Customs, Excise and Gold Tribunal - Delhi
D.C. Dhanpat Rai Bhatia Steel Rolling ... vs Collr. Of C. Ex. on 14 February, 1986
Equivalent citations: 1987(13)ECR142(TRI.-DELHI), 1994(70)ELT435(TRI-DEL)
ORDER H.R. Syiem, Member (T)
1.These matters, we are hearing now, were presented by Mr. Y.N. Chopra, 77, Navjiwan Vihar, New Delhi on behalf of M/s. Ch. Dewan Chand Dhanpat Rai Bhatia Steel Rolling Mills, Mandi Gobindgarh, by whom, he says, he has been engaged. They bear F. No. 81-CE/80, dated 26-5-1980 and were presented as a review application under Section 36(2) of the Central Excises and Salt Act, 1944 against order-in-appeal No. 824-825-CE/79, dated 9-8-1979 passed by the Appellate Collector of Central Excise, New Delhi. It is not clear why this petition was filed as a review application under Section 36(2) of the Central Excises and Salt Act when it could as well have been filed as a revision petition under Section 36(1). However, not to put too fine a point upon it, we will deal with it as an appeal filed to this Tribunal, which is how Section 35P of the Central Excises and Salt Act requires such things to be done. This application/petition/appeal is directed against the order-in-appeal we have recorded above, because the Appellate Collector sent the case back to the Assistant Collector for de novo trial.
2. This case started when two refund claims, one for Rs. 76,459.74 and Anr. for Rs. 21,941.01 were presented to the Assistant Collector of Central Excise, Ludhiana by the factory M/s. Ch. Dewan Chand Dhanpat Rai Bhatia Steel Rolling Mills. They were rejected by the Assistant Collector in two orders, one dated 18-6-1974 and Anr. dated 26-6-1974. When the manufacturers appealed these decisions, the Appellate Collector of Central Excise, New Delhi, by order No. 1264-CE/75, dated 2-12-1975 set aside the Assistant Collector's orders and ordered consequential relief to the appellant. The Assistant Collector in order dated 25-5-1977 paid a sum of Rs. 18,971.52 out of Rs. 76,459.74 claimed, and by another order dated 17-6-1977 paid a sum of Rs. 5,614.26 out of the claim of Rs. 21,941.01, because he held that the claims on the rejected parts were excise duty paid on flats to which the provisions of Notification No. 206/63 were not applicable. The Appellate Collector then passed the order dated 9-8-1979 which was the source of this problem.
3. The counsel's (for M/s. Ch. Dewan Chand) main point of argument was that the order of the Appellate Collector was illegal, because by passing such an order he approved the action of the Assistant Collector which was itself arbitrary and not supported by law. The Assistant Collector, when he passed the two orders of 25-5-1977 and 17-6-1977, acted contrary to the directives of the Appellate Collector's order No. 264-CE/75, dated 2-12-1975. In that order the Appellate Collector directed consequential relief. He did not qualify his directives nor did he permit the Assistant Collector to go into the merits or into how much of the claims he should accept and how much he should reject. All that the authority had to do was to faithfully comply with the Appellate Collector's order which was to refund the entire sum of money they had claimed in their two claims. It was not permissible for the Assistant Collector to question the appeal order and in doing so to start a new case by finding new grounds for rejecting claims that a higher authority than himself had, in a judicial pronouncement, found acceptable and had ordered payment. The Appellate Collector, for his part, forgot that the Assistant Collector had acted contrary to legitimate directives and thus in effect he modified the order of his predecessor Appellate Collector. The de novo trial is bad as well as illegal and of no effect. The learned counsel urged that the Tribunal should order the payment of the refund claim in full.
4. The matter is not what the learned counsel for the appellant thinks it to be. The order of the Appellate Collector dated 2-12-1975 directed that consequential relief be given and not that the entire claims for refund should be paid. It should be borne in mind that the dispute was whether the products cleared by M/s. Ch. Dewan Chand were flats or bars; the central excise department held them to be flats and collected duty accordingly, whereas the factory management says that they were bars and should receive concessional assessment under Notification No. 206/63. The Assistant Collector who passed the orders dated 25-5-1977 and 17-6-1977 did carry out the orders of the Appellate Collector, because when he rejected the remaining amounts, he did so on the grounds that the goods were flats to which the provisions of Notification No. 206/63-C.E. did not apply. It is not correct, therefore, to say that these orders were in defiance of the Appellate Collector's order dated 2-12-1975. Consequential relief does not mean bestowal of all that is asked; it requires that relief should be given but only in accordance with the directions, guidelines and standards provided by the ordering authority.
