M/S. J.K. SYNTHETICS LTD.versusCOLLECTOR OF CENTRAL EXCISE

                            M/S. J.K. SYNTHETICS LTD.                                      A
                                             v.
                      COLLECTOR OF CENTRAL EXCISE

                                   AUGUST 28, 1996

               [S.P. BHARUCHA AND KS. PARIPOORNAN, JJ.]                                    B

          Customs, Excise a11d Gold (Control) Appellate Tribu11al (Procedure)
    Rules, 1982.

           Rules, 20, 21 and 41-Appeal-Hearing of-Depa1tmental repre-                      C
    se11tative heard-Other party not present:-Decided ex-parte against the
    pmty-By the time message regarding co11nsel held up elsewhere and reach
    soon conveyed, Bench had 1ise11-Vice-President requested to recall the ex-
    palte order and then hear appeal on me1its-Application filed-Tribunal
    rejecting the application-On appeal held, CEGAT to consider i11 each case
    whether the pa1ty who applies for recall of expalte order against him had              D
    sufficient ca11se for remaining absent--lf it is satisfied that there was sufficient
    ca11se CEGA T to set aside the expalte order, restore the appeal and hear it
    afresh on merits.

          Commissioner of Income-Tax, Madras v. S. Chenniappa M11dalia1; 74                E
    ITR 41; Income Tax Officer, Cannore v. M.K. Mohammed Kunhi, 71 ITR
    815 & G1indlays Bank Ltd. v. Central Government Industrial Trib1111al & Ors.,
    [1981] 2 SCR 341, referred to.

         S11therland's Statutory Constmction, Third Edition, Domat's Civil Law,
    Volume I & Maxwell on Inte1pretation of Statutes, 11th Edn., referred to.              F
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3849 of
    1988.

          From the Judgment and Order dated 21.4.88 of the Customs Excise
    and Gold (Control) Appellate Tribunal, New Delhi in A.No. E/Misc.                      G
    355/87-C in Appeal No. E.D./SB/590 of 1984-C.

            Ravinder Narain, Ms. Amrita Mitra for JBD & Co. for the Appel-
    !ant.

            Joseph Vellappally and V.K. Verma for the Respondent.                          H
                                        295
f
    296                  SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

A         The following Order of the Court was delivered :

         The appellant had filed a refund claim which was rejected by the
  Assistant Collector or Central Excise. The appellant filed an appeal before
  the Collector (Customs) and the appeal was allowed. The respondent, the
  Collector of Central Excise, filed an appeal there against before the
B
  Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). The
  appeal was on board for hearing on 31st August, 1987. When the appeal
  reached hearing, the appellant (before us) was not represented. CEGAT
  heard the departmental representative in support of the appeal and
  decided it ex-parte against the appellant on merits. At about 11.30 A.M.
c on the same day CEGAT was told that the counsel for the appellant had
  been held up and would soon reach CEGAT. The informant was told that
  the appeal had already been heard and disposed of. The bench having
  risen, the counsel for the appellant met the Vice President of CEGAT in
   his chambers and, explaining why he had been held up, requested that the
D ex-parte order on the appeal be recalled and the appeal be heard on
  merits. The counsel was told, very rightly, to put his request in writing. An
   application in this behalf was filed. When the application was heard,
  learned counsel for the appellant stated what had delayed him, relied upon
   Rule 41 of the CEGAT (Procedure) Rules, 1982, and prayed for recall of
   the order dismissing the appeal on merits. The learned departmental
E representative representing the respondent, "while submitting that he
   would have to objection to the order being recalled, stated that the
   Tribunal, in view of Rules 20 and 21 of CEGAT (Procedure) Rules, 1982,
   had no power to recall or set aside such an order passed on merits in
   absence of the respondents". CEGAT considered the provisions of Rules
F 20 and 21 and of Rule 41. It observed that it could be seen from Rules 20
   and 21 that whereas the proviso to Rule 20 provided for restoration of an
   appeal dismissed in default on sufficient cause being shown, there was no
   such provision with respect to an appeal heard ex-parte in the absence of
   the respondent to it under Rule 21. CEGAT noted the nature and true
   character of the order which it passed. It noted the decision of this Court
G in Commissioner of Income-Tax, Madras v. S. C/1e1111iappa Mudaliar, 74 ITR
   41. It found that where a respondent had not availed of the opportunity to
    put forward his case, CEGAT was not absolved of its responsibility to
    decide. It held :

H            "Therefore, even if respondent was not present when the appeal
\
I
J          J.K. SYNTHETICS LTD. v. COLLECTOR OF CENTRAL EXCISE                297

             was called for hearing, would not absolve the Tribunal from decid- A
             ing the appeal on merits on the basis of material on record. That
             in fact the Tribunal did. The decision taken by the Tribunal in the
             absence of the respondent is not an ex-parte decision or decree as
             understood under the Code of Civil Procedure or in a Civil Court
             and if it is a decision on merits, we fail to see how we can review B
             or set aside the same. Recalling the order passed on merits would
             in fact amount to setting aside or reviewing an order decided on
             merits. In doing so, the Tribunal would be exercising a power which
             is not vested in it by law. We do not think that in such a situation
             Rule 41 of CEGAT (Procedure) Rules, 1982 could be passed into
             aid by the appellants in support of their request for r~alling the C
             order."


