Customs, Excise and Gold Tribunal - Delhi
Basti Sugar Mills Co. Ltd. vs Collector Of Central Excise on 31 July, 1989
Equivalent citations: 1989(25)ECR207(TRI.-DELHI), 1990(47)ELT404(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. The following interesting question arose for our determination when the case was taken up for hearing in the circumstances mentioned hereinafter -
"Whether the oral Order pronounced by the Bench on 19-4-1988 in the open Court allowing the appeal with the remark that 'Order to follow1 amounts to an 'Order' passed by the Appellate Tribunal within the meaning of Sub-section (1) of Section 35-C of the Central Excises and Salt Act, 1944."
2. Circumstances leading to the present controversy are that being dissatisfied with the order of recovery of Rs. 1,13,802.62 from the appellants M/s. Basti Sugar Mills Co. Ltd., Walterganj, Basti, they filed their present appeal before the Tribunal under Section 35-B of the Central Excises and Salt Act, 1944 (hereinafter for short 'Act'). The same was heard on merits by the Special Bench of the Tribunal consisting of Shri S.D. Jha, Vice-President (Judicial) and S/Shri I.J. Rao and D.C. Mandal, both Technical Members on 19-4-1988. After hearing the appeal the Bench orally pronounced the Order allowing the appeal with the remark that "Order to follow". The said Order of the Bench dated 19-4-1988 reads as under -
"Appeal allowed.
Order to follow.
Sd/-S.D.Jha V.P.(J) Sd/- I.J. Rao 19-4-1988 Sd/- D.C. Mandal"
3. It appears that after pronouncing the Order orally as above, the case was entrusted to Shri D.C. Mandal, Technical Member for writing the reasoned Order, but due to his serious illness Shir D.C. Mandal, learned Technical Member had to proceed on leave. Meanwhile the learned Vice-President (Judicial) Shri S.D. Jha, as he then was, opted to go back to his parent office (High Court of Madhya Pradesh) and was scheduled to relinquish his charge on 3-5-1988. Under these circumstances Shri D.C. Mandal, learned Technical Member sent back the case to Shri S.D. Jha opining for re-hearing of the case with the following note -
"Before I could write the Order, I fell seriously ill and I am now on leave. I am not yet fit to resume duty and do the work. V.P. (J) may like to mark this case for rehearing as he is relinquishing the charge on 3-5-1988.
V.P. (J) Sd/- D.C. Mandal 29-4-1988"
4. On receipt of the papers alongwith the Note as aforesaid, Shri S.D. Jha, Vice-President (Judicial) opined for the rehearing of the case and made the following Note on the file -
"In view of Shri Mandal Note, hearing may be reopened as I am under orders of transfer.
Sd/-S.D.Jha V.P.(J)
A.R.(C) 29-4-1988"
5. Thereafter the case was re-opened and listed for hearing on 13-1-1989 under intimation to the parties giving out the circumstances, as aforesaid, under which the case was re-opened for hearing.
6. When the case was taken up for hearing Shri D.N. Gaur, learned Consultant for the appellants undeterred by the provisions of the Act and a catena of decisions against him attempted to break fresh ground by raising a preliminary objection that the Bench has already passed its Order on 19-4-1988 allowing the appeal and therefore, no question of re-opening/re-hearing arises irrespective of the fact that reasoned/detailed Order could not be passed and cited the case of Cosmic Radio v. Union of India, 1983 (12) ELT 84 (Bom.), wherein the Hon'ble Bombay High Court held that the Order passed by the Assistant Collector comes into operation as soon as it is signed and the mere fact that it was never communicated to the party is no ground to hold that the Order so passed by the Assistant Collector is not in existence i.e. it comes into operation as soon as the same is signed and is not made dependent upon the communication of the same to the parties concerned - a case totally inapt to the controversy in hand.
7. In reply Shri L.C. Chakraborthy, learned Departmental Representative submitted that though the appeal was allowed by an oral 'Order' the same is not an 'Order' as contemplated by Section 35-C of the Act because no detailed/reasoned Order was ever passed after the aforesaid oral pronouncement. To buttress his contention he relied upon the ratio of the Order passed by this Tribunal in the case of Arunodaya Mills Ltd. v. Collector of Customs, 1988 (37) ELT 459, wherein inter alia it was held that unless all the Members constituting the Bench were available on the date of the final Order, the Order purported to be issued would not be valid.