5. These were to be found in the order of the Appellate Collector dated 29-11-1975. He ruled that semis manufactured out of small ingots which resembled the shape of items mentioned in sub-item (1) of Central Excise Item No. 26AA of Central Excise Tariff were eligible to exemption. On this, he ordered consequential relief. We can see from this that the Appellate Collector did not simply order refund of whatever was claimed by the assessee; he laid down a method by which the Assistant Collector would arrive at conclusions about what goods were eligible to exemption. All this care would be unnecessary if he wanted all the moneys claimed to be refunded, for that he could simply have ordered the sums to be paid as asked. The assessees have found no fault with this nor did they appeal this order of the Appellate Collector. It is only when the order was implemented by the Assistant Collector that they discovered that they had not got all that they asked for. One might contest the Assistant Collector's calculations that led to rejection of part of the claims and whether the basis which formed his grounds for passing only a part of the claim was right. We do not know because that order is not under challenge before us and we have no details about it.
6. M/s. Ch. Dewan Chand's complaints are (1) that the Appellate Collector should not have passed in 1979 an order directing de novo decision, and (2) the Assistant Collector had no authority to deviate from the order of the Appellate Collector dated 29-11-1975.
7. But quite extraordinarily the assessees themselves took part in the proceedings that arose from the Appellate Collector's order dated 9-8-1979 and not only submitted replies to the show cause notice issued by the Assistant Collector when he started de novo proceedings, but they also appeared in a personal hearing before him on 6-12-1979. The Assistant Collector issued two orders on 22-4-1980 rejecting the two claims for reasons he has narrated in detail. It was only after this that the Appellate Collector's order became unacceptable. So they filed a review application to the Government of India under Section 36(2) of the Central Excises and Salt Act.
8. The counsel for M/s. Ch. Dewan Chand said that when the Appellate Collector gave the relief in 1975, it was the final order, but when approached, the Assistant Collector passed his orders of 17-6-1977 and 25-5-1977 without even a reference to that order. Unfortunately, we do not have the two refund claims that they presented to the Assistant Collector and we do not, therefore, know the details of these documents. However, they went in appeal and this resulted in the order of 9-8-1979 in which the Appellate Collector said that the Assistant Collector had rejected the claims on grounds which had not been discussed earlier and regarding which the appellants had not had an opportunity to explain their view point. This order of the Appellate Collector was described by the learned counsel for the department as a clever manoeuvre, but it was not. The orders of the Assistant Collector were short to the point of being unintelligible; and since they involved rejection of parts of the claims, it was necessary to have orders which would explain the reasons therefor; the only way to that end was a fresh adjudication. The circumstances, that gave rise to partial acceptance of the claim by the Assistant Collector had not been narrated and so there is not much that can be said against the Appellate Collector's order, if one wanted all the truth to come out. Much of the present strife is due to the mistaken belief that the Appellate Collector's order of 1975 was an unqualified cession of the factory's claim; it was not; it was a direction to allow exemption to semis which resemble the shape of items mentioned in sub-item (i) of Item 26AA; an acknowledgement that these were goods not qualified for exemption. The relief to be given was consequential to the ruling, not more and not less. It meant for example that semis which did not resemble the shape of items in sub-item (i) were not to gain concession. The Assistant Collector, to be sure, should have taken steps to enquire and investigate and then announce his findings when he rejected part of the claims. His failure to observe due process deserves criticism.
9. The Counsel said that under Section 36(2) of the Central Excises and Salt Act, the Government of India alone could review the order of the Appellate Collector and he quoted 1982 (10) E.L.T. 562 (GOI). There is much to be said for this argument, but it is not really material to the facts we are dealing with. The counsel also submitted that the second order of the Appellate Collector was, in fact, a review of his predecessor's order. It is difficult to agree, because, when he received the appeal, the Appellate Collector saw the flaws in the orders of the Assistant Collector and, short of ordering the refund himself which, perhaps, he could have done, he chose, it would appear, the more reliable procedure of directing readjudication in order to bring out the facts that might enable him, in subsequent proceedings, to direct the refund, or, if circumstances so dictate, to reject it. The details are too sparse to enable one to conclude one way or another.
10. The learned counsel submitted that on merits the goods were assessable as bars. He produced a letter written by the Assistant Collector of Central Excise, Ludhiana, to M/s. Ch. Dewan Chand saying that "the products with thickness less than 4.7 mm and width not greater than 127 mm will be classified as hoops and strips. A product where thickness is not less than 4.7 mm and not greater than 38 mm will be classified as bar if the width is less than 127 mm and the same product will be classified as flat if the width is not less that 127 mm and not greater than 457 mm".
