1. This case was referred to this Bench of three Members in , view of the doubt expressed by the members of the East Regional bench which heard this matter. The doubt was with reference to the correctness of the decision by a two Member Bench of the North Regional Bench in the case of Sudesh Rattan mahajan v. Collector of Customs and Central Excise [1983 ELT 2517], cited by the revenue who argued that Central Government alone has jurisdiction to hear the appeals. In that judgment the provision to be construed was Section 131B (2) of the Customs Act (corresponding to Section 35P of the Central Excises and Salt Act).
"Every proceeding which is pending immediately before the appointed day before the Central Government under Section 131, as it stood immediately before that day, and any matter arising out of or connected with such proceeding and, which is so pending shall stand transferred on that day to the Appellate Tribunal and the Appellate Tribunal may proceed with such proceeding or matter from the stage at which it was on that day as if such proceeding or matter were an appeal filed before it : Provided that if any such proceeding or matter relates to an order where, - (a) the value of the goods confiscated without option having been given to the owner of the goods to pay a fine in lieu of confiscation under Section 125; or (b) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of Customs or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or (c) the amount of fine or penalty determined by such order, does not exceed ten thousand rupees, such proceeding or matter shall continue to be dealt with the Central Government as if the said Section 131 had not been Substituted : Provided further that the applicant or the other party may moke a demand to the Appellate Tribunal that before proceeding further with that proceeding or matter, he may be re-heard." The Bench held that the word "or" occurring in the proviso in the said Section was to be read disjunctively and that the jurisdiction of the Central Government to dispose of the matter continued if either the value of the goods confiscated absolutely or the difference of duty involved or duty involved or the amount of fine or penalty was less than Rs. 10,000/-, rejecting the contention that if any one of the said amounts or even the total of two or more of the said amounts exceeded Rs. 10,000/-, the jurisdiction of the Central Government was ousted and the matter was to be transferred to the Tribunal.
3. When the present appeal came up before the East Regional Bench, the Members felt that the above said judgment requires reconsideration, On papers thereupon being Submitted to the President for constitution of a Bench of more than two Members, this Bench has been constituted for hearing these three appeals.
4. We have heard Shri K.B. Chakraborti,-Advocate for the appellants and Shri M.C. Thakur for the Department.
5. Penalty had been imposed on only one of the appellants for more than Rs. 5,000/-. The total value of the goods confiscated in these three cases is Rs. 1,42,000/-, the value in each of the individual cases being more than Rs. 10,000/-. If the decision in Sudesh Rattan Mahajan s case is to be followed, the revision petition of Shri Daya Lal Shah will have to be retained and disposed of by the Central Government since the penalty imposed therein is less than Rs. 1.0,000/- though the value of the goods confiscated is more than Rs. 10,000/-. The contention of the learned counsel for the appellants is that even in the case of Shri Daya Lal Shah transfer of the case by the Government to the Tribunal was proper. His contention is that the provisions of Section 131B (2) of the Customs Act are to be so read that when the amount mentioned in any of the three instances in the proviso exceeds Rs. 10,000/- a transfer from the Government to the Tribunal is indicated, though the other amounts mentioned in the proviso may be less than Rs. 10,000/-. Shri Thakur contends to the contrary and relies upon the reasonings in the Sudesh Rattan Mahajan's case in support thereof.
6. The argument of Shri Chakraborti is that the intention of the legislature in enacting Section 131'B" of the Customs Act was that the cases pending with the Government and which involve high stakes are to be transferred for' disposal by the Tribunal but that cases where stakes are not high may be retained and disposed of by the Government without a transfer. According to him, this object would be frustrated if the word "or" in the proviso to Section 131B (2) is to be construed as a disjunctive as was done in the Sudesh Rattan Mahajan's case.
Therefore, in effect, he also concedes that if the word "or" is read in the normal grammatical sence, the result would be as was held in Sudesh Rattan Mahajan's case. But, according to him, such a construction would lead to an absurdity when viewed in the background of the object of the legislation and, therefore, the word "or" should be read as "and".
