Custom, Excise & Service Tax Tribunal
M/S Guljag Industries Ltd vs Cce, Jaipur on 24 April, 2009
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R. K. Puram, New Delhi COURT-I Date of hearing/decision: 24.04.2009 Service Tax Appeal No. 532 of 2006 M/s Guljag Industries Ltd., Appellant Vs. CCE, Jaipur Respondent
AND Service Tax Appeal No. 32 of 2007 M/s Agauta Sugar & Chemicals Appellant Vs. CCE, Noida Respondent AND Service Tax Appeal No. 88 of 2007 M/s Jaipur Glass & Potteries Appellant Vs. CCE, Jaipur Respondent Appearance:
Appeared for the Appellant Shri B.L. Narsimhan, Advocate Shri O.P. Aggarwal, CA & Shri Hemant Bajaj, Advocate Appeared for the Respondent Shri R. K. Verma, DR Coram: Honble Shri Justice R.M.S. Khandeparkar, President Oral Order No._______ Per: Shri Justice R.M.S. Khandeparkar:
Heard learned Advocate for the appellant and learned DR for the Department.
2. When these appeals came up for hearing before the learned single Member on 30.08.2007, it was noticed by the learned single Member that there was difference in the opinions expressed in different decisions of the Tribunal on the issue as to whether service tax in relation to the goods transport service received by party during the particular period can be recovered by issuance of show cause notice beyond three years thereafter and in that connection the learned single Member noted the decisions in the matter of BPL Engineering Ltd. vs. CST -2006 (3) STR 747 (Tri. Bang.), R. K. Marble Pvt. Ltd., -2007 TIOL-29, CCE, Jaipur vs. Mangalam Cement Ltd., - 2007 (7) STR 673 (Tri. Del.). He also the decisions of the Apex Court in the matter of CCE, Meerut-II vs. L.H. Sugar Factories Limited vs. CCE, Meerut- 2005 (187) ELT 5 (SC), Gujarat Ambuja Cements Ltd., vs. Union of India -2005 (182) ELT 33, S.S. Gadgil vs. Lal & Co. (1964) 53 ITR 231 (SC), K.M. Sharma vs. ITO (2002) 254 ITR 772 (SC) and decision of Kerala High Court in Varkey Jacob and Co. vs. CIT [2005] 275 ITR 146 (Ker. HC). Consequently, the learned single Member thought it appropriate to refer the matters to a larger bench. Accordingly, pursuant to the order passed by the President of the Tribunal, the matters were placed before the Division Bench.
3. The matters came up for hearing before the Division Bench on 30.01.2009 wherein the Division Bench referring to the decisions in the matter of BPL Engineering Ltd. and Mangalam Cement cases observed that there are conflicting views expressed by two benches on the relevant issue and therefore the parties agree that the matter should be referred to a three Member Bench. The Division Bench passed the following order:-
After hearing both the parties, we find that there is conflicting decisions of the different Division Benches and therefore, we direct the registry to place this matter before the Honble President for constituting Three Members Bench to decide the issue.
4. Considering the order of the Division Bench of the Tribunal, matter was fixed for hearing and upon hearing the learned Advocate for the appellant and learned DR, it is found necessary to pass the following order.
5. The matters in question arise under the provisions of Finance Act, 1994 relating to the service tax. Section 86 of the said Act deals with the appeals to the Appellate Tribunal and sub-para of Section 86(7) read thus Subject to the provisions of this Chapter, in hearing the appeals and making orders under this section, the Appellate Tribunal shall exercise the same powers and follow the same procedure as it exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944. Section 35B of the Central Excise Act, 1944 deals with the powers of Appellate Tribunal. Sub-section (1) thereof that the provision of (1), (2), (5) and (6) of Section 129C of the Customs Act, 1962 shall apply in the discharge of its function under the said Act as they apply in discharge of this function under the Customs Act, 1962.
6. Section 129C of the Customs Act, 1962 deals with the procedure and powers of the Appellate Tribunal. Sub-section (5) thereof provides that if the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority; but if the members are equally divided, they shall state the point or points on which they differ and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of these members of the Appellate Tribunal who have heard the case, including those who first heard it.
7. Sub-section (6) of Section 129C of the Customs Act provides that Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.
8. As the law stand, there is no specific provision to meet the eventuality of the Division Bench of the Tribunal having to decide the matter wherein there are already the two different judgements taking different views on the same issue which is required to be dealt with by the Division Bench. Even as regards the rules which have been framed as Customs, Excise & Service Tax Appellate Tribunal Procedures Rules, 1982, nowhere provides a solution to such an eventuality.
