CESTAT Restores Appeal After Notice Sent to Wrong Address

Damodar Nayak Vs Commissioner of Customs (Export Promotion) (CESTAT Mumbai)

Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) restored an appeal after two years, observing that the appellant was not served with a notice of the final hearing due to an incorrect address provided by the previous advocate. The tribunal noted that the earlier counsel was untraceable, leading to a lack of communication with the appellant.

Summary of Judgement 

Background:

1. Appellant had filed Appeal dated 04.08.2012 with the Honorable CESTAT, Mumbai against The O/O No. CAO/29/2012/CAC/CC/BKS dated 20.06.2012 passed by the Commissioner of Customs which has imposed penalty of Rs 1,00,000/- under sect 112(b) of the customs act 1962, as co-notice to principle violator of the terms of DEEC schemes by diverting imported goods to local market without fulfilment of export obligations.

2. Appellant being a senior citizen and a lay men had appointed one advocate to look into the  matter as appellant was not aware of the court proceeding and the business of appellant was already closed at the time of filing of appeal.

3. At the time of filing the appeal the advocate on record mistakenly put his own office address instead of appellant.

4. matter had been listed many times and stay application was allowed.

5. From 2018 advocate on record was not traceable as he had moved to Delhi.

6. on 09.11.2021 CESTAT issues notice to appellant which was unclaimed hence on 17.01.2022 CESTAT dismissed  the appeal for default and non-prosecution under Rule, 20 of the CESTAT (Procedure) Rules, 1982.

7. The Applicant came to know about the order, only after receiving the recovery notice, from the department, informing that the matter was dismissed on 03.02.2023.

8. The appellant filed restoration application (Customs ROA Application No. 85266 of 2023) on 03/03/2023

Appellant’s stand:

New advocate Representing Restoration application:- Shri Saurabh Rajan Mashelkar

1. The appellant had not received any order copy or notice of hearing as the address given in Appeal memo was of Advocate who had closed his business and was not traceable for last 5 years.

2. Appellant came to knew about the rejection in the month of February 2023 vide recovery notice received from the department.

3. Appellant states that department was also well aware of the right address but did not inform the appellant prior.

4. The Appellant states that, it is well settled law that, the client should not suffer due to error of advocate. The Honorable Tribunal should have decided the case on merit, before rejecting Appeal under Rule 20 of customs act 1962

Respondent’s stand 

• Authorised Representative for the RespondentDepartment/opposite party, on verification of the appeal paper book and copy of the restoration notice, admits that the contention regarding wrong mentioning of address for correspondence in the appeal memo is true

Case relied :-

• The Hon’ble Supreme Court In the case of BALAJI STEEL RE-ROLLING MILLS LTD – 2014-TIOL-92-SC-CX-LB , 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.
• The High Court of Delhi in the case of DELHI INTERNATIONAL AIRPORT LTD. Versus COMMISSIONER OF CGST AND CENTRAL EXCISE APPEALS, DELHI-II 2023 (2) Centax 160 (Del.) held that “Appeal to Appellate Tribunal – Ex parte order – Dismissal of appeal for non-prosecution – Final Order and Restoration-Dismissal Order passed by Tribunal without affording opportunity of being heard to petitioner – Same was in violation of principles of natural justice – Admittedly CESTAT while passing Final Order and even Restoration-Dismissal Order erred in law in not hearing matter on merits – CESTAT had to at least ensure that petitioner served notice to appear at correct address especially in view of fact that petitioner’s appeal dismissed for non-prosecution – Notices sent out to address of petitioner mentioned in Restoration Application but instead sent to address as set forth in its appeal, thereby showing non – application of mind by Tribunal – Even otherwise, petitioner’s addresses and contact details in addition to being available online could have easily been ascertained by CESTAT – Clearly, view of CESTAT in both Final Order and Restoration-Dismissal Order were contrary to law and not sustainable – Appeal restored for fresh disposal on merits – Section 35C(1) of Central Excise Act, 1944. [paras 2.1, 6, 7, 7.1 and 7.3]”
• The High Court of Judicature for Rajasthan at Jaipur in the case of MANU YANTRALAYA (P) LTD. Versus COMMISSIONER OF C. EX., JAIPUR-I 2022 (64) G.S.T.L. 448 (Raj.) held that “Appeal to Appellate Tribunal – Restoration of appeal – Matter was dismissed in default due to non-appearance of appellant without any genuine reason and opportunity – CESTAT should not dismiss appeal for absence of appellant – CESTAT ought to decide appeal on merits even if appellant or its counsel was not present when appeal was taken up for hearing – Appeal was restored and it was to be heard on merits”
• The CESTAT, West Zonal Bench, Mumbai in the case of MAHENDRA TRADING CO.Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I held that “Appeal – Restoration of appeal after 8 years of dismissal – Tribunal not empowered to dismiss appeal for default of appearance – Notice for hearing not available in file – Counsel for appellant expired long back – Appeal dismissed earlier for non-prosecution to be restored and heard on merits – Section 35C of Central Excise Act, 1944. [para 6]”

Judgement:-

Appellant has shown sufficient cause for his non-appearance on the date his case was listed for hearing and it is a fit case in which appeal is required to be restored back to file.

FULL TEXT OF THE CESTAT MUMBAI ORDER

ROA application is heard from both the sides and taken up for order.

2. Learned Counsel for the Appellant submits that Appellant is a lay man having no knowledge of procedure in filing appeal before the Tribunal and his previous conducting Counsel Mr. Rajeev Argarwal, who is not traceable in Mumbai for last 5 years, had put his chamber’s address of Churchgate in the appeal memo as address for correspondence, for which no notice could be served on the Appellant, nor even the final order of dismissal passed by this Tribunal was served on him and only when recovery notice was received by the Appellant in his actual Shivaji Park address (as shown in Exhibit-B at page 11 of the ROA application), Appellant came to know that he remained unrepresented during hearing of the appeal and that resulted in dismissal of his appeal. He further submits that there is no other intention of the Appellant who had reposed faith in his Counsel that was belied and ultimately he would be the sufferer if the order of dismissal of his appeal is not set aside and the same is not restored back to file.

3. Learned Authorised Representative for the Respondent- Department/opposite party, on verification of the appeal paper book and copy of the restoration notice, admits that the contention regarding wrong mentioning of address for correspondence in the appeal memo is true.

4. Having regard to the submissions made by both the sides, I am of the considered view that Appellant has shown sufficient cause for his non-appearance on the date his case was listed for hearing and it is a fit case in which appeal is required to be restored back to file. Accordingly the miscellaneous application for restoration of appeal is allowed and the order of dismissal passed by me on 17.01.2022 is hereby set aside.

5. The appeal is restored back with direction to both the parties to come ready for the argument on 02.2024.

6. Appellant is directed to make amendment of the cause-title by providing correct address for correspondence within a fortnight

(Dictated and pronounced in the open Court)