According to him, we should start reading each part of the proviso and its applicability to the facts of the case, and once any particular proviso is satisfied action is to be taken in accordance therewith without proceeding to consider the remaining parts of the proviso. On the other hand, Shri Thakur contends that the normal rule of interpretation is that the plain grammatical meaning is to be ascribed to any word found in the statute and that the applicability of this rule does not- lead to any absurdity in the present instance and that such an interpretation would not make the provision nugatory also.
7. As earlier mentioned, the entire argument of Shri Chakraborti is based on the premise that the legislature intended that cases, which involve large stakes should be transferred to the Tribunal, leaving with the Government cases with smaller stakes only. We are not able to appreciate this argument since we find no basis for such an assumption as to the alleged intention of the legislature. Therefore, in the absence of that premise, the further argument would not be valid.
8. In any event, the normal rule of interpretation is that if the words in a statute are clear and unambiguous they must be given the normal meaning only in interpreting the provision. The only exception is that if such an interpretation would lead to any absurdity, or would render the provision nugatory, such a literal interpretation should be given up and the words should be construed in such a manner as would advance the object of the legislature or would make the provision workable. We may note that this argument was in fact advanced before the Bench which heard the Sudesh Rattan Mahajan's case and the same was considered fully in paragraphs 9, 10 and 11 of the said judgment. As observed therein, no manifest absurdity would result by giving the word "or" its normal meaning, nor would it frustrate the object of the enactment. In paragraph 11 of the said judgment instances have been considered which would, on the other hand, lead to absurd results, if the word "or" is to be read as "and" in construing the provisions of Section 131B.9. Shri Thakur further referred to two decisions of the Supreme Court in support of his argument. They are Kamta Prasad v. Executive Officer, BallabgarhMunicipal Corporation of Delhi v. Tak Chand [AIR 1980 SC 360]. In these two decisions the Supreme Court had to consider the use of the word "or" in the respective statutes concerned in the said cases. The Supreme Court had held that the word was disjunctive and not conjunctive.
10. For the reasons stated earlier, we are satisfied that the conclusion in the Sudesh Rattan Mahajan's case was proper and the said decision does not require any reconsideration. We have now, therefore, to consider the effect of the interpretation in that decision on the facts of the appeals before us. We have to decide whether the appeal relating to Shri Daya Lal Shah (in which alone penalty had been levied, which penalty was less than Rs. 10,000/-, no penalty having been levied on the appellants in the other two appeals) is to be retransferred to the Central Government or whether all three appeals require such retransfer.
11. For determination of this question, we have to look into the words of Section 131B (2) and the proviso thereto. Under the main provision, every proceeding which was pending with the Central Government immediately before the appointed date, as also any matter arising out of or connected with such proceeding, shall have to be transferred to the Tribunal. The proviso lays down that where any such proceeding or matter relates to an order, the value of the goods or the difference in duty involved or duty involved or the amount of fine or penalty determined by such order does not exceed Rs. 10,000/- the Government shall continue to retain jurisdiction. Thus, the proviso is to the effect that where in respect of an order any of the above amounts determined by such order is less than Rs. 10,000/-, the proceeding or matter arising out of such order and pending with the Central Government shall continue with the Central Government for further disposal. Therefore, what would be relevant with reference to Sub-clauses (a), (b) and (c) of the proviso is whether the order with reference to which the proceedings arose, resulted in imposition of penalty or demand of duty or confiscation or fine, any one of these amounts not exceeding Rs. 10,000/-. That is to say all proceedings relating to such an order, whether the said order gave rise to one revision or more, would have to be dealt-with./ in the manner provided in the proviso. In the present instance, penalty levied under the order was less than' Rs. 10,000/-. Therefore, though three revision petitions may have been filed arising out of the said order, all of them will have to be dealt with in the manner mentioned in the proviso (i.e.) the Central Government will retain jurisdiction to deal with all the three Revision Petitions even after the Tribunal has been formed.