8. Since an interesting question of law of frequent occurrence has arisen it has become necessary for us to investigate into the fundamentals as to what is an 'Order' with in the meaning of Sub-section (1) of Section 35-C of the Act.
9. Central Excises and Salt Act does not define "Order" occurring in Section 35-C of the Act like the Code of Civil Procedure, wherein the words 'judgment', 'Order' and 'decree' are defined.
10. Section 2(9) of the Code of Civil Procedure defines 'Judgment' as meaning the statement given by the Judge of the grounds of a decree or order. Section 2(14) says that 'order' means the formal expression of any decision of a Civil Court which is not a decree. Section 2(2) of the Code says that 'decree' means the formal expression of adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final.
11. We have no definition of the term "Order" in the Central Excises and Salt Act, 1944 and also in 'The Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982' framed by the Tribunal in exercise of its powers conferred by Sub-section (1) of Section 35-D of the Act, except that Rule 26 of it provides that "every Order of the Tribunal shall be in writing and shall be signed and dated by the Members constituting the Bench concerned". If the definition of the term 'judgment' contained in Section 2(9) and of the term 'Order' contained in Section 2(14), C.P.C. is disregarded, there remains the ordinary meaning to be applied to the word 'Order'. Its ordinary meaning is a decision involving an adjudication of rights. The word "Order" is not a term of art. It has no fixed legal meaning. In 67 Corpus Juris Secundum 529 the following statement occurs :-
"'Order' as a noun has been held equivalent to or synonymous with 'decision', See 26 CJS 38 Note 68, 'finding', See 36 CJS 767 Note 72...."
(Emphasis supplied)
12. The expression 'decision' has a wide connotation. Whenever a question is determined or a definite opinion is formed or a judgment is rendered, or a conclusion is arrived at, after weighing the reasons for and against the proposition, it is a decision. In 26 CJS 41, there appears the following statement :-
"A popular and not a technical or legal word, and a very comprehensive term, having no fixed, legal meaning. It has been said that a decision necessarily involves a dispute, actual or potential and the reaching of a conclusion; and it implies the power to say 'Yes' or 'No'...In the civil law generally it means the determination of a question, the final order which disposes of a suit or cause; also that portion of a statute which orders or directs the performance of a duty....Under some circumstances 'decision' has been held equivalent to or synonymous with 'ascertainment'. See 6 CJS 788 Note 35, 'award' See 7 CJS 1311 Note 57 and 'Order'."
(Emphasis ours)
13. In the case of Gangadhar v. N.A.M. Society, AIR 1971 Madh. Prad. 16, a Division Bench of the Madhya Pradesh High Court while interpreting the word "Order" employed in Section 77 of the Madhya Pradesh Co-operative Societies Act, 1960 (which provides for Appeals) and after quoting with approval the said definition of the word "Order" given in 26 CJS 38 Note 68 and 36 CJS 767 Note 72, supra observed that the word 'Order' as used in Section 77 of the Act is comprehensive enough to include every decision, award or order made under the Act.
14. After stating so we now proceed to interpret the real meaning and purport of an "Order" which possibly could be an Order which is required to be passed by this Tribunal in terms of Section 35-C of the Act and for that purpose we have to look into the Scheme and the Provisions of the Act since we have no definition of the term 'Order' in the Act as aforesaid.
15. Chapter VI of the Act provides for "Adjudication, Confiscation and Penalties". Chapter VI-A makes provisions for "Appeals". Section 35-B which appears in Chapter VI-A of the Act provides for the filing of appeal to this Tribunal against the decision or orders mentioned therein and also for cross-objections. Sub-section (1) of Section 35-C of the Act provides that the Appellate Tribunal may, after giving to the parties to the appeal an opportunity of being heard, passsuch Orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may remand the case as it may think fit, as the case may be, after taking additional evidence, if necessay. Sub-section (4) of the Section provides that "save as provided in Section 35-G or Section 35-L Orders passed by the Appellate Tribunal on appeal shall be final. Subsection (3) of the Section provides that the Appellate Tribunal shall send a copy of every Order passed by it under this section to the Collector of Central Excise and the other party to the appeal. Section 3S-G makes the provisions for reference and provides that either party may make an application for reference requiring the Appellate Tribunal to refer to the High Court any question of law arising out of an Order passed by the Tribunal (not being an Order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment). Sub-section (3) of the Section empowers the High Court to direct the Tribunal to state the case and to refer it for its decision where reference application made to the Tribunal was rejected by it. Section 35-K provides for the passing of a judgment by the High Court and the Supreme Court on the case stated before them as aforesaid. Section 3S-L makes provisions for an appeal to the Supreme Court from any Order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of the goods for purposes of assessment or from any judgment of the High Court delivered on a reference.
