AUGUST 23, 2022

By R K Singh

RECENTLY, CESTAT summarily dismissed the appeal of Dujodwala Paper Chemicals - 2022-TIOL-736-CESTAT-MUM for non-appearance by the appellant in person or through an advocate, observing as under:

"In view of the above provisions, this appeal is liable for dismissal on the ground of default in appearance in terms of Rule 20 of the CESTAT (Procedure) Rules, 1982."

2. Such summary dismissal is held to be unsustainable by Supreme Court. In the case of Balaji Steel Re-Rolling Mills Ltd - 2014-TIOL-92-SC-CX-LB, Supreme Court held that CESTAT ought to issue speaking order on merits even if the appellant does not appear; relevant part of para 13 of the said Supreme Court judgement is reproduced below:

"13. ……… we are of the considered opinion that the Tribunal could not have dismissed the appeal filed by the appellant for want of prosecution and it ought to have decided the appeal on merits even if the appellant or its counsel was not present when the appeal was taken up for hearing…… "

3. Thus the referred CESTAT order is simply unsustainable.

4. At this juncture, for the sake of ready reference, the said rule 20 is reproduced below:

Rule 20. Action on appeal for appellant's default. - Where on the day fixed for the hearing of the appeal or on any other day to which such hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for default or hear and decide it on merits:

Provided that where an appeal has been dismissed for default and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the dismissal and restore the appeal."

As is evident, in the event of default in appearance on the part of the appellant, the said rule allows CESTAT the discretion to summarily dismiss the appeal for default.

5. It is pertinent to note that in the case of Balaji Steel Re-Rolling Mills (supra), the department specifically cited the said rule 20 to justify summary dismissal by CESTAT. Supreme Court after taking due notice of the said rule and after considering the relevant precedents unequivocally held to the effect that even in case of default on the part of the appellant (i.e. even if the appellant or its counsel was not present when the appeal was taken up for hearing),CESTAT ought to decide the appeal on merits.

6. Thus, the said rule to the extent it allows CESTAT discretion to summarily dismiss an appeal on the ground of non-appearance of the appellant or its counsel is clearly ultra vires the said decision of the Larger Bench of Supreme Court.

7. As the said decision of Supreme Court was rendered about eight years ago, it is surprising that the said (ultra vires) rule continues to exist unamended.

[The author is former Member CESTAT and Sr. Partner, TLC Legal Advocates. The views expressed are strictly personal.]