cat.js

var fs = require("fs");

function read(path, callback) {
    fs.readFile(path, 'utf8', callback);
}

function cat(path) {
    read(path, function (err, data) {
        if (err)
            throw err;
        console.log(data);
    });
}

try {
    cat(process.argv[2]);
} catch (e) {
    console.err("some error was thrown: " + e.message);
}

% node cat.js /do-not-exist

/usr/home/alex/cat.js:10
            throw err;
                  ^
Error: ENOENT, open '/do-not-exist'

Asyncness problem, when you change the code to the code below you get your expected result.
Note: the fs.readFile_Sync_

I would suggest passing down the err to the caller (don't use a try-catch here)

var fs = require("fs");

function read(path, callback) {
    fs.readFileSync(path, 'utf8', callback);
}

function cat(path) {
    read(path, function (err, data) {
        if (err)
            throw err;
        console.log(data);
    });
}

try {
    cat(process.argv[2]);
} catch (e) {
    console.log("some error was thrown: " + e.message);
}