Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs L.G. Balakrishnan And Bros. Ltd. on 15 November, 2006
Equivalent citations: 2007[6]S.T.R.106
ORDER P.G. Chacko, Member (J)
1. The application and the appeal are by the Commissioner of Central Excise, Coimbatore. The impugned order passed by the Commissioner of Central Excise (Appeals), Coimbatore was received by the appellants on 9.11.2005 and the appeal was filed on 10.4.2006 with a delay of 60 days. The TIME CHART attached to the application for condonation of this delay provides the following chronology of events:
Receipt of impugned order 9.11.2005 Date of review by the Commissioner, Salem, one of the members of the Committee of Commissioners who had not accepted the impugned OIA and recommended for preferring appeal.
30.1.2006 The date of review by Commissioner (Trichy), The second member of Committee of Commissioners who disagreed with the views of the other member.
1.2.2006 Date of receipt of Board's circular regarding the action to be taken when the decision of the Committee of Commissioners is not unanimous 13.3.2006 Date on which the Commissioner (Coimbatore) who took regular charge in place of the Commissioner (Trichy) amended the grounds of appeal in view of the above Board's circular 6.4.2006 The date of approval of the amended grounds of appeal Commissioner (Salem) by the other member of the Committee 6.4.2006 Date of filing appeal 10.4.2006
2. It appears from the Time Chart that on 30.1.2006 the Commissioner (Salem), one of the members of the Review Committee constituted under Section 35B(1B) of the Central Excise Act, reviewed the order of the Commissioner (Appeals) on his own grounds and recommended filing of appeal against the order on such grounds, but the other member viz. the Commissioner (Coimbatore) on 1.2.2006 decided to accept the said order for his own reasons. Thus there was no decision by the Review Committee for filing appeal against the appellate Commissioner's order. The Board's circular dated 6.2.2006 giving overriding effect to pro-appeal decision in the event of difference of opinion between the members of Review Committee was received by the appellant on 13.3.2006, whereupon he, viz. the Commissioner (Coimbatore), decided to file appeal against the appellate Commissioner's order. The COD application says that this decision was taken on 30.3.2006, but it appears from the Time Chart that the decision was taken on 6.4.2006 and was approved by the Commissioner (Salem) on the same day. We shall go by what is stated in the application. The appeal was filed on 10.4.2006.
3. The application says that the appellant was unable to file the appeal within the prescribed period of limitation due to initial conflicting opinion among the Review Committee members and lack of clarification regarding the further course of action in case of conflict of views within the Committee and also due to lengthy and cumbersome procedural formalities under Section 35B(2) involving Commissioners at Salem and Coimbatore. In support of this explanation of delay, learned SDR referred to Board's circular No. 825/2/2006-CX. dated 6.2.2006 and submitted that, in terms of this circular, the decision dated 30.1.2006 of the Commissioner of Central Excise, Salem (one of the two members of the Review Committee) to file appeal against the appellate Commissioner's order was to be taken as the order of review. But the Board's decision was not known to the appellant till 13.3.2006. It also necessitated amendment of the grounds of appeal to be filed with the Tribunal. This procedure was completed on 6.4.2006 and the appeal was filed on 10.4.2006. In these circumstances, ld. SDR claimed that there was sufficient cause for condonation of the delay of the appeal. When queried by the Bench as to the statutory source of power for the Board to issue a circular of the above kind, ld.SDR cited Rule 31 of the Central Excise Rules, 2002 reading thus : The Board or the Chief Commissioner or the Commissioner, may issue written instructions providing for any incidental or supplemental matters, consistent with the provisions of the Act and these rules.
4. Ld. Consultant for the respondents argued that, where one of the members of the Review Committee accepted the order of the Commissioner (Appeals) and the other member rejected it, there was no decision by the Review Committee to file appeal against the order. Any appeal could have been filed only if the Review Committee unanimously decided to do so. The Commissioner (Trichy) qua Commissioner (Coimbatore) and member of the Review Committee had accepted the appellate Commissioner's order on 1.2.2006 but, subsequently, in view of the Board's circular, the Commissioner (Coimbatore) decided to file appeal against the said order. According to ld. consultant, this procedure had no legal sanction. In this connection, he submitted that Rule 31 did not enable the Board to issue the above circular. Relying on the Tribunal's decision in Commissioner of Customs, Bangalore v. RPG Telecom Ltd. 2000 (122) ELT 779 (Tri), he submitted that the subsequent review by Commissioner (Coimbatore) was no reason for condoning the delay of the appeal.
