Customs, Excise and Gold Tribunal - Calcutta
Commissioner Of C. Ex. & Cus., Bbsr-Ii vs Indian Aluminium Co. Ltd. on 21 March, 2002
Equivalent citations: 2002(82)ECC132, 2002ECR600(TRI.KOLKATA), 2002(144)ELT97(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. The present appeal is filed by the Revenue against the order of the CCE (Appeals) vide which she has set aside the order passed by the lower authorities and remanded the matter with directions to verify the invoices produced by the appellant for the purposes of availing Modvat credit. While remanding Commissioner (Appeals) has observed -
"It is not possible for this office to make these verifications hence the case is remanded to the Asstt. Commissioner for making necessary verifications and deciding the case afresh after observing principles of natural justice. The appeal is disposed of by way of remand."
2. The Revenue's grievance is that after enactment of Finance Bill, 2001, Section 35A(3) of Central Excise Act, 1944 has been amended w.e.f. 11-5-2001 and the powers of Commissioner (Appeals) to remand/refer the case back to the adjudicating authority has been withdrawn. Inasmuch as the Commissioner (Appeals) has passed the impugned order on 24-5-2001 and has disposed the appeal by way of remand, the impugned order is beyond the statutory powers as per amendment to Section 35A(3) of Central Excise Act, 1944. Accordingly a prayer has been made to set aside the order of the Commissioner (Appeals) and to direct the appellate authority to decide the case on merits.
3. I have heard Shri A.K. Pandit, ld. JDR for the Revenue and Shri S.P. Majumder, Advocate for the respondents.
4. It is seen that prior to 11-5-2001, when the Finance Bill, 2001 was enacted, the provisions of Section 35A(3) read as under :-
"(3) ' The Commissioner (Appeals) may, after making such further inquiry as may be necessary, pass such order he thinks fit confirming, modifying or annulling the decision or order appealed against, or may refer the case back to the adjudicating authority with such directions as he may think fit for a fresh adjudication or decision, as the case may be, after taking additional evidence."
5. After amendment, the said provisions read as below :-
"(3) The Commissioner (Appeals) shall after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against."
A comparison of the two provisions as they existed before 11-5-2001 and w.e.f. 11-5-2001 shows that the expression 'may refer the case back to the adjudicating authority with such directions' have been omitted. As such the question which arises is that with the specific taking away of the remand powers of the Commissioner (Appeals) whether he can still remand the matter to the lower authorities, when he finds it difficult to decide the matter on merits at his level. The amended provisions of Section 35A(3) required the appellate authority to confirm, modify or annul the decision appealed against. First of all it is to be noticed that there is no debarring clause in the said section against remanding powers to be excersised by the appellate authority. Further it is noticed that the appellate authority has powers to either confirm, to modify or to annul the decision of the lower authorities. When the order of the lower authorities is set aside and the matter is remanded to him, does it not amount to annulling the appealed-against order ?
6. The Hon'ble Andhra Pradesh High Court in the case of Thimmasamudram Tobacco Co. v. ACCE - AIR 61(Andhra Pradesh) 324 while interpreting the erstwhile Section 35 of the Central Excise Act held that the power of remand is inherent in the appellate jurisdiction conferred on an appellate authority. The absence of such a specific provision in Section 35, which speaks only of the appellate authority passing such order as he thinks fit, confirming, altering or annulling the decision appealed against, does not disable the appellate authority from sending the matter back to the authority that passed the order for fresh adjudication. While holding so, the Hon'ble Andhra Pradesh High Court followed the earlier decision of the Andhra Pradesh High Court reported in 1958 ANDH - LT - 627 - Narsingha State Transport Authority. It is seen that erstwhile Section 35 of the Central Excise Act was also to the effect that the Central Govt. authority or the Central Excise officer, to whom the appeal was filed - ".....and pass such order as he deems fit, confirming, altering or annulling the decision or order appealed against". While interpreting the above provisions, the Hon'ble High Court in Para 9 of their judgment observed as under :-
"9. It is true that the section speaks only of the appellate authority passing such order as he thinks fit, confirming, altering or annulling the decision or order appealed against and there is no specific provision enabling the appellate authority to remit the matter to the original authority for making an inquiry afresh. We do not think that the absence of such provision disables the appellate authority from sending the matter back to the officer that passed the order.
The conferment of the appellate jurisdiction on a Tribunal, in our opinion, necessarily implies that it has as much power to remand as it has to confirm, alter or annul and incidentally it has the power to hear the appeal. Without such power it is difficult for the appellate authority to dispose of an appeal satisfactorily. If the appellate authority finds that the procedure prescribed by a provision of law has been violated by an officer he has either to allow the appeal without directing any fresh inquiry or dismiss the appeal, if the argument of the appellant's Counsel were to prevail and this cannot be regarded as a satisfactory state of affairs. We, therefore, feel that the power of remand is inherent in the appellate jurisdiction conferred on an appellate authority."
A reading of the above para leads to inevitable conclusion that even in the absence of specific powers to remand the matter and there being no debarring clause, appellate authority is vested with the inherent powers to refer the matter back to the original adjudicating authority for the purposes of causing fresh verification.
7. The above view is further fortified by the Hon'ble Supreme Court's decision in the case of UOI v. Umesh Dhaimode - 1998 (98) E.L.T. 584 (S.C.). While interpreting the provisions of erstwhile Section 128(2) of the Customs Act, 1962, the Hon'ble Supreme Court observed that an order of remand necessarily annuls the decision and as such the power to annul read with power to pass such order as the appellate authority may deem fit includes the power to remand the matter for fresh decision. For better appreciation Para 2 of the said judgment is reproduced below :-
"2. As the order under appeal itself notes, the aforesaid provision vested the appellate authority with powers to pass such order as it deemed fit confirming, modifying or annulling the decision appealed against. An order of remand necessarily annuls the decision which is under appeal before the appellate authority. The appellate authority is also invested with the power to pass such order as it deems fit. Both these portions of the aforesaid provision, read together, necessarily imply that the appellate authority has the power to set aside the decision which is under appeal before it and to remand the matter to the authority below for fresh decision."
8. Under the amended provisions of Section 35A(3), the Commissioner (Appeals) has been given the power to pass such orders as he thinks fit by annulling the decision appealed against. By remanding the matter, the order appealed against is set aside which amounts to nothing but annulling the same. As such, restricted interpretation to the said provision cannot be given in view of the above decision of the Hon'ble Supreme Court and it has to be held that the power to remand the matter is inherent in the appellate authority while exercising the jurisdiction conferred upon him under the said amended section.
9. In view of the foregoing, I hold that if the facts and circumstances of the case require, the Commissioner (Appeals) has the powers to remand the matter to the lower authorities for fresh decision on the disputed issues. The impugned order doing so is upheld and the Revenue's appeal is rejected.