[Letter No. C. No. V (26AA)30/16/72/19710-11 dated 20-12-1974 from the Assistant Collector of Central Excise, Ludhiana to M/s. Ch. Dewan Chand]. The counsel for the department said that this is only a letter by an Assistant Collector and so it is. The real difficulty, however, is that we do not know the measurements, size etc. of the goods. The Assistant Collector calls them flats, while the assessees call them bars; but since it will all depend on the measurements, we cannot decide the merits one way or another when we do not have the required details about the goods.
11. The learned counsel for the department said that the Assistant Collector should not have withheld relief on the Appellate Collector's order, but she is mistaken. The Appellate Collector's order did not give full relief but only consequential relief. She also said that the Appellate Collector's decision should have been reviewed; no objection can be taken to this; all we know, however, is that it was not, and there's end to it as far as this Tribunal is concerned.
12. There is a decision of the High Court of Madras in 1981 (8) E.L.T. 194 (Madras) Re : Madras Fertilisers Ltd. where the court held that revisionary order cannot be reopened by the Assistant Collector. An order had been passed by the Government of India countermanding an order of the lower authorities which denied the benefit of exemption on fertilisers. The Government said that the notification only required the mixture of fertilisers be obtained with the aid of power and the mixed fertilisers should contain not more than one nutrient. It allowed the exemption under the notification if the conditions thereof were fulfilled. The Assistant Collector, however, laid down certain conditions before giving effect to this revisionary order. The court said that it was not permissible to do so and it set aside the order of the Assistant Collector which made those new conditions and which formed the subject of the writ petition before the High Court.
13. This is a case where the Government of India had passed a clear order allowing the notification exemption and, therefore, the Assistant Collector was not permitted to set up new conditions. In the case before us, the Appellate Collector's order of 1975 had allowed consequential relief only on certain goods, namely, semis manufactured out of small ingots which resemble the shape of items mentioned in sub-item (i) of Item 26AA. He did not allow the relief as claimed by the assessees, but only relief under certain provisions.
14. Another order which might have a bearing on this is 1982 (10) E.L.T. 67 (Bombay) Re : Hasmukhlal Amritlal Mehta and Ors. A firm of jewellers had been considered not to have enough experience in dealing in gold ornaments under the Gold Control Rules, 1969. In the series of proceedings, the Government of India came to the conclusion that they did have the experience while working with another firm of jewellers and that the authorities below were in error to find to the contrary. But, strangely, the Collector again rejected the same application of the same petitioner on the very same grounds which had been nullified by the Government of India, the proper revisionary authority. The court held he could not do so and ruled that he had no authority to reconsider the very same matter which had been ruled upon by a superior proper authority.
15. It is not so here. The Appellate Collector's order of 1975 did not order refund of the sums applied for but merely consequential relief on grounds that he spelt out. The Assistant Collector did carry out this direction and, in fact, one can say that it was because he carried out this direction that he passed only part of the claims and not all.
16. M/s. Ch. Dewan Chand cannot now reactivate the order of the Appellate Collector dated 9-8-1979 because we have seen that after he passed this order, they have taken part in the de novo proceedings (before the Assistant Collector) that were thus set in motion. The present review application or appeal was initiated only because and only after the Assistant Collector rejected both their claims in the de novo proceedings. If they have a remedy that remedy lies in an appeal from the orders of the Assistant Collector. Until the rejection of their claims in 1980, they found nothing wrong in the order of 1979 of the Appellate Collector; now they attack it as illegal, irregular and contrary to natural justice and as a review of his predecessor's order. But for reasons that have been elaborated in the preceding paragraphs, these applications or appeals deserve to be rejected, and so they are rejected.
M. Santhanam, Member (J)
17. While I agree with my learned brother that the Review application is liable to be rejected, I have to add that the Appellate Collector in his order dated 29-11-1975 has laid down the basis on which the refund claim had to be disposed. It cannot be said that as a result of the order passed in the appeal aforesaid an ascertained sum of refund became due to the appellants. The Appellate Collector has adverted to the Judgment of the Hon'ble Allahabad High Court which in turn has expressed its opinion on the Notification at issue. In this case the words "Consequential relief is allowed" postulates further enquiry by the Assistant Collector to accord relief in terms of the observations contained in that order. This the Assistant Collector has proceeded to do, but erred in not issuing any show cause notice to the appellants before coming to a conclusion one way or the other. Under the peculiar facts of the case, it cannot be said that the Assistant Collector had no ground for consideration of the exact amount to be refunded.
18. Needless to say that the Assistant Collector should afford the appellants an opportunity to explain their case as envisaged in the orders of the Appellate Collector.