Customs, Excise and Gold Tribunal - Calcutta
Commissioner Of Customs (Port) vs Goel Airshrienk (India) Ltd. on 4 July, 2007
Equivalent citations: 2007(122)ECC248, 2007(148)ECR248(TRI.-KOLKATA)
ORDER D.N. Panda, J.
1. This batch of appeals involves the common question of law relating to maintainability for which all such appeals are heard analogous on such issue. Appeal No. EDM-394/03 was earlier heard on 20.3.07. Appeal No. CDM-61/03 was earlier heard on 27.3.07. These cases were listed again today along with other similar appeals to hear on the preliminiary question as to whether prior to the amendment made in 2005 to Section 35B(2) of Central Excise Act, 1944 and similar provision under the Customs Act, 1962, the Commissioner himself can file appeals against the Orders of the Commissioner (Appeals) or not.
2. Today when the matter was heard, Shri S.K. Bagaria, learned Senior Advocate was not present. However, he had expressed his views on the earlier date of hearing on 27.3.07. Shri C.S. Lodha, learned Advocate who was present in the court today, also gave his views on the issue at the request of the Bench, as the matter was of importance, all the advocates and consultants present during the hearing today were also invited to give their views.
3. Section 35B(2) of the Central Excise Act, 1944 prior to its amendment by Section 79 of the Finance Act, 2005 at the relevant point of time read as follows:
(2) The Commissioner of Central Excise may, if he is of opinion that 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 his behalf to the Appellate Tribunal against such order.
4. Similar provision as that was existing under Section 129A(2) of the Customs Act, 1962 at the relevant point of time before its amendment in 2005 read as follows:
(2) The Commissioner of Customs may, if he is of opinion that an order passed by the Appellate Commissioner of Customs under Section 128, as it stood immediately before the appointed day, or by the Commissioner (Appeals) under Section 128A, is not legal or proper, direct the proper officer to appeal to his behalf to the Appellate Tribunal against such order."
5. While arguing the matter on 20.3.07 as well as today, Dr. Samir Chakraborty, learned Advocate states that as per the express provision under Section 35B(2), the jurisdictional Commissioner after forming an opinion that the Order passed by the Commissioner (Appeals) is not legal or correct has to authorise a Central Excise Officer to file an Appeal before the Tribunal. The legal provisions do not permit him to directly file an appeal by himself to the Tribunal under his own signature. In this connection, Dr. Chakraborty also cites the decision of the West Regional Bench of the Tribunal in the case of C.C.Ex., Surat-I v. Shree Ganesh Dyeing & Printing Works -2006 (76) RLT 58 (CESTAT-Mum.). He points out that as per the majority decision in the case of Ganesh Deying (cited supra), filing of appeal by Commissioner himself instead of authorising another official shall not be inaccordance with provision contained in Section 35B(2) of the Central Excise Act, 1944. He also states that the said Order of the Mumbai Bench has subsequently been followed by the Ahmedabad Circuit Bench in the case of C.C.Ex., Sural-I v. Varun Dyeing and Printing Mills and Ors. and vice versa 2007 (78) RLT 438 (CESTAT-Mum.). He also cites that between the last date of hearing and now, the Single Member Bench at New Delhi has referred the matter to a Larger Bench as the said Bench has found that the decision in the case of Shri Ganesh Deying (cited supra) is in conflict with the earlier decision of the Tribunal in the case of C.C.Ex, New Delhi v. Kay Iron Works (P) Ltd. . He also states that the taxing statutes are required to be construed very strictly and the procedure for filing the appeal in the statute is to be strictly followed and the Commissioner cannot bypass the procedure of authorising Central Excise Officer himself to file an appeal. In this case, he cited the decision of the Hon'ble Supreme Court in the case of Hotel and Restaurant Association v. Star India Pvt. Ltd. reported in 2007 (25) STR 161 (SC).
6. Shri N.C. Roychowdhury, learned Senior Advocate appearing for the Department in one of these cases states that according to him, since the Commissioner can authorise filing of an appeal, he himself has power to file the appeal. According to him, any one who can authorise to do an act, is not prevented to do the same by himself. He further states that the Tribunal has been all along allowing appeals filed directly by the Commissioners and in this connection, he cites the decision of the Commissioner of Customs-II, New Delhi v. Raj Kumar Madan which held that appeal having been filed by Commissioner himself, Sub-section (2) of Section 129A of the Customs Act, 1962 is not attracted and recording of satisfaction of the Commissioner is also not required. Shri Roychowdhury is of the view that since the Commissioner is empowered to do all that his subordinate officers can do, the Commissioner can also file the appeal since he can authorise his subordinate officer to file such appeal. Shri Roychowdhury also submits that the right of appeal is that of the Commissioner and he cannot be deprived of the same.
