Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise vs Azo Dye Chem on 12 July, 2000
Equivalent citations: 2000(120)ELT201(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. This application for condonation of delay in filing appeals E/2520 to 2538/99-C is before this larger Bench on a reference made as per order dated 11-5-2000.
2. Circumstances under which this application happened to be filed are as follows.
3. Show cause notices dated 4-11-1990 were issued against M/s. Highland Dye Works and twenty others proposing action for violation of various provisions contained in the Central Excise Act, 1944. Noticees objected to the proposed action. After considering their objections, Collector of Central Excise, Mumbai-III dropped the proceedings by order No. 18/92, dated 31-3-1992. In exercise of the powers conferred on the Central Board of Excise and Customs under Section 35E(1) of the Act, the Board gave direction to the Collector of Central Excise, Mumbai-III, to apply to this Tribunal for correct determination of the points found by the Board in its order No. 65-R/93, dated 30-3-1993. In compliance with the order passed by the Board, appeal E/2131/93-C was filed before this Tribunal on 14-6-1993. In that appeal, M/s. Highland Dye Works, Sonapur Road, Mumbai - 400 078 were made the sole respondent. Other noticees to whom show cause notices were issued and the proceedings were dropped by the Collector, were not found made econominee parties in the appeal. Against those parties the department now wants to file appeals. Since those appeals were filed nearly six years after the date of the order of the Board, this application for condoning the delay caused in the filing of the appeals happened to be filed. The application went before a Bench consisting of two Members. Judicial Member took the view that the Tribunal has no power to condone the delay on the facts and circumstances of this case. In support of this conclusion, learned Member relied on the decision of this Tribunal in miscellaneous order No. 108/98-C, dated 13-7-1998 in the case of Super Pack v. Collector of Central Excise, Raipur. Learned Technical Member took up the stand that this Tribunal has got ample power to condone the delay in view of the provisions contained in Clause (4) of Section 35E of the Act. He also expressed the opinion that the issue relating to condonation of delay under Section 35E(4) of the Act be referred to a larger Bench for decision. As a result of the difference of opinion expressed by the two Members constituting the Bench, the matter was placed before a third Member. The third Member, who happened to be a Judicial Member, without pronouncing on the power of this Tribunal to condone the delay under Section 35E(4) of the Act, expressed his opinion to refer the issue to the larger Bench. Thus, in accordance with the majority view to refer the issue regarding the power of this Tribunal to condone the delay, this matter has come before us sitting in larger Bench. The question referred is :
"The issue as to whether the provisions of Section 35B of the Central Excise Act relating to COD may be read into Section 35E(4) of the Act is placed before the Hon'ble President for reference to a Larger Bench."
Section 35E(1) empowers the Board that it may, of its own motion, call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under the 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 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 Board in its order. According to Sub-section (3) of Section 35E, the Board can pass an order of this nature within one year from the date of the decision of the adjudicating authority. That clause makes it clear that no order contemplated by Sub-section (1) referred to earlier shall be made after the expiry of one year from the date of decision of the adjudicating authority. The steps that are to follow the decision of the Board passed in compliance with the above provisions are contained in Clause (4) of the same Section. That clause as is relevant for our purpose states that where in pursuance of an order under Sub-section (1), the adjudicating authority makes an application to the Appellate Tribunal within a period of three months from the date of communication of the order under Sub-section (1) to the adjudicating authority, such application shall be heard by the Appellate Tribunal as if such application were an appeal made against the decision of the adjudicating authority. It goes on to state that the provisions contained in the Act regarding appeals shall, so far as may be, apply to such application. A further clarification is also incorporated in the clause which says that the provisions of the Act regarding appeals, including the provisions of subsection (4) of Section 35B, so far as may be, shall apply to such application. What are the consequences that are falling out of these provisions?
4. On examination into the legality or propriety of an order passed by a Commissioner, the Board may direct the Commissioner to apply to the Appellate Tribunal for the determination of the points arising out of the decision which are to be specified by the Board in its order. The order of the Board must be passed within one year from the date of the decision rendered by the Commissioner. The order so passed by the Board should be communicated to the adjudicating authority. Within three months from the date of its communication to the adjudicating authority, that authority should make an application to this Tribunal. The application so filed within the period of three months should be heard by this Tribunal as if such application were an appeal made against the decision of the adjudicating authority.