12. In the result, we direct that the papers in all these three appeals be returned to the Central Government who alone will have jurisdiction to deal with the matter, in the light of what has been stated above.
13. This matter firstly came up for consideration before East Regional Bench. By order dated 7-3-1986, the East Regional Bench doubted the correctness of the ratio of the decision in the case of Sudesh Rattan Mahajan v. Collector of Customs and Central Excise [1983 ELT 2517] and, therefore, decided to refer the matter to the Hon'ble President for placing it before a larger Bench. A larger Bench was, accordingly, constituted consisting of three Members, of which I happened to be one of them, and the matter was heard in detail.
14. I have the advantage of going through the order proposed by my two learned brothers, namely, Shri I.J. Rao, Member (Technical) and Shri V.T. Raghavachari, Member (Judicial). I have given very anxious consideration to the principle of law enunciated by them and their interpretation of decision of the above mentioned case. I however very much regret my inability to agree to the same for the reasons mentioned below.
15. It is well known that the interpretation of a particular ruling or decision has to depend on the facts and circumstances of that particular case in which that decision is given. It need not be mentioned that the facts and circumstances of each case are generally different and, therefore, before applying the ratio of decision of one case to another case, care has to be taken to ensure that the facts and circumstances of both the cases are the same or atleast similar. In this connection it may be mentioned that if there is any observation in a ruling or a decision which is not warranted by the facts and circumstances of the particular case, the same is known as obiter dicta, and properly speaking it cannot be said to be the finding of the Court and binding on any authority. Therefore, in order to properly interpret a particular decision care has to be taken to f ind out whether any observation by the learned Court is obiter dicta or not.
The determination of this question, however, will take me to the examination of the facts of the case in the above mentioned case of Sudesh Rattan Mahajan.
16. In that case the Deputy Collector of Central Excise, Chandigarh by his order dated 31st May, 1977, simply directed confiscation of the scooter seized as having been used as a conveyance Subject to redemption on payment of a fine of Rs. 1,000/-. He, however, did not levy any penalty on the appellant. The learned Collector of Customs and Central Excise, Chandigarh, while purporting to act under Section 130 (old) of the Customs Act, 1962, initiated a review of the aforesaid order and imposed a penalty of Rs. 10,000/- on the appellant while upholding; the order of confiscation of the scooter Subject to redemption on payment of a fine of Rs. 1,000/-. From this, in short, it would appear that the penalty of Rs. 10,000/- and a fine of Rs. 1,000/- was imposed on the appellant, and the question that arose before the North Regional Bench, New Delhi, in the above mentioned case was whether since the total amount came to Rs. 11,000/- the appeal should be heard and disposed of by it or should be sent to the Central Government as per Section 131B of the Customs Act. It is interesting to note here that in Section 131B (2) first proviso, there are at least three clauses, all connected with "or". In the case of Sudesh Rattan Mahajan, only Clause (c) was attracted which provided that if the amount of fine or penalty determined by such order does not exceed Rs. 10,000/- such proceedings or matter shall continue to be dealt with by the Central Government as if the said Section 131 had not been Substituted. This will mean that the matter for consideration before the learned NRB, of the Tribunal was only with respect to Clause (c) and its proper interpretation inasmuch as the word "or" between the words "fine" and "penalty" was conjunctive or disjunctive. The learned NRB held that the word "or" used in Clause (c) was disjunctive and decided accordingly as mentioned above.
16. The learned NRB however did not confine itself to giving a finding on the matter placed before it or the points involved in that appeal.