7. Shri Bagaria, learned Senior Advocate appearing in another case on the previous occasion i.e. on 27.3.07, had made his position clear that even though he was appearing against the Department, he did not subscribe to the proposition that the Commissioner cannot file appeal directly.
8. Shri C.S. Lodha, learned Advocate also states that even though he is also appearing against the Department, he is in agreement with the submission made by Shri N.C. Roychowdhury. Shri Lodha further states that the Commissioner is required to authorise any Central Excise Officer to file an appeal and by definition, Chief Commissioners etc. are all Central Excise Officers. Therefore, he has the power to authorise himself also, since he is a Central Excise Officer. Viewed from this perspective, the filing of appeal by the Commissioner himself, is legal and proper. He also submits that when a person has power to authorise anybody to do a thing on his behalf, his power to do the same thing is not extinguished. He gave an example of the same thing giving a Power of Attorney to do a thing. In such a case, the person who gives his Power of Attorney can also do the same himself.
9. The learned Advocates also draws attention of the Bench on the issue as to whether filing of an appeal is an exercise of substantive power or it is a mere procedural requirement. Shri Roychowdhury, learned Senior Advocate and Shri Lodha, learned Advocate, both were of the view that while the decision to file an appeal is an exercise of substantive power, the procedure for authorising some one to file the appeal is a procedural requirement and if the same is strictly followed as prescribed under the statute, the substantive right to file the appeal cannot be taken away. Dr. Chakraborty, learned Counsel, however, was of the diametrically opposite view. According to him, as stated above, all the provisions in taxing statute should be strictly construed and if the procedural provisions are not followed, the appeal filed contrary to the procedural requirement is not maintainable. Shri Lodha, learned Advocate refers to the Hon'ble Supreme Court's decision in the case of Hotel and Restaurant Association (cited supra) and stated that the said decision and the other decisions in the same line deal with the different kinds of procedures which are substantive in nature and those are required to be followed strictly in view of Hon'ble Apex Court's decision. However, according to him, the procedure regarding who should be authorised to file an appeal, is not a requirement of that kind requiring strict compliance.
10.1. Heard both sides and also gone through the relevant statutory provisions. A bare perusal of the relevant provision to Section 35B(2) of the Central Excise Act, 1944 and Section 129A(2) of the Customs Act, 1962 shows that at the relevant point of time statutory right of redressal was exercisable by revenue to appeal against an Order passed by the Appellate Commissioner if such Order was found not legal or proper. Such a right exercisable by the Commissioner was conditioned by the act of drawing of opinion as to legality and propriety of the Order. Only on drawing opinion, right to file appeal becomes exercisable. The right so exercisable by the Opinion Drawing Authority was also empowered to direct any Central Excise Officer under the Excise Law or a proper officer under Customs Law to prefer appeal on behalf of Union of India represented by Commissioner of Central Excise or Commissioner of Customs. A direction to file appeal does not make the Authority powerless or take away power of the Opinion Drawing Authority to seek appeal himself on behalf of Union of India. If the provision is read as making the Authority powerless that makes the Authority remediless. It is settled law that what cannot be done directly that cannot be done indirectly. The reverse is also true.
10.2. A Principal having right to do an act has also right to delegate to do such act by an agent. This right implies reservation of power of ratification and to do himself also. The power not mandatorily required to be delegated may be construed to be directory and the power of delegation neither abrogates nor curtails the implied power of the Principal by any means. It is to be appreciated that statutorily vested power without delegation is only exercisable by that Authority on whom such power is vested. Any other construction to the relevant provision of Section 35B(2) or the relevant provision of Customs Law run counter to the legislative intent and that would render the grant nugatory. Unless the right vested by statute is expressly prohibited to be exercised by the Principal, any construction contrary to the context would amount to denude the authority from its own power/right vested exercisable and the provision cannot be read as mandatory for no consequence of law prescribed for failure to exercise the power in the required manner.
