Judgment:
1. Pankaj Steel Corporation, proprietary concern of one Smt. Usha B.Agarwal, is the appellant in this appeal. It is trading in waste and scrap of iron and steel. In November, 1999, the appellant purchased in public auction about 860 MTs of waste and scrap valued at about Rs. 60 lakhs from the Oil & Natural Gas Corporation Ltd. (ONGC, for short).
After the sale of the waste and scrap to the appellant, ONGC by letter dated 24-11-99 amended the release order incorporating therein clauses relating to payment of excise duty on the scrap. ONGC insisted that the appellant should fulfil all the conditions before taking delivery of the material. The appellant took the stand that no excise duty was leviable on the waste and scrap, whereupon ONGC directed the appellant to execute a bond to indemnify them against any demand of excise duty that might be raised by the department. A bank guarantee for Rs. 8 lakhs was accordingly furnished by the appellant in favour of ONGC and the same was amended from time to time to increase the amount which ultimately stood at Rs. 8,44,500/-.
2. The Department by show cause notice dated 23-5-2000 raised a demand of duty on ONGC in respect of the above goods sold to the appellant.
The Additional Commissioner of Central Excise, who adjudicated the show cause notice, confirmed the demand against ONGC and also imposed on them a penalty. Aggrieved by the decision of the Additional Commissioner, ONGC filed appeal with the Commissioner (Appeals). That appeal was rejected. ONGC did not choose to file any appeal against the order of the Commissioner (Appeals). They, however, proceeded to encash the bank guarantee executed by the appellant. In the present appeal before us, the appellant is challenging the order of the Commissioner (Appeals).
3. We have heard both sides on the preliminary issue i.e. whether the appellant had locus standi to file this appeal. On this issue, the Counsel for the appellant has argued that as the order of the Commissioner (Appeals) has not been appealed against by ONGC and has the effect of casting on the appellant the ultimate burden of duty in respect of the subject goods, the latter is a 'person aggrieved' within the meaning of Section 35B of the Central Excise Act so as to challenge the said order. Counsel has heavily relied on the Supreme Court's decision in I.D.L. Chemicals Ltd. v. Union of India [1996 (86) E.L.T.182 (S.C)] to substantiate his point. He has also quoted from the Supreme Court's judgment in Assistant General Manager, Central Bank of India v. Commissioner, Municipal Corporation for the City of Ahmedabad and Ors. [(1995) 4 SCC 696], which is one of the judgments referred to in I.D.L, Chemicals (supra). Counsel has also relied on the Madras High Court's decision in Tamil Nadu Newsprint & Papers Ltd. v. Union of India [1993 (66) E.L.T. 562 (Mad.)].
4. The SDR has hotly contested the plea that the appellant is an 'aggrieved person' under Section 35B of the Central Excise Act. No show cause notice was issued to the appellant by the department for any purpose whatsoever, nor was any order passed against the appellant by the original authority or the first appellate authority. The order of the Commissioner (Appeals), passed against ONGC, has not burdened the appellant with any duty, penalty or other liability. In the circumstances, there could not be any grievance for the appellant against the department. If, at all, the appellant has any grievance, it is against ONGC, for which the appellant has no remedy under Section 35B of the Central Excise Act. In support of these arguments, the SDR has relied on the following decisions :-Rohit Pulp & Paper Mills v. CCE, Bombay [2000 (120) E.L.T. 566 (Trib.)]Satellite Engg. Ltd. v. CCE, Bangalore [2001 (130) E.L.T. 684 (Trib.)]Jaiswal Engg. Works Pvt. Ltd. v. CCE, Pune [2003 (159) E.L.T. 928 (Tribunal) = 2003 (58) RLT 239 (CESTAT)] Referring to the case law cited by the Counsel the DR has submitted that in those cases, the Apex Court was considering the wider concept of locus standi under Articles 32 and 226 of the Constitution of India.
That concept cannot be imported into the realm of statutory appeals.
The DR has sought to buttress this point by relying on the Hon'ble Supreme Court's decision in Northern Plastics Ltd. v. Hindustan Photo Films Mfg. Co. Ltd. 5. Admittedly, the department did not issue any show cause notice to the appellant. A show cause notice was issued to ONGC to recover Central Excise duty from them on the goods which they had sold to the appellant without payment of duty and also to penalize them for evasion of duty. The original authority confirmed the demand of duty against ONGC and imposed a penalty on them. The first appellate authority upheld the decision of the original authority in an appeal preferred by ONGC. It is the order of the first appellate authority that has been challenged before the Tribunal by the appellant. The respondent in this appeal is the Commissioner of Central Excise who represents the Department. The appellant has no case that it has any grievance against the department which has not burdened the appellant with duty, penalty or any other liability in relation to the goods under the Central Excise Act. Had the department burdened it with any such liability, the appellant would have been a party to the adjudication proceedings. The appellant was, admittedly, not party to the proceedings. The appellant, therefore, cannot be a 'person aggrieved' under Section 35B of the Central Excise Act. It was held by this Tribunal long ago in the case of Hindustan Photo Films (supra) that an appeal filed by a third party was not maintainable under Section 129A of the Customs Act. The provisions of Section 35B of the Central Excise Act being pari materia with those of Section 129A of the Customs Act, the ratio of the decision in Hindustan Photo Films is equally applicable to an appeal filed under Section 35B of the Central Excise Act by a person who was not a party to the adjudication proceedings. In the case of Northern Plastics (supra), the Hon'ble Supreme Court dealt with the meaning of 'person aggrieved' under Section 129A of the Customs Act. After examining the scheme of appellate remedies under the Customs Act, the Court held that only parties to adjudication proceedings could prefer appeal to the Tribunal under Section 129A of the Act. The Court, however, observed that a third party might perhaps be treated to be legally aggrieved by the order of adjudication and might legitimately prefer an appeal to the Tribunal as a 'person aggrieved' if it was shown that he was interested in the subject goods and any order of release of the goods to the party to the proceedings was prone to create a legal injury to him. The Court clarified that, in order to earn a locus standi under Section 129A as 'aggrieved person' other than the party arraigned before the adjudicating authority, it must be shown by the person claiming to be 'aggrieved' that he, being a third party, had a direct legal interest in the goods involved in the adjudication process. After carefully considering the facts of the instant case, we find that the appellant had no direct legal interest in the goods (scrap) at the relevant stage. The adjudication was on the question whether ONGC was liable to pay Central Excise duty on the goods under the Act at the time of its clearance. The appellant had acquired no legal interest in the goods at that stage. Its interest, if any, was only contractual by reason of its agreement with ONGC. Hence the appellant cannot be considered to be covered by the exception laid down by the Apex Court in the case of Northern Plastics (supra). As the appellant was, admittedly, a third party to the adjudication proceedings as also to the first appellate proceedings, it was not a 'person aggrieved' within the meaning of Section 35B of the Central Excise Act as per the ruling in Northern Plastics.
