bench?"

Originally, the Department was of the view that the charity amount known as ''Mahamai'' collected at the rate of 1.3% was not included in the assessable value for the purpose of payment of duty.

Five show cause notices were issued by the Deputy Commissioner and subsequently, they were dropped. The Department pursued the matter by filing appeals before the Commissioner (Appeals) and by order dated 19-1-2005, the Department''s Appeals were dismissed, against which, the Department went in appeal to the Tribunal and the CESTAT, by Final Orders in Nos. 586-590 of 2011, dated 10-5-2011, allowed the Department''s Appeals on inclusion of ''Mahamai'' charges. The Tribunal directed the authorities to quantify the duty based on ''cum duty price'' concept.

The order of CESTAT was accepted by the Department and consequent to that, 45 show cause notices were issued and duty was paid even before the show cause notices were adjudicated, resulting only in levy of interest on the differential amount and the penalty came to be dropped by the Commissioner of Appeals and further appeals to the Tribunal, 45 in number, were filed as a batch, by the present appellant. Out of this quantum of appeals, 8 appeals were listed on 30-8-2013 and adjourned to 25-10-2013 and 4 appeals were listed on 6-9-2013 and also adjourned to 25-10-2013, to link with the above said 8 appeals.

All the 12 appeals were taken up on 25-10-2013 and on that day, there was no appearance on behalf of the appellant and it is the contention of the appellant that they sent a request for adjournment was made on 18-10-2013 itself and it was sent through speed post, dated 19-10-2013, to CESTAT, making a request for adjournment to post the appeals during the third week of January 2014, which proof has been filed before this Court.

It transpires that there was no intimation about the next date of hearing and therefore, the appellant did not know about the date of hearing of the appeals on 24-11-2014 and therefore, all the 12 appeals came to be dismissed by the learned Single Member, not only on the ground of non-appearance, but also on merits, based on the decision of the Larger Bench in Alembic Ltd. v. CCE, Vadodara reported in , 2013 (295) E.L.T. 535 (Tri. - LB) .

Primarily, the grievance of the appellant is that no opportunity was given to the appellant and there are totally 45 appeals relating to one issue that there should be no levy of interest on the ''Mahamai'' includible in the assessable value and therefore, there was no reason as to why the Tribunal should have dismissed only 12 appeals.

Furthermore, opportunity was denied despite a specific request made vide letter, dated 18-10-2013 and despatched on 19-10-2013, for which proof has been filed. It is the further plea of the appellant that the entire issue should have been considered as one single component in all the 45 appeals as prejudice will be caused to the appellant by virtue of the impugned order, whereby all the remaining appeals will be dismissed, relying on the present order, which has been passed ex parte.

We find that the Tribunal has passed the impugned order simply relying upon the decision of the Larger Bench in Alembic Ltd. v. CCE, Vadodara reported in , 2013 (295) E.L.T. 535 (Tri. - LB) . However, the question as to whether there is any liability to pay interest for the period of delayed payment of duty, has not been discussed in detail, more particularly, with regard to the facts in issue. Accordingly, we find merit in the present appeals.

In view of the above, the Substantial Question of Law No. 1 is answered in favour of the assessee. Since we are inclined to set aside the impugned order on the ground of violation of principles of natural justice and remand the matter to the CESTAT, there is no necessity to consider and answer the Substantial Question of Law No. 2. Accordingly, we allow these Civil Miscellaneous Appeals and set aside the Final Order, dated 24-1-2014, passed by the Customs Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, by way of remand. The undertaking given by the learned Counsel for the appellant to the effect that the appellant will not seek further adjournment, is recorded. The Tribunal is at liberty to fix the date of hearing, preferably in the month of October 2015 and the appellant is willing to co-operate with the Tribunal, without seeking adjournment on the date so fixed. The Registry is directed to return the original records to the Tribunal forthwith, for the disposal of the appeals.