10.3. In absence of any contrary provision either limiting power of the Commissioners or prohibiting such Commissioner to exercise the right by himself, nothing contrary can be inferred. Right to appeal under law is a statutory right granted to both sides. Such a right cannot be denied for any procedural irregularity which otherwise would result in injustice to the aggrieved, if the appeal by that party is dismissed on the ground of technicalities at the threshold. The aggrieved would be remediless and without contrary intention in law, the Court should come forward to do justice to the party by a purposeful and rational interpretation of the statutory provision. The Appellate Courts are not powerless to direct removal of curable defect which was procedural in nature or allow an opportunity to the aggrieved without depriving that party from due process of justice to seek the remedy, exercising its right in the legally acceptable manner.
10.4. At this juncture, it would be appropriate to quote the rule of interpretation of statute as held in the case of Giridhari Lal and Sons v. Balbir Nath Mathur and Ors. by the Hon'ble Supreme Court:
So we see that the primary and foremost task of a Court in interpreting a statute is to ascertain the intention of the legislature, actual or imputed. Having ascertained the intention, the Court must then strive to so interpret the statute as to promote/advance the object and purpose of the enactment. For this purpose, where necessary the Court may even depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the plainness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the Court would be well justified in departing from the so called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing, the written word in necessary.
Approving the words of Lord Denning in the case of Seaford Court Estates Ltd. v. Asher the Hon'ble Apex Court in para 12 of the Judgment in Giridharlal case (supra) held as under:
12. Whenever a statute comes up for consideration, it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them it terms free from all ambiguity.... A Judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a construction of the social conditions which gave rise to it and of the mischief which it was passed to remedy and then he must supplement the written word, so as to give force and life to the intention of the legislature. Put into homely metaphor, it is this: A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the contexture of it they would have straightened it out ? He must then do what they would have done. A judge should not alter the material of which the Act is woven, but he can and should iron out the creases.
Also the principles of interpretation laid down Lord Simon in the case of Rughy Joint Water Board v. Foottit (1972) 1 All ER 1057 was:
The task of the Courts is to ascertain what was the intention of Parliament, actual or to be imputed, in relation to the facts as found by the Court.... But on scrutiny of a statutory provision, it will generally appear that a given situation was within the direct contemplation of the draftsman as the situation calling for statutory regulation: this may be called the primary situation may present themselves for judicial decisions- secondary situations. As regards these secondary situations, it may seem likely in some cases that the draftsman had them in contemplation; in others not. Where it seems likely that a secondary situation was not within the draftsman's contemplation, it will be necessary for the Court to impute an intention to Parliament in the way I have described, that is, to determine what would have been the statutory intention if the secondary situation had been within Parliamentary contemplation (a secondary intention).
Also recognizing that Harold Laski said in his Report of the Committee on Ministers' powers viewed:
The present methods of statutory interpretation make the task of considering the relationship of statutes, especially in the realm of great social experiments, to the social welfare they are intended to promote one in which the end involved may become unduly narrowed, either by reason of the unconscious assumptions of the judge or because he is observing the principles of interpretation devised to suit interests we are no longer concerned to protect in the same degree as formerly.... The method of interpretation should be less analytical and more functional in character, it should seek to discover the effect of the legislative precept in action so as to give full weight to the social value it is intended to secure.
In 1981, the Australian Parliament added a new Section 15AA(1) to the Acts Interpretation Act, 1901, requiring that in statutory interpretation "A construction that would promote the purpose of object" of an Act (even if not expressed in the Act), be preferred to one that would not promote that purpose or object. Julius Stone in his Precedent And Law-Dynamics of Common Law Growth' also refers to this provision.