As pointed out earlier, the only point involved in that appeal was the correct interpretation of the word 'or' in Sub-clause (c) of the 1st proviso to Section 131B (2). A reading of this decision shows that the learned Members did not confine themselves to the interpretation of only Sub-clause (c) as mentioned above. In para Nos. 10 and 11 of this order they have gone to the extent of interpreting the word 'or' between Sub-clauses (a) (b) and (c). Proceeding to interpret the meaning of the word "or" occuring between these clauses the learned Members of the NRB held that there also the expression "or" was disjunctive and not conjunctive as in the case of the word "or" used between "fine" and "penalty" in Sub-clause (c). I can do no better than to quote the concluding portion of para 10 in this connection. It runs as follows : "We see no reason, therefore, to Substitute the word "and" for "or" either between Sub-sections (a) and (b) or (b) and (c) or (c) itself with a view to restrict such jurisdiction and to enlarge that of the Tribunal beyond what was plainly intended." 18. Similarly, in the beginning of para 11 it has been observed as follows : "If perchance we are to read "and" in the places where 'or' occurs in the proviso to Section 131B it would mean and imply that the conditions in all the Sub-clauses (a), (b) and (c) will have to be cumulatively fulfilled before the Central Government can exercise any jurisdiction in the proceedings pending before it on the appropriate date ..." 19. After taking all these into consideration the learned Members of the NRB came to the conclusion that in these Sub-clauses the word "and" cannot be Substituted for the word "or". They gave a similar finding with respect to word "or" in Sub-clause (c) and accordingly held that the jurisdiction to hear this matter still vests with the Central Government and not with the Tribunal.
20. With due respect to the learned Members of the NRB giving their decision in the above mentioned case I would like to point out that the interpretation of the word "or" occuring between Sub-clauses (a), (b) and (c) by them was not warranted under the facts and circumstances of that case. As a matter of fact, as stated above, the learned Members of the NRB were simply called upon to interpret the word "or" occuring between "fine" and "penalty" in Sub-clause (c). Therefore, there was no occasion for them to interpret the word "or" occuring between Sub-clauses (a), (b) and (c) of first proviso of Section 131B (2). In this view of the matter with due respect, I have to mention that I am left with no alternative than to hold that the observations of the learned Members of the NRB with respect to the interpretation of the word 'or' occuring in Sub-clauses (a), (b) and (c) and at best be said to be obiter dicta. Therefore, the same cannot be said to be the finding of the NRB in that appeal and, therefore, not binding on anybody.
21. In this connection a reference may be made to para 6 of the proposed order. In this paragraph the argument of Shri Chakraborti, learned advocate, appearing on behalf of the appellant was stated to be that the legislature while introducing Section 131B in the Customs Act intended that the cases which involved large stakes should be transferred to the Tribunal leaving with the Government cases with a smaller stakes only. Shri V.T. Raghavachari, the learned brother, who proposed this order and with whom brother Shri I.J.- Rao agreed, repelled this contention of the learned advocate on the ground that they were unable to find any basis for such an assumption as to the alleged intention of the legislature.
22. It may be mentioned here that Section 131B was introduced in the Customs Act by Finance (No. 2) Act, 1980.. It was by this very Act that the present Appellate Tribunal has also been constituted. The question is what was the consideration with the Central Government for introducing these changes by Finance (No. 2) Act, 1980? It may be mentioned here that by this amendment the Appellate Tribunal was constituted by associating Judicial Members with the same in order to ensure that the cases of the persons concerned may not be left entirely into the hands of the officers belonging to the department." At the stage of the Appellate Tribunal by associating Judicial Members, an attempt was made to ensure that the cases should be decided strictly according to law and would be interpreted also properly. It was expected that this Tribunal being quasi-judicial in nature will conform to established judicial procedure. In the long run it was calculated to inspire confidence in the minds of the public in regard to the decisions which it records. It was in this background that these amendments were brought about.
