CESTAT must ensure delivery of Orders: HC

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NEW DELHI. Vide a ruling dated 29^th November 2006 AIT-2006-273-HC ; Delhi High Court has ruled that CESTAT must ensure delivery and receipt of its Orders. HC set aside the impugned order dated 15.7.2003 passed by the CESTAT.  

T H E   F A C T S:

By the impugned order dated 15.7.2003 the CESTAT rejected an application filed by the appellant seeking restoration of its appeal No.E/374/90 which had been dismissed for default on 22.7.1997 on account of non-appearance of the appellant.

In its application for restoration of the said appeal filed nearly six years later in May, 2003, the appellant contended that the notice of hearing of the appeal was not received by it. The unit was lying closed since 1991. The place where the advocate for the appellant was residing, as shown in the records of the CESTAT, was lying vacant for the past six to seven years. It was accordingly contended that the appellant did not know of the dismissal of its appeal by order dated 22.7.1997 till the receipt of a letter dated 2.4.2003 from the office of the Superintendent of Central Excise, Range 33, Nehru Place,addressed to the sole proprietor of the appellant and delivered at his
residential address, seeking to recover a sum of Rs.4,10,089/- under the provision of Section 142(1)(c)(2) of the Customs Act, 1962 (as applicable to central excise matters).

By the impugned order dated 15.7.2003 the Tribunal held as follows :-

”From a perusal of the records, we find that the order was dispatched on 30.7.1997 by registered post. There is no record of the order being returned undelivered to the addressee. The delay in filing this petition is too long. In the circumstances, we are not inclined to allow this application. It is dismissed.”


The appellant submitted that the order dated 22.7.1997 of the CESTAT was never received by them.

T H E  R U L I N G:

The contention of the respondent is that Section 37 C would come into play only where order was passed by the authorities under the Act and not where the orders are passed by the CESTAT. The procedure of the CESTAT is governed by Section 35D read with Rule 35 of the CEGAT (Procedure) Rules, 1982 which reads as under :
”Rule 35 Communication of orders to parties :
Any other passed in an appeal or on an application shall be communicated to the appellant or the applicant and to the respondent either in person or by registered post.”

In other words, it is submitted that Rule 35 only requires a copy of the order of the CESTAT to be sent by registered post and is not a mandatory requirement that such order should also be served on the addressee as required by Section 37 C.

These contentions, in our view, give rise to a substantial question of law, viz., whether the expression `decisions' and words `service of decisions' in Section 37C applies to decisions handed down by the CESTAT in appeal?

The wording of Section 37 C does not exclude the orders passed by the CESTAT in appeal. The word “service of decisions” occurring in the title of the Section and the word “decisions” occurring throughout under Section 35C is, in our view, intended to govern the decisions handed down by the CESTAT as well. It is true that Rule 35 D deals with the procedure to be followed by CESTAT, and the Rules of procedure have also been framed separately. However, Rule 35 of those rules are only supplementary to the statutory provisions. The Rules cannot supplant the statutory requirement under Section 37C which requires that the decisions passed under the Act, which in our view includes those passed by the CESTAT, ”shall be served” on the parties in the manner indicated in that provision. Under Section 37C (2) of the Act, which is similar to Section 27 of the General Clauses Act, 1897 service of the decision is `deemed' on the date that such decision is “tendered or delivered by post”. This implies that the initial burden of proof of tender or delivery of such decision by post as required under
sub-section (2) of Section 37C read with Section 27 of the General Clauses Act,1897 is on the authority despatching such notice. The sender will have to show that such notice was in fact sent by “Registered Post” to the addressee. It is only then that deeming fiction spelt out in sub-section (2) of Section 37 C read with Section 27 of the General Clauses Act, 1897 would stand attracted. The burden thereafter would be on the addressee to show that such notice was not in fact served.

We, therefore, hold that the provisions of Section 37C of the Act requiring the service of the decisions passed under the Act, would also apply to the decisions handed down by the CESTAT. This interpretation harmonises Rule 35 of the CEGAT (Procedure) Rules, 1982 with Section 37C. While Section 37C deals with the aspect of service of the decision/order, Rule 35 deals with its despatch. Both Section 37C and Rule 35 will, therefore, have to be complied with.

Apart from filing photocopies of the covering letter enclosing the order dated 22.7.1997 of the CESTAT bearing a date stamp of 5.8.1997, there is no postal receipt produced on the record to show that such a letter was in fact sent by the registered post to the addressee, or that any acknowledgment due card was received from the addressee bearing the addressee's signature. Since there is no proof of even the tender or delivery of the letter enclosing a copy of the order to the addressee by post, the deeming fiction in sub-section (2) of Section 37 C read with Section 27 of the General Clauses Act, 1897 is not attracted in the present case. In other words, the respondents have not discharged the initial burden of showing that the order dated 22.7.1997 was in fact sent by the registered post to the appellant as contended by them. In our view, the Tribunal erred in examining whether there was any record “of the order being returned undelivered to the addressee”. The Tribunal ought to have first examined whether in fact the order was tendered or delivered by post to the addressee as required by the law.
( Click here for full text of ruling AIT-2006-273-HC )