5. We have considered the submissions carefully. The impugned order was received by the appellant on 9.11.2005. The authority for reviewing that order was a Committee of the Commissioner of Central Excise, Coimbatore and the Commissioner of Central Excise, Salem, constituted by the Board under Sub-section (1B) of Section 35B of the Central Excise Act vide Notification No. 25/200.5-CE (NT) dt. 13.5.05 as amended by Notification No. 30/2005-CE (NT) dated 8.6.2005. On 30.1.2006, the Commissioner (Salem) decided to file appeal against the above order. On 1.2.2006, the Commissioner (Trichy) officiating as Commissioner of Central Excise (Coimbatore) decided to accept the above order. Each Commissioner, apparently, had his own reasons. But, obviously, there was no meeting of the Review Committee. One member of the Committee took his own decision at Salem and the other member took the opposite decision at Tiruchirapalli. Apparently, there were no deliberations and hence there was no occasion for a meeting of minds as contemplated under Sub-section (2) of Section 35B, which provision reads as under:
The Committee of Commissioners of Central Excise may, if it is of opinion that an order passed by the Appellate Commissioner of Central Excise under Section 35, as it stood immediately before the appointed day, or the Commissioner (Appeals) under Section 35A, is not legal or proper, direct any Central Excise Officer authorised by him in this behalf (hereafter in this Chapter referred to as the authorised officer) to appeal on its behalf to the Appellate Tribunal against such order.
It is clear from the above provision that, either for accepting an appellate Commissioner's order or for deciding to file appeal against it, the Review Committee must form a unanimous opinion. The law-makers expected the members of the Review Committee to sit together, examine the case records, deliberate, discuss and converge to a view on the question whether the appellate Commissioner's order was legal or proper and, in the event of this question being answered in the negative, to authorize any Central Excise officer to prefer appeal to the Appellate Tribunal against the said order. The above conduct of the Commissioner (Salem) and the Commissioner (Trichy) officiating as Commissioner (Coimbatore) defeated the legislative purpose. The decision taken by the Commissioner (Salem) on 30.1.2006 to file appeal against the appellate Commissioner's order or the opposite decision taken on 1.2.2006 by the other member of the Committee cannot be accepted as decision of the Review Committee in terms of Section 35B(2). The appellant has no case that there was any meeting of the Review Committee after 1.2.2006. The COD application states that a decision to file appeal against the appellate Commissioner's order was taken on 30.3.2006 by the Commissioner (Coimbatore) and that such decision was in consonance with the decision taken by the Commissioner (Salem) on 30.1.2006. The obvious attempt is to construct a "review" out of the two Commissioners' decisions taken on 30.1.2006 and 30.3.2006 but the same is bound to be futile for the reasons we have already recorded. For such reasons, the decision taken on 30.3.2006 by the Commissioner (Coimbatore) to file appeal cannot be treated as decision of the Review Committee under Section 35B(2). The Time Chart says that, on 6.4.2006, the Commissioner (Coimbatore), in view of the Board's circular, amended the grounds of appeal and the Commissioner (Salem) approved the same. But pleadings to this effect are absent in the COD application. Moreover, the Board's circular did not contain anything to bear on the merits of the appeal. Facts not alleged in the application cannot be taken into account.
6. In the result, there is no decision by the Review Committee in terms of Sub-section (2) of Section 35B, to file appeal against the appellate Commissioner's order.
7. The question arises, at this juncture, as to whether the Board's circular dated 6.2.2006 will alter the above position. The circular reads as under:
Government of India Ministry of Finance (Department & Revenue) Central Board of Excise & Customs, New Delhi Subject: Functioning of the Committee of Chief Commissioners for Review of Orders passed by Executive Commissioners and Appellate Commissioners.
I am directed to invite your attention to the provision of Sub-section (2) of Section 35B of the Central Excise Act, 1944 or Section 129A of the Customs Act, 1962, which inter alia provides that the Committee of Commissioners of Central Excise or the Committee of Commissioner of Customs, as the case may be, may, if it is of the opinion that an order passed by the Appellate Commissioner of Central Excise under Section 35 or the order passed by the Appellate Commissioner of Customs under Section 128, as the case may be, as it stood immediately before the appointed day, or the commissioner (Appeals) under Section 35A or under Section 128A, is not legal or proper, direct any Central Excise Officer or the proper officer authorized by him in this behalf (hereafter in this Chapter referred to as the authorized officer) to appeal on its behalf to the Appellate Tribunal against such order. Similarly, Sub-section (1) of Section 35E of Central Excise Act, 1944 or Section 129D of Customs Act, 1962, provide that the Committee of Chief Commissioner of Central Excise or the Committee of Chief Commissioner of Customs, as the case may be, may of its own motion, call for and examine the record of any proceedings in which a Commissioner of Central Excise or a Commissioner of Customs, as the case may be, as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Committee of Chief Commissioners of Central Excise or Committee of Chief Commissioner of Customs, as the case may be , in its order.