23. So far as the legislative intent in introducing Section 131B is concerned, there is a clear mention in it that when the amount does not exceed Rs. 10,000/-, such proceedings or matter shall continue to be dealt with by the Central Government as if the said Section 131 has not been Substituted. It was further provided that where the amount involved was more than Rs. 10,000/- the matter has to be transferred to the Appellate Tribunal for decision. The question is : why the proceedings and matters in which the amount involved was less than Rs. 10,000/- was left with the Central Government while others were transferred to the Appellate Tribunal? Under these circumstances there can be only one answer to this question that the Government thought that the proceedings or matters (involving less than Rs. 10,000/-) was to be left with the Central Government, whereas the proceedings or matter involving more than Rs. 10,000/-was to be transferred to the Appellate Tribunal. In this background can there be any manner of doubt in the contention of the learned advocate that the legislative intention was to transfer serious cases of higher valuation to the Appellate Tribunal while leaving the' Central Government with only those proceedings or matter which were valued at Rs. 10,000/-or less? The answer to this question could be quite simple that under these circumstances the legislative intent was quite clear. The legislature by making this provision clearly intended that while smaller cases (whose valuation was Rs. 10,000/- or less) could be left with the Central Government those cases whose valuation was more than this (no upper ceiling was fixed) should be transferred to the Appellate Tribunal. Under this circumstance with great respect and in all humility I would like to mention that the findings of the learned Members in para 6 of the proposed order do not appear to me to be warranted by law.
24. In this .background I will next proceed to interpret the various provisions of Section 131B. It is well established principle of interpretation of the statute that the interpretation which gives a harmonious construction of the statute has to be accepted. While interpreting the statute all attempts should be made to see that the interpretation does not lead to absurd results or anomalous situation.
So the rule of harmonious construction of the statute has to be followed to avoid absurd results.
25. So far as Section 131B is concerned, the second proviso consists of three Sub-clauses. In terms of these Sub-clauses the proceedings pending before the Central Government which relates to an order where : such proceedings or matter shall continue to be dealt with by the Central Government as if Section 131, as it stood before the appointed date, was never Substituted. Under these circumstances there may be a case where there may be absolute confiscation of goods worth more than Rs. 10 lakhs but no fine or penalty is imposed, can it be the intention of the legislature that such cases are still to be left with the Central Government since no fine or penalty is involved? Similarly, there may be a case in which the duty involved may be Rs. 10 lakhs or above, but no absolute confiscation or fine or penalty is involved, can it be said that in a situation like this the intention of the legislature was that such a case could still continue to be with the Central Government since no amount of fine or penalty has been imposed.
Similarly, there may be a case when an amount of fine of Rs. 11,000/- is involved without any absolute confiscation or duty or penalty.
Alternatively, there may be a case in which a penalty or more than Rs. 10,000/- is involved without any absolute confiscation or duty or fine.
Under the above mentioned situation can it be said that it was the legislative intention that while the cases involving confiscation of goods worth more than Rs. 10 lakhs or the duty imposed worth more than Rs. 10 lakhs may still be left with the Central Government simply because there is no amount of fine or penalty, the cases in which only fine or penalty involved is more than Rs. 10,000/- should be transferred to the Appellate Tribunal on that account? This will result in great anomaly and to some extent to absurdity. If really it was the intention of the legislature to transfer difficult cases of higher valuation to the Appellants Tribunal while leaving cases of lower valuation (Rs. 10,000/- or below) with the Central Government will it not amount to abnormality and distor -tion of legislative intent. In para No. 9 of the decision in Sudesh Rattan Mahajan's case it has been observed that there is no manifest absurdity either in the provision itself or with other provisions of the Act if we do not read "and" for "or". With due respect I may say that some absurd result may follow if this is not done.
26. Under these circumstances what would be the harmonious construction of Section 131B? In my opinion, the harmonious construction could result if we proceed in sequence from Clause (a) to Clause (b) to Clause (c) and to read the word "or" as if it meant and/or between these clauses and also to extend the same interpretation in harmony with the legislative intent. Thus, for, instance if it is observed that by virtue of Clause (a) the jurisdiction will stand transferred to the Tribunal (since the value of the goods confiscated is more than Rs. 10,000/-) it may not be necessary to proceed with other clauses. If, however, the value of the goods confiscated is less than Rs. 10,000/-, then we may proceed to find out the amount of duty involved as per Sub-clause (b). If under this Sub-clause we find that the amount of duty involved is more than Rs. 10,000/- then we may stop there and need not proceed further. If however, the amount of duty involved is less than Rs. 10,000/- we may proceed to Sub-clause (c) to find out whether either the fine or penalty involved was more than Rs. 10,000/- or not.