16. However, at this stage it would be advantageous to recall the provision of subsection (4) of Section 35-C as stated above, which clearly provides that the Order passed by the Appellate Tribunal on appeal shall be final, except to the extent provided for in Section 35-G (which speaks of Statement of case to High Court) or Section 35-L (which provides for an appeal to Supreme Court. The Apex Court as well as the other Courts had occasion to consider the meaning of the expression "final Order". In Tarapore & Co., Madras v. Tractors Exports, Moscow, AIR 1970 SC 1168 the Supreme Court held that the expression "final Order" means an order which finally disposes of the rights of the parties in relation to the whole suit. See also Abdul Rahman v. D.K. Cassim & Sons, AIR 1933 PC 58; Salomon v. Warner, (1891) 1 QB 734; Bozson v. Altrincham Urban District Council, (1903) 1 KB 547; and Isaacs v. Salbstein, (1916) 1 KB 139. In the case of Venkata Reddy v. Pethi Reddy, AIR 1963 SC 992 it was held that a decision is said to be final when, so far as the Court rendering it, is concerned, it is unalterable except by resort to such provisions as to permit its reversal, modification, or amendment. Similarly, a final decision would mean a decisioo which would operate as resjudicata between the parties, if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application, as is permitted under the law.
From the above it is clear that the finality is attached to the Order passed by the Tribunal except to the extent provided for in Section 35-G or Sectiori 35-M and it also operates as res judicata between the parties.
17. Now look from another angle. As stated above Section 35-G of the Act confers a right upon the parties and provides that either party may move an application for reference requiring the Tribunal to refer to the High Court any question of law (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of the goods for the purposes of assessment) arising out of the Order passed by the Tribunal under Section 35-C. It further gives a right to the party concerned to apply to the High Court requiring the Tribunal to state the case and to refer it, in case the reference application moved by the party is rejected. Section 35-L of the Act further gives a right of appeal to the Supreme Court from (a) any judgment of the High Court delivered on a reference made to it; and (b) any Order passed by the Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of the goods for the purposes of assessment. Sub-section (4) of Section 35-C attaches finality to the Order passed by the Tribunal on appeal except to the extent provided for in Section 35-G or Section 35-M. From these provisions it is clear to us that the Tribunal is under a legal obligation to pass a speaking/well reasoned Order, though it is not expressly mentioned in Section 35-C of the Act. For, the parties to the appeal have not only a right to be heard, but they are also entitled to know as to how their submissions on merits were considered by the Tribunal and in case of rejection to know the reason or reasons. In other words, recording of reasons in support of a decision by the Tribunal, being a quasi-judicial authority, is obligatory as it ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on ground of policy or expediency (See Govindrao v. State ofMadhya Pradesh, AIR 1965 SC 1222. It need not to be over-emphasised that the necessity to record the/reasons in support of the Order is greater if the "Order" is subject to appeal, for -
(i) an appellant cannot be expected to draw up his appeal without a copy of the reasoned order;
(ii) the appellant or his counsel may well want to see the order before attacking it by his memorandum of appeal;
(iii) the order to be attacked may be complicated, and it may be open to draw it up in two different ways, and the practitioner may well want to see its form before attacking it by his memorandum of appeal; and
(iv) the Legislature may not wish him to hurry to make a decision till he has well considered it, which could only be possible when a reasoned order is delivered.
18. Thus, this is a clear implication of the nature of jurisdiction exercised by the Appellate Authority; it is not required to be expressly mentioned in the statute, to borrow the words of the Hon'ble Supreme Court in the case of Mahabir Prasad v. State of U.P., AIR 1970 SC 1302.
19. Yet in the case of Vidyacharan v. Khupchand, AIR 1964 SC 1099 the Hon'ble Supreme Court had an occasion to consider, not in a position in pari-materia but a similar provision, the Representation of the People Act, 1951, and Hon'ble Subba Rao, J., after noticing Section 98 of the Representation of the People Act, which provides that at the, conclusion of the trial of an election petition the Tribunal shall make an Order (a) dismissing the election petition; or (b) declaring the election of all or any of the returned candidates to be void; or (c) declaring the election of all or any of the returned candidates to be void and the petitioner or any other candidate to have been duly elected, observed as follows -
"There is no provision in the Act defining how the decision should be given. It could not have been the intention of the Legislature that the Tribunal need not give the statement of reasons for its decision...it is the duty of the Election Tribunal to give a statement of reasons for its decision."