2. The Board has received a number of references from the field formations concerning the procedure to be followed while implementing the provisions of Sub-section 1(B) of Section 35B and 35E of Central Excise Act, 1944 and Sub-section 1(B) of Section 129A and 129D of the Customs Act, 1962, in case of difference of opinion between the members of the Committee.
3. The suggestions of the Chief Commissioners on the matter have been examined and considering the above legal position, Board has decided that when two members take a common view to file an appeal or not to file an appeal, in a particular case there would be no difference of opinion and the same would be followed. However, in a rare case when the two members could take different views i.e., one member takes a view to file an appeal, and the other member opposes it, the decision should be to file an appeal.
Parliament did not contemplate any difference of opinion amongst the Commissioners in the Review Committee and hence did not make provision for resolving such differences, nor did the law-makers authorize the Board to make any such provision. Under Rule 31 of the Central Excise Rules, 2002, cited by ld. SDR, the Board has power to issue written instructions providing for any incidental or supplemental matters, consistent with the provisions of the Act and the Rules. The Rule only authorizes the Board to issue instructions providing for matters which are incidental or supplemental to matters covered by other provisions of the Central Excise Rules, 2002, and none of these Rules governs the procedure of review of orders of adjudicating authorities or appellate Commissioners. Therefore, nothing contained in Rule 31 can be construed as a provision for supplementing the procedure of review. In fact, the procedure of review is inbuilt in Section 35B(2) itself and the Committee of Commissioners constituted under Sub-section (1B) is bound to follow it.
8. The Board's decision, handed down to Commissioners of Central Excise & Customs through the above circular virtually overrides one member of the Review Committee where there is difference of opinion between the two members of the committee. It seeks to give effect to the decision of the other member to file appeal against the appellate Commissioner's order under review. This situation is somewhat analoguous to the presiding officer of a legislative assembly casting his own vote when the pro-Government and Opposition votes are equal in number. But the Board has no 'casting vote' in relation to proceedings of a Review Committee under Section 35B(2) of the Central Excise Act/Section 129A(2) of the Customs Act inasmuch as it is not a part of the said Committee and has no power to review orders of appellate Commissioners. By giving overriding effect to one opinion (viz. the opinion in favour of filing appeal) over the opposite opinion in the Review Committee, the Board's circular tends to influence the very process of review to the detriment of justice by encouraging pro-Revenue opinion formation in the Review Committee.
Where one member of the Committee forms an opinion in favour of filing appeal against the appellate Commissioner's order, the other member is unlikely to take a different view, which, he knows, will be otiose on account of the Board's instructions. In such a situation, an eminently well-founded order of an appellate Commissioner can possibly be dragged into litigation by the Department unnecessarily. This cannot be the legislative intent behind Section 35B(2)/129A(2) which requires the Committee of Commissioners to examine the records of the case and take a dispassionate view as to whether the appellate Commissioner's order is legal and proper. The Board's circular was issued without legal sanction and militates against Section 35B(2)/129A(2) and cannot be given effect to. It also does not alter the fact that there is no decision of the Review Committee in this case to file appeal against the order of the Commissioner (Appeals), Coimbatore.
9. Even if it be assumed that the Board's circular dated 6.2.2006 is valid, it cannot be of any support to the appellant's case made out in the present application inasmuch as the circular has no retrospective effect so as to give effect to the decision of the Commissioner (Salem) dated 30.1.2006 for filing appeal against the appellate Commissioner's order.
As regards the decision dt. 30.3.2006 of the Commissioner (Coimbatore) to file appeal against the appellate Commissioner's order, again, it cannot be implemented in terms of the circular inasmuch as there is no decision by the other member of the Committee after 6.2.2006. Assuming, again, that there is valid review of the appellate Commissioner's order after 6.2.2006 for filing appeal, we find that there is no satisfactory explanation of the delay of the appeal beyond 13.3.2006, the date on which the appellant received the Board's circular. The time chart shows that, after the Board's circular was received on 13.3.2006, the appellant took more than two weeks to take a decision to file appeal against the appellate Commissioner's order and thereafter nearly one week's time was taken for amending the grounds of the appeal. There is no explanation for these delays.
10. In the result, the appeal along with the COD application is dismissed for want of valid review of the impugned order.
(Operative part of the order was pronounced in open court on 15.11.2006)