5. Clause (4) mandates that the adjudicating authority should apply to this Tribunal within a period of three months from the date of the communication of the order passed by the Board. The application so filed by the adjudicating authority within three months could be heard by this Appellate Tribunal as if that application were an appeal against the decision of the adjudicating authority. This is crystal clear from the use of the following words :-
"Where the adjudicating authority makes an application to the Appellate Tribunal within a period of three months from the date of communication of the order under Sub-section (1), such application shall be heard by the Appellate Tribunal, as if such application were an appeal made against the decision".
(Emphasis added) What is meant by these words "such application". "Such application" should be an application filed by the adjudicating authority within a period of three months from the date of communication of the order passed by the Board. Only an application filed by the adjudicating authority within the said period can satisfy the description "such application" found in Clause (4) of Section 35E. When such an application is before the Tribunal, that application is to be heard by the Appellate Tribunal as if it is an appeal against the decision of the adjudicating authority. In deciding that appeal by the appellate authority, Clause (4) further states that the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 35B shall, so far as may be, apply to such application. But for the specific inclusion of Sub-section (4) of Section 35B, no assessee or noticee, who was aggrieved by any part of the order passed by the adjudicating authority, could have filed a cross-appeal. Right of appeal or right to file cross-appeal is to be conferred by statute. In the absence of specific conferment of such a power, no noticee could have filed cross-appeal against the original order in an application filed by the adjudicating authority pursuant to the direction given by the Board, before the Appellate Tribunal. For that purpose, provisions contained in Sub-section (4) of Section 35B have been read into Clause (4) of Section 35E of the Act.
5. Clause (4) of Section 35E provides that the Appellate Tribunal shall hear the application filed by the adjudicating authority as if it were an appeal and the provisions regarding appeals contained in the Act will apply. This statement contained in Clause (4) can only mean that this Tribunal should dispose of that application as if an appeal has been filed in conformity with the provisions relating to appeals. In other words, this provision will not make the substantive rights relating to appeal to apply to applications filed by the adjudicating authority pursuant to the direction of the Board.
6. Appeals to this Tribunal are governed by the provisions contained in Section 35B of the Act. Any person aggrieved by the order mentioned therein can prefer an appeal to the Tribunal. So also if the Commissioner is of the view that an order passed by the Appellate Commissioner under Section 35B of the Act is not legal or proper, he can authorise an officer to prefer an appeal to this Tribunal. An appeal by the aggrieved party or by the Commissioner in the above situation should be filed within three months from the date on which the order sought to be appealed against was communicated. Such an appeal, if happened to be filed beyond the period of three months, can be admitted by the Tribunal because of the specific power conferred on it by Section 35B(5) of the Act. Such a power has not been given to this Tribunal in the case of applications contemplated by Section 35E(4) of the Act. Section 35E(4) further states that the provisions of the Act regarding appeals shall, so far as may be, apply to "such application". This provision does not authorise this Tribunal to extend all the provisions that are applicable to appeals before it to an application falling within Clause (4) of Section 35E. Provisions of the Act regarding appeals, so far as may be, alone can apply to such application. As per Venkata-ramaiya's Law Lexicon, Second edition, Volume IV, the words "so far as may be" mean to the extent it is applicable. Ramanatha Aiyar's Law Lexicon states that "so far as nay be" means to the extent possible. The scope of these words was dealt with by Their Lordships of the Supreme Court in Dr. Pratap Singh v. Director of Enforcement, AIR 1985 SC 989. According to Their Lordships, the expression "so far as may be" has always been construed to mean that those provisions may be generally followed to the extent possible. When understood with this limitation, it is clear that all the provisions of the Central Excise Act, 1944, regarding the substantive right of appeal to this Tribunal are not extended to an application contemplated by it. Only those which are procedural in nature can apply to such an application.