Here also if the amount of fine or penalty involved is more than Rs. 10,000/- the jurisdiction to hear the case is to vest with the Appellate Tribunal. In my view, under the given situation this would be the most reasonable interpretation of Section 13IB of the Customs Act, in harmony with the legislative intent.
27. In the above view of the matter, since the value of the goods confiscated absolutely is Rs. 1,42,000/- approximately, I hold that in terms of Sub-clause (a) to the second proviso to Section 131B, the jurisdiction to hear and decide these appeals vests with the Appellate Tribunal. These appeals therefore need not be transferred from the Tribunal. Dated, 24th July, 1986.
Sd/- B. PRASAD) In view of the majority decision of this Bench it is ordered that the papers in all these three appeals be returned back to the Central Government who alone will have jurisdiction to deal with the matter.
It is Submitted that minority decision of Shri B. Prasad, Member 0) seems to be more appropriate and rational. Sub-section (2) of Section 131B provides for transfer of 'every proceeding' pending with the Central Government on the appointed day to the Appellate Tribunal.
However, the proviso to said Sub-section (2) which is now the centre of controversy carves our exception to such transfer in certain circumstances. According to this proviso if the amount involved in a pending proceeding is less than rupees ten thousand in relation to, confiscation of goods (Clause a); duty involved (Clause b) fine or penalty (Clause c) the matter shall continue to be dealt with the Central Government. Because of the use of word 'or' between Clauses (a), (b) and (c) of the proviso as soon as amount involved exceed Rs. 10,000/- in relation to any of the Clauses (a), (b) or (c), the matter will fall outside the exclusion as carved out by the proviso and such a matter will have to be transferred to the Appellate Tribunal as being falling within the mischief of said main Sub-section (2), otherwise the word 'every proceeding' as used in the said Sub-section (2) will lose its significance. Though in the majority decision a correct view has been taken that Clauses (a), (b) and (c) of the proviso to Section 131B (2) are independent of each other because of the use of word 'or' yet with due respect the majority view failed to take notice that the proviso which was under consideration was not an independent one but was meant to carved out an exception to the main Sub-section (2) and therefore, cannot be read in isolation.
It will not be out of place to refer to the provisions of the second proviso to Section 129A (1) of the Customs Act which are pre-materia to the proviso to Section 131B (2). If the interpretation put forth by the majority view is applied to the provisions of Section 129A (1), then almost in all Regional Bench cases the right of appeal will be Subject to the discretion of the Appellate Tribunal to refuse to admit an appeal. The very fact that such a practice is not being followed is also suggestive that the minority view taken in this case is being practically followed.
If the intentions of the Government had been as interpreted by the majority decision then instead of word 'or' the word 'and' would have been used between Clauses (a), (b) and (c) so as to make it incumbent to fulfil the requirements of all the three Clauses to fall within the exclusion as carved out by the proviso to Section 131B (2).
The Calcutta High Court in the case of R.K. Chemicals v. Superintendent Central Excise [1984 (15) E.L.T. 411] while interpreting the effect of different clauses contained in exclusion provisions has taken the view that such clauses are independent of each other. This decision has now been confirmed on appea) in 1987 (30) E.L.T. 641A (Tribunal).
There is another aspect of the matter. The Tribunal decision on Sudesh Rattan Mahajan [1983 ELT 2517] was a decision by North Regional Bench consisting of two members. Subsequently, this decision was doubted by East Regional Bench consisting of another two members in the present appeal. Consequently, the matter was referred to the Present Bench of three members in which one member has recorded a dissent with the result that the Sudesh Rattan Mahajan's case has been endorsed only by two members. Now a peculiar situation has arisen wherein the two members expressing their doubts as to the correctness of the said decision have been over-ruled by another set of two members. It is now incumbent either to reconsider the decision in this case and in the case of Sudesh Rattan Mahajan v. Collector [1983 ELT 2517] or to enforce the second proviso to Section 129A (1) of the Customs Act, 1962, by putting all Regional Bench appeals falling within the mischief of the said second proviso to an admission stage.