6. The Apex Court's ruling has been followed by this Tribunal in the cases of Rohit Pulp & Paper Mills (supra) and Jaiswal Engg. Works (supra). In Rohit Pulp and Paper Mills, an appeal was filed with the Collector (Appeals) by M/s. Rohit Pulp & Paper Mills Ltd. under Section 35 of the Central Excise Act against an order of the original authority rejecting the refund claim of another party viz. M/s. Penwalt India Ltd. The appellants were not a party to the proceedings before the original authority. It was held that the appellants were not an 'aggrieved person' within the meaning of Section 35 to file appeal before the Collector (Appeals). In the case of Jaiswal Engg. Works (supra), the department had issued a show cause notice to M/s. TELCO Ltd. for denying them Modvat credit on certain inputs supplied by the appellants, M/s. Jaiswal Engineering Works (P) Ltd. TELCO contested the demand. The adjudicating authority confirmed the demand on the ground that no duty had been paid on the inputs. It was M/s. Jaiswal Engg.
Works (P) Ltd. who approached this Tribunal against the order of the Commissioner (Appeals). The Tribunal held, by relying on the Supreme Court's ruling in Northern Plastics, that M/s. Jaiswal Engg. Works (P) Ltd. were not 'persons aggrieved' and hence had no right to file appeal against the decision taken by the adjudicating authority against TELCO.A similar view was taken by the Tribunal with reference to Section 129A of the Customs Act in the case of Hindustan Photo Films. In the case of Cyma Industries (supra), it was held by the Tribunal that any person other than the one who paid duty had no locus standi to claim refund of the duty under Section 11B of the Central Excise Act.
7. The Counsel has heavily relied on the Supreme Court's judgment in Assistant General Manager, Central Bank of India and Ors. v.Commissioner, Municipal Corporation for the City of Ahmedabad and Ors.
(supra) in which it was held that a tenant had the right to appeal under the Bombay Provincial Municipal Corporations Act, 1949 against property tax assessment order passed against the landlord. In the said case, the Apex Court considered the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 [for short, Bombay Rent Act] as well as the Municipal Corporations Act. Section 10 of the Bombay Rent Act empowered the landlord to pass on the burden of increase in property tax to the tenant. Section 140 of the Municipal Corporations Act made the tenant liable to pay property tax in case the landlord failed to pay the same. In the particular case, there was also an agreement between the landlord and the tenant whereunder the obligation to discharge property tax liability was placed on the tenant. Having regard to the statutory and contractual provisions, the Apex Court held that it would be grossly unjust to deny to the tenant the right of appeal against the assessment order passed by the Municipal authorities against the landlord. The Court was acting under Article 136 of the Constitution of India. The considerations which entered into the decision of the Apex Court do not exist in the instant case, nor do we have such overriding powers as the Apex Court has under Article 136 of the Constitution of India to grant equitable reliefs.
Here, we are only concerned with the appellate remedy under the Central Excise Act and are bound by the ratio of the Supreme Court's decision in Northern Plastics, which is squarely on the point.
8. In I.D.L Chemicals (supra), the Supreme Court was considering the question whether the appellants had locus standi to file Writ Petition in the High Court against an order of demand of duty raised on Steel Authority of India Ltd. (buyer of goods manufactured and supplied by the appellants). The Apex Court held that the appellants were entitled to invoke the writ jurisdiction of the High Court. The scope of locus standi under Article 226 of the Constitution of India is much wider than that under statutory provisions. It has been held so by the Hon'ble Supreme Court in the case of Northern Plastics (supra) itself.
The relevant part of the judgment in Northern Plastics is extracted below :- "It has also to be noted that the wider concept of locus standi in public interest litigation moved before this Court under Article 32 of the Constitution of India which itself is a fundamental right or under Article 226 before High Courts which also offers a constitutional remedy cannot be imported for deciding the right of appeal under the statutory provisions contained in the Customs Act.
Whether any right of appeal is conferred on anyone against the orders passed under the Act in the hierarchy of proceedings before the authorities has to be judged from the statutory settings of the Act and not de hors them. Therefