Customs, Excise and Gold Tribunal - Mumbai
Supercoats Industries vs Commissioner Of Central Excise on 20 September, 2004
Equivalent citations: 2005(183)ELT255(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. This larger bench is constituted by Head of the Department of CESTAT to consider the issue referred by a bench of CESTAT consisting of two Members.
2. The issue referred is whether the Tribunal has jurisdiction to hear appeals arising out of a case of loss of goods in storage in a factory, in view of the wording of the first proviso to Sub-section (1) of Section 35 of the Central Excise Act.
3. The bench which referred the issue noted that in the case of Shiva Essential Oils & Chemicals v. CCE, Noida (2004 [61] RLT 282), the Tribunal held that loss or destruction due to unavoidable accident is specifically covered by Rule 49 of the erstwhile Central Excise Rules whereas Section 35B of the Act only covers simple loss due to any reason. The Tribunal in that case held that Section 35B does not debar the Tribunal from deciding issues arising out of such loss.
4. Section 35B inter alia reads as follows:-
"Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in Clause (b) if such order relates to, -
(a) a case of loss of goods, where the loss occurs in transit from a factory to a warehouse or to another factory, or from one warehouse to another, or during the course of processing of the goods in a warehouse or in storage, whether in a factory or in a warehouse;
(b) xxxx
(e) xxxx
(d) xxxx"
(Clause [b] referred to above reads thus "an order passed by the Commissioner (Appeals) under Section 35A.")
5. A plain reading of this Section (35B) indicates that all losses including the kind of loss mentioned in Rule 49 are covered under this Section. If the impugned order is passed by a Commissioner (Appeals) in respect of any loss that an assessee has claimed to have occurred, the Tribunal has no jurisdiction to hear an appeal arising out of it.
6. When a similar matter came up before the High Court of Judicature at Madras in a writ petition (India Pistons Ltd. v. ACCE 1987 [27] ELT 651 [Mad]), the Hon'ble High Court did not find fault with the Tribunal's decision that it lacked jurisdiction to deal with appeals arising out of an order passed by Commissioner (Appeals) pertaining to loss of goods. We are aware that the Hon'ble High Court has not given any ruling on whether or not such a view of the Tribunal is correct or not. But did not find fault with it either. In the case of Lakshmiji Sugar Mills Co. Ltd. v. CCE (1991 [56] ELT 629), the Tribunal held that it had no jurisdiction to hear appeals of this nature. The Tribunal relied upon the decision of the Madras High Court cited supra. The position would be however different if the appeal arises out of an order passed by Commissioner of Central Excise (Appeals). Against such order, appeal does lie with the Appellate Tribunal.
7. We observe that the Tribunal in the case of Shiva Essential Oils & Chemicals v.CCE, Noida cited supra, has not considered the decision in Lakshmiji Sugar Mills Co. Ltd.'s case nor was it cited before them. Loss, whether it occurs due to unavoidable accident or otherwise, is a loss. So long as such loss occurs in storage, it is a loss referred to in Section 35B proviso. The artificial distinction between one type of loss and another sought to be made in Shiva Essential Oils & Chemicals's, case does not appeal to be correct in view of the unambiguous language of Section 35B. We are of the opinion that the Tribunal has no jurisdiction to hear appeals arising out of the orders of Commissioner (Appeals) where the appeals relate to loss of goods either in transit or in storage as stated in proviso (a) to Section 35B of the Central Excise Act.
8. We now remit the issue back to the referring bench for passing appropriate orders in the matter before them.
(Operative part pronounced in court)