7. Learned Departmental Representative relied on the decision of a larger Bench of this Tribunal in India Automotive Ltd. Adityapur v. Collector of Central Excise, Patna reported in 1986 (26) E.L.T. 99 in support of his contention that this Tribunal has got ample power to condone the delay caused in filing an application falling within the purview of Section 35E(4). In that case, the facts were as follows. Adjudicating authority, namely, the Deputy Collector passed an order which was against the department. The Collector of Central Excise, Patna passed an order directing the Deputy Collector to file an appeal against the Deputy Collector's order-in-original. Thereupon, an appeal was filed before the Collector (Appeals). He set aside the order of the Deputy Collector and decided the issue against the assessee. On appeal by the assessee, a preliminary question arose as to whether appeal is maintainable in terms of Section 35B of the Act. The majority took the view that the appeal is maintainable holding that an appeal would lie to the Appellate Tribunal under Section 35B against an order passed by the Collector (Appeals) under Section 35E(4) of the Act. This decision has no relevance to the issue raised in the petitions before us. Learned Departmental Representative then relied on decision of this Tribunal in Swarajya Cement India Ltd. v. Collector of Central Excise, Delhi reported in 1998 (102) 347 to support his contention. That was an appeal against an order passed by the Collector (Appeals) allowing a departmental application filed under Section 35E(4) of the Act. Appellant raised a point about the appeal having been filed by the Assistant Collector on the authorisation of the Collector beyond the permitted period. There was a delay of ten days on the part of the Assistant Collector in filing the appeal, which was condoned by the Collector (Appeals). Dealing with this issue, this Tribunal observed :
"On the preliminary issue of the appeal by the Assistant Collector to the Collector (Appeals) being barred by limitation and hence not condonable by that authority as there is no express provision under Section 35E for affording that relaxation, we find that the provisions of Sub-section (4) provide a complete answer to this objection. It is provided therein that an application by the authorised officer to the Collector (Appeals) shall be heard as if that were an appeal made against the order of the adjudicating authority and that the provisions of the Act regarding the appeals including the provisions of subsection (4) of Section 35B shall apply to such applications. Thus whatever course is open to the appellate authority while disposing of an appeal would apply pari passu to an application made under Section 35E and thus would include the power to condone the delay also."
This conclusion reached by the Bench, we are afraid, is not correct. The true scope and ambit of Clause (4) of Section 35E have not been examined in the said decision.
8. Learned Departmental Representative then brought to our notice the decision of a Bench of this Tribunal in Collector of Central Excise v. New Tobacco Company Ltd., 1999 (109) E.L.T. 640 in support of his argument that the Tribunal has power to condone the delay in filing an appeal. In that case, a show cause notice was issued to M/s. New Tobacco Company Ltd. and seventeen others. The Collector of Central Excise passed a common order-in-original against all the noticees. That order was communicated to all the noticees, namely, eighteen in number. This order was reviewed by the Central Board of Excise and Customs. In pursuance of the order of the Board, an appeal was filed by the Collector of Central Excise with all the eighteen noticees as respondents. During the pendency of the appeal, Revenue sought to file seventeen supplementary appeals against each of the noticees who were mentioned as respondents in the earlier appeal. Then the question arose as to whether the seventeen appeals are to be admitted after condoning the delay. The Bench took the view that appeal having been preferred against all the eighteen noticees by filing the first appeal, the filing of supplementary appeals was purely procedural. The Bench observed :
"Since adjudication order was one and since the review was in respect of the allegations dropped, reading the two together and finding that since the composite appeal pertained to the persons against whom allegations have been dropped and they were required to be examined in appeal, therefore, the list was sufficient and one composite appeal served the purpose. In regard to issue of summons, we note that had the appeals come up for hearing, summons would have gone to all the parties mentioned in the list. We have also perused the case law cited and relied upon by both the sides. We have considered the various arguments adduced. We note that in the present case, filing of supplementary appeals was procedural inasmuch as the composite appeal was self-contained. It was not only in respect of one individual, but it was in challenge of the decisions on allegations contained in Part I of the Show Cause Notice vide Adjudication Order No. 22/1991."
The said decision has no application to the facts before us. In the instant case, even though there were twenty noticees and the order-in-original related to all of them, appeal was filed against Highland Dye Works alone. Other noticees were not arrayed as respondents in the appeal. So, the decision cited cannot be of any assistance to the department.
9. In view of what has been stated above, we answer the reference in the following manner :-
In an application filed under Section 35E(4) of the Act, the Tribunal has no power to condone the delay caused in filing the appeal beyond the period of three months allowed by that clause.
10. In the light of this answer given by us on the reference, Bench will dispose of the application on merits.