10.5. A memorandum of appeal can be signed by the appellant or by his pleader under Code of Civil Procedure, 1908. Failure of the appellant to sign memo of appeal is only an irregularity and the irregularity can be cured subsequently and this was ratio laid down by the Hon'ble Supreme Court in the case of Shastri Wagnapurushdasji and Ors. v. Bhundar Das Vaishya and Anr. reported in 1966 (SC) 1119. Para 13 of the said judgment which deals with such principle, is reproduced below for convenience of reading:
(13) Before dealing with the principal point which has been posed at the commencement of this judgments it is necessary to dispose of two minor contentions raised by Mr. V.J. Desai who appeared for the appellants before us. Mr. Desai contends that the High Court was in error in treating as competent the appeal preferred by respondent No. 1. His case is that since the said appeal had not been duly and validly filed by an Advocate authorised by respondent No. 1 in that behalf, the High Court should have dismissed the said appeal as being incompetent. It will be recalled that the appeal memo as well as the Vakalatnama filed along with it were signed by Mr. Daundkar who was then the Assistant Government Pleader, and the argument is that since the Vakalatnama had been signed by respondent No. 1 in favour of the Government Pleader, its acceptance by the Assistant Government Pleader was invalid and that rendered the presentation of the appeal by the Assistant Government Pleader on behalf of respondent No. 1 incompetent Order 41, Rule 1 of the Code of Civil Procedure requires, inter alia that every appeal shall be preferred in the form of a memorandum signed by the appellant or his pleader and presented to the Court or by such officer as it appoints in that behalf. Order 3, Rule 4 of the Code relates to the appointment of a Pleader. Sub-rule (I) of the said Rule provides, inter alia, that no Pleader shall act for any person in any court unless he has been appointed for the purpose by such person by a document in writing signed by such person. Sub-rule (2) adds that every such appointment shall be filed in court and shall be deemed to be in force until determined with the leave, of the Court in the manner indicated, by it. Technically, it may be conceded that the memorandum of appeal presented by Mr. Daundkar suffered from the infirmity that respondent No. 1 had signed his Vakalatnama in favour of the Government Pleader and Mr. Daundkar could not have accepted it, though he was working in the Government Pleader's office as an Assistant Government Pleader. Even so, the said memo was accepted by the office of the Registrar of the Appellate Side of the High Court, because the Registry regarded the presentation of the appeal to be proper; the appeal was in due course admitted and if finally came up for hearing before the High Court. The failure of the Registry to invite the attention of the Assistant Government Pleader to the irregularity committed in the presentation of the said appeal cannot be said to be irrelevant in dealing with the validity of the contention raised by the appellants. If the Registry had returned the appeal to: Mr. Daundkar as irregularly presented, the irregularity could have been immediately corrected and the Government Pleader would have signed both the memo of appeal and the Vakalatnama. It is an elementary rule of justice that no party should suffer for the mistake of the court or its office. Besides, one of the rules framed by the High Court on its Appellate Side - Rule 95 seems to authorise an Advocate practising on the Appellate Side of the High Court to appear even without initially filing a Vakalatnama in that behalf. If an appeal is presented by an Advocate without a Vakalatnama duly signed by the appellant he is required to produce the Vakalatnama authorising him to present the appeal or to file a statement signed by himself that such Vakalatnama has been duly signed by the appellant in time. In this case, the Vakalatnama had evidently been signed by respondent No. 1 in favour of the Government header in time; and so, the High Court was plainly right in allowing the Government Pleader to sign the memo of appeal and the Vakalatnama in order to remove the irregularity committed in the presentation of the appeal. We do not think that Mr. Desai is justified in contending that the High Court was in error in overruling the objection raised by the appellants before it that the appeal preferred by respondent No. 1 was incompetent.
10.6. The modern positive approach towards law is to make a purposeful construction to effectuate the object and purpose of the Act. This we hold finding support from the Hon'ble Supreme Court's judgment in the case of Administrator, Municipal Corporation, Bilaspur v. Dullaraya Dahankar .
11. Keeping in view the rule of interpretation, we are of considered opinion that to do justice, removing injustice, curing of technical defect is also permissible. While holding so, we also hold that the Commissioner himself is not prevented to exercise the right of filing of appeal on behalf of Union of India signing the Appeal Memorandum himself without authorising an officer to do so. Any interpretation contrary to this may lead to disaster and disharmony and leave a wrong unremedied taking away right of appeal.
12. In view of the fact that there are divergent views taken in the cases of C.C.Ex., New Delhi v. Kay Iron Works (cited supra) and C.C-II, New Delhi v. Raj Kumar Madan (cited supra) on one hand and the case of Ganesh Dyeing on the other, and since the matter has been referred to the Larger Bench for considering the issue and to reconcile the divergent views in a group of appeals i.e. C.C.Ex., Indore and Ors. v. Lloyd Insulation (India) Ltd., Quality Foils (India) Pvt. Ltd. and Ors. in Misc. Order No. M/134/07-SM (BR) dated 28.3.07, we also refer this batch of Appeals to the Larger Bench for resolving the issue after taking into account our observations and submissions made by the learned Advocates as recorded above. The Registry is directed to place these cases before the Hon'ble President for constitution of a Larger Bench and upon decision by that Bench, the matters shall be decided on the facts and circumstances of each case.
Pronounced in the court on 04.07.07