9. The learned Advocate for the appellant, however, has drawn my attention to the decision of the Apex Court in the case of Union of India vs. Paras Laminates (P) Ltd., reported in 1990 (49) ELT 322 (S.C.). The said matter arose on account of the order passed by Division Bench of the Tribunal referring the matter to the Larger Bench in spite of their being a decision of three Member Bench on the issue which was required to be decided. The Apex Court in that regard observed thus:-
This appeal by the Union of India arises from the Judgement dated 7.12.1989 of the Delhi High Court in Civil Writ No. 1060 of 1987 setting aside Orders dated 22.10.1986 and 4.3.1987. The former order was made by a Bench of two members of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter called the Tribunal) and the latter order was made by the President of the Tribunal. By their Order dated 22.10.1986, the Bench of two members of the Tribunal stated that they doubted the correctness of an earlier decision of a Bench of three members of the Tribunal in Bakelite Hylam Ltd. vs Collector of Customs, Bombay & Anr.- 1986 (25) ELT 240 and directed that the case of the present respondent, Paras Laminates (P) Ltd., be placed before the President of the Tribunal for referring it to a larger Bench of the Tribunal. The President by his Order dated 4.3.1987 referred the case to a larger Bench of five members. These two orders were struck down by the High Court stating that the Bench of two members ought to have followed the earlier decision of the larger Bench of 3 Judges and a reference of the case to a still larger Bench was contrary to judicial precedent and judicial discipline.
10. The Apex Court held that Tribunal functions as a court within the limits of its jurisdiction. It has all the powers conferred expressly by the statute. Furthermore, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recognized as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised. The powers of the Tribunal are no doubt limited. Its area of jurisdiction is clearly defined, but within the bounds of its jurisdiction, it has all the powers expressly and impliedly granted. The implied grant is, of course, limited by the express grant and, therefore, it can only be such powers as are truly incidental and ancillary for doing all such acts or employing all such means as are reasonably necessary to make the grant effective. In that connection, the Apex Court quoted the settled rule of the Interpretation of Statutes, to the effect that where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.
11. Dealing with the issue relating to the power to refer the matter to a Larger Bench in terms of Section 129C of the Customs Act, the Apex Court held thus:-
10. That the President has ample power to refer a case to a larger Bench is not in doubt in view of sub-section (5) of Section 129C, which we have set out above. That provision clearly says that in the event of the members of a Bench, differing in opinion on any point, and the members are equally divided, the case shall be referred to the President for hearing on any such point by one or more of the members of the Tribunal, and such point shall be decided according to the opinion of the majority of the members.
11. It is true that sub-section (5) refers to difference of opinion arising amongst members of a Bench doubt the correctness of an earlier decision. However, Section 129-C confers power of reference upon the President. That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree. In such cases, it is necessary for the healthy functioning of the Tribunal that the President should have the requisite authority to refer the case to a larger Bench. That is a power which is implied in the express grant authorizing the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions.
12. Taking clue from the decision of the Apex Court and bearing in mind the provisions of law referred to above, it is to be noted that whenever there is a difference of opinion amongst the Members of a Bench on an issue, the Bench has to formulate such issue and asking registry to place the matter before the President of the Tribunal to do the needful in terms of Section 129C(5) of the Customs Act, 1962. It is obvious that it is the prerogative of the President either to refer the matter to third Member or constitute a larger Bench in case of such difference of opinion or hear the matter himself and thereafter the majority of the opinion to form the decision. Reference of a matter to the larger Bench or a third Member is entirely in the discretion of the President of the Tribunal albeit the discretion has to be exercised judiciously. There is no power vested with the Division Bench or the single Member Bench to refer the matter directly to a larger Bench. Neither any statutory provision gives such power to Division Bench or single Member Bench to do so nor there is any judicial pronouncement vesting such power upon the Division Bench or the single Member Bench. This is essentially to maintain proper judicial discipline in the administration of justice by the Tribunal.
13. Even in cases where the Division Bench is faced with a situation of having already delivered two different orders on the same issue taking by two different views by two different Benches, the Bench facing such a situation has to formulate the issue which is required to be referred to the larger Bench and thereupon ask the Registry to place the matter before the President to do the needful.
14. Considering the various decisions referred to herewith above and upon hearing the learned Advocate and learned DR, and bearing in mind the order passed by division Bench, it is necessary that the case referred to the larger Bench. In order to constitute larger Bench, the order in this regard will have to be passed by the administrative side by the President. The Registry is, therefore, directed to place the matter before the President on administration side. The Registry is also directed to circulate the copy of this order to all the Honble Members of the Tribunal.
(Justice R.M.S. Khandeparkar) President /Pant/