(Emphasis supplied)
20. More recently in the case of Commissioner of Income Tax, Bombay v. Walchand and Co., AIR 1967 SC 1435, their Lordships had an occasion to interpret the expression "pass such orders thereon as it thinks fit" appearing in Section 33(4) of the Income Tax Act, 1922 as it stood then, which is in pari-materia with the expression employed in Sub-section (1) of Section 35-C of the Act with which we are concerned. While interpreting so their Lordships observed that power -
"....to 'pass such orders thereon as it thinks fit' in Section 33(4) of the Income-tax Act, 1922, is not arbitrary: the expression is intended to define the jurisdiction of the Tribunal to deal with and determine questions which arise out of the subject-matter of the appeal in the light of the evidence, and consistently with the justice of the case. In the hierarchy of authorities the Appellate Tribunal is the final fact-finding body; its decisions on questions of fact are not liable to be questioned before the High Court. The nature of the jurisdiction predicates that the Tribunal will approach and decide the case in a judicial spirit and for that purpose it must indicate the disputed questions before it with evidence pro and con and record its reasons in support of the decision. The practice of recording a decision without reasons in support cannot but be severely deprecated."
(Emphasis supplied)
21. From the aforesaid Scheme and the provisions of the Act it is clear that the "Order" contemplated in Section 35-C of the Act is not to be understood as a mandate as defined in the Blacks Law Dictionary or in the layman's sense, but it should be one which should be taken to be meaningful and purposeful besides being one which tan-tamounts to the formal expression of any decision of the Appellate Tribunal and which decision again is based on certain intelligible grounds.
22. It is, therefore, fairly clear to us that any order passed by a judicial authority or a quasi-judicial authority should not ordinarily make it an "order", without basing it on intelligible grounds or reasons. If no such data is given for the passing of such an order, or it does not ex-facie appear in the order itself, then it would cease to be a formal expression of a decision which is the primordial garb to clothe the mandate of a judicial authority or a quasi-judicial authority with the badge of an "Order".
22A. Now we also find Rule 26 of the CEGAT (Procedure) Rules, 1982 framed by the Tribunal in exercise of the powers conferred by Sub-section (1) of Section 35-D of the Central Excises and Salt Act, 1944. The said rule provides that "every order of the Tribunal shall be in writing and shall be signed and dated by the Members constituting the Bench concerned". In the present case after the hearing was concluded the judgment was not dictated in the Open court and what was pronounced was "Appeal allowed. Order to follow". In other words the Order embodying the reasons for allowing the appeal was never dictated or pronounced in the Open Court. It may be stated that it is open to the Tribunal to issue two documents - one embodying the reasons for the decision and the other, the formal expression of its decision; the former will be its judgment and the latter, its order. It may issue both in the same document in which case the judgment as well as the order is embodied in the same document. If so it is manifest that an Order made under Sub-section (1) of Section 35-C of the Act if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order. See Vidyacharan v. Khupchand, supra wherein their Lordships of the Hon'ble Supreme Court while dealing with the case under the Representation of the People Act, 1951 observed that it is open to the Election Tribunal "to issue two documents - one embodying the reasons for the decision and the other, the formal expression of its decision; the former will be its judgment and the latter, its order. It may issue both in the same document in which case the judgment as well as the order is embodied in the same document. If so it is manifest that an order made under Section 98 of the Act if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order".
23. Thus, it is clear that formal expression of its decision to allow the appeal in the open Court on 19-4-1988 without dictating any reasoned order or the reasons of its decision cannot be said to be its Order as contemplated in Sub-section (1) of Section 35-C of the Central Excises and Salt Act, 1944.