          This is the judgment and order of CEGAT under challenge. Learned
    counsel for the appellant submitted that Rule 41 was wide enough to take
    within its sweep the recall of an order passed on the merits of an appeal D
    if such order was necessary to secure the ends of justice. Mr. Joseph
    Vellappally, learned counsel for the respondent, fairly, did not disagree.


            Our attention was invited to the judgment of this Court in Income
    Tax Officer, Cannore v. M.K. Mohammed Kunhi, 71 ITR 815, where the               E
    question related to the powers of the income Tax Appellate Tribunal under
    Section 254 of the Income Tax Act, 1961. Reliance was placed upon
    Sutherland's Statutory Construction, Third Edition, Domat's Civil Law,
    Volume I, and Maxwell on Interpretation of Statutes, 11th Edn., to hold
    that it was a firmly established rule that an express grant of statutory power   F
    carried with it, by necessary implication, the authority to use all.reasonable
    means to make such grant effective. The powers which had been conferred
    upon the Tax Appellate Tribunal were of the widest possible amplitude
    and carried with them, by necessary implication, all powers and duties
    incidental and necessary to make the exercise of those powers fully effec-       G
    tive. Having regard to its powers under Section 254, it was held that the
    Tax Appellate Tribunal had impliedly been granted the power of doing all
    such acts and employing such means as were essential and necessary to its
    ends. The statutory power carried with it the duty in proper cases to make
    such order for staying proceedings as would prevent the appeal, if success-
    ful, from being rendered nugatory.                                               H
    298                   SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

A          In Glindlays Bank Ltd. v. Central Govemment Industrial Tlibunal &
    Ors., (1981] 2 SCR 341, the same principles were applied in relation to the
    Industrial Tribunal constituted under the provisions of the Industrial Dis-
    putes Act. It was held that where a party was prevented from appearing at
    a hearing due to sufficient cause and was faced with an ex-parte award, it
    was as if the party was visited with an award without notice of the
B   proceedings. Where an Industrial Tribunal proceeded to make an award
    without notice to a party, the award was nothing but a nullity. In such
    circumstances, the Industrial Tribunal had not only the power but also the
    duty in set aside the ex-pa1te award and to direct the matter to be heard
    afresh. The rule in question (Rule 22 of the Industrial Disputes (Central)
c   Rules, 1957) provided that without sufficient cause being shown, if any part
    to proceedings before the Industrial Tribunal failed to attend or be repre-
    sented, the Industrial Tribunal could proceed as if the party had duly
    attended or had been represented. If, therefore, there was not sufficient
    cause for the absence of a party, the Industrial Tribunal had the jurisdiction
D   to proceed ex-parte. But if sufficient cause was shown which prevented a
    party from appearing, the Industrial Tribunal had the power to set aside
    the ex-parte award. The power to proceed ex-parte carried with it the
    power to enquire whether or not there was sufficient cause for the absence
    of a part at the hearing.

E         Rule 20 of the CEGAT (Procedure) Rules deals with cases where
    the appellant has defaulted. Rule 21 empowers CEGAT to hear appeals
    ex-parte. The fact that Rule 21 does not expressly state that an order on
    an appeal heard and disposed of ex-parte can be set side on sufficient
    cause for the absence of the respondent being shown does not mean that
F   CEGAT has no power to do so. Rule 41 gives CEGAT wide powers to
    make such orders or give such directions as might be necessary or ex-
    pedient to give effect or in relation to its orders or to prevent abuse of its
    process or, most importantly, to secure the ends of justice.

          If, in a given case, it is established that the respondent was unable to
G appear before it for no fault of his own, the ends of justice would clearly
    require that the ex-parte order against him should be set aside. Not to do
    so on the ground of lack of power would be manifest injustice. Quite apart       L
    from the inherent power that every tribunal and court constituted to do
    justice has in this respect, CEGAT is clothed with express power under
H   Rule 41 to make such order as is necessary to secure the ends of justice.
       J.K. SYNIBETICS LTD. v. COLLECTOR OF CENTI~ EXCISE                 299

CEGAT has; therefore, the power to set aside an order passed ex-parte            A
against the respondent before it if it is found that the respondent had, for
sufficient cause, been unable to appear.

      It is for CEGAT to consider in every such case whether the respon-
dent who applies for recall of the ex-parte order against him had sufficient
cause for remaining absent when it was passed and, if it is established to       B
the satisfaction of CEGAT that there was sufficient cause, CEGAT must
set aside the ex-pwte order, restore the appeal to its file and hear it afresh
on merits.

      On the facts of the present case, we think it proper to allow the          C
appellants' application to CEGAT for setting aside the ex-parte order
against it ourselves.

      The appeal is allowed. The order under appeal is set aside. The
application of the appellant for recalling the order dated 31st August, 1987, ·
passed by CEGAT ex-parte against it is allowed. The appeal (No. 590/84C) D
before CEGAT is restored to its file and shall be heard and disposed of
on merits.

       There shall be no order as to costs.

G.N.                                                        Appeal allowed.