24. Before we part with the case we may in all fairness to the appellants mention that during the course of preparing this Order we also came across with two judgments of the Hon'ble Supreme Court delivered in the case of Surendra Singh v. State of Uttar Pradesh, AIR 1954 SC 194 and Vmod Kumar Singh v. Banaras Hindu, University, AIR 1988 SC 371 but both the judgments are inapplicable to the present controversy in hand. In the case of Surendra Singh v. State of U.P., supra, three accused appealed to the High Court at Allahabad (Lucknow Bench) and the appeal was heard on 11-12-1952 by Kidwai and Bhargava JJ. Judgment was reserved. Before it could be delivered Bhargava J. was transferred to Allahabad. While there he dictated a "judgment" purporting to do so on behalf of himself and his brother Judge, that is to say, it purported to be a joint judgment: he used the pronoun "we" and not "I". He signed every page of the "judgment" as well as at the end but did not date it. He then sent this to Kidwai J. at Lucknow. He died on 24-12-1952 before the "judgment" was delivered. After his death, on 5-1-1953 his brother Judge Kidwai J. purported to deliver the "judgment" of the Court. He signed it and dated it. The date he placed on it was 5-1-1953. Bhargava J.'s signature was still there and anyone reading the judgment and not knowing the facts would conclude that Bhargava J. was a party to the delivery on 5-1-1953. The appeal was dismissed and the sentence of death was confirmed. The question before the Court was whether this "judgment" could be validly delivered after the death of one of the two Judges who heard the appeal. Answering this question it was held by the Hon'ble Supreme Court that the judgment which Kidwai J. purported to deliver on 5-1-1953 was not a valid judgment because the other Member of the Bench died before it could be delivered. Hence the appeal was allowed with the direction to the High Court for re-hearing and delivery of a proper judgment. This is not the case here. In the case of Vinod Kumar Singh v. Banaras Hindu University, supra, the Writ Petition was taken up for hearing on 28-7-1986 and when hearing was concluded, judgment was dictated in the Open Court allowing the Writ Petition and direction to the University to admit the Petitioner was ordered. It appears that subsequently on February 5,1987, the same learned Judges who had allowed the writ petition released the said case and ordered for listing the case for hearing afresh passing the following directions -
"We release this case but we direct that this case be placed before the Hon'ble Chief Justice for getting it listed before the appropriate bench as the matter was once heard by us and judgment dictated but later on was not signed and was ordered to be listed for further hearing."
Subsequently the writ petition was heard by the new Division Bench and ultimately dismissed by it on 23rd of March, 1987. On these facts it was contended before the Hon'ble Supreme Court that the judgment once pronounced in open Court became operative even without signature of the learned Judges and could not be altered. Accepting this contention their Lordships observed that as soon as the judgment is delivered that becomes operative pronouncement of the Court. That would mean that the judgment to be operative does not await signing thereof by the Court. While holding so their Lordships also observed that -
"8....There may be exceptions to the rule, for instance, soon after the judgment is dictated in open court, a feature which had not been placed for consideration of the court is brought to its notice by counsel of any of the parties or the court discovers some new facts from the record. In such a case the court may give direction that the judgment which has just been delivered would not be effective and the case shall be further heard. There may also be cases - though their number would be few and far between - where when the judgment is placed for signature the court notices a feature which should have been taken into account. In such a situation the matter may be placed for further consideration upon notice to the parties. If the judgment delivered is intended not to be operative, good reasons should be given".
Their Lordships continued to say -
"9....A judgment pronounced in open court should be acted upon unless there be some exceptional feature and if there be any such, the same should appear from the record of the case. In the instant matter, we find that there is no material at all to show as to what led the Division Bench which had pronounced the judgment in open court not to authenticate the same by signing it. In such a situation the judgment delivered has to be taken as final and the writ petition should not have been placed for fresh hearing. The subsequent order dismissing the writ petition was not available to be made once it is held that the writ petition stood disposed of by the judgment of the Division Bench on 28-7-1986".
25. From these facts it is clear that these observations were made in a case where judgment was dictated in the Court but not signed. In the present case as stated above no judgment was dictated in the Court and the Bench pronounced its formal expression of its decision with the clear direction that Order will follow which on account of the circumstances mentioned above could not be written and signed by all the Members constituting the Bench. In such a situation the appeal in hand was ordered to be listed for hearing afresh upon notice to the parties. Thus, a situation pointed out by their Lordships in the case of Vinod Kumar Singh v. Banaras Hindu University, supra, itself wherein as extracted above it was stated that a judgment pronounced in open Court should be acted upon unless there be some exceptional feature and if there be any such, the same should appear from the record of the case.
26. In the result we overrule the preliminary objection and on the point of repetition hold that the Order allowing the appeal on 19-4-1988 was not a valid Order in terms of Sub-section (1) of Section 35-C of the Central Excises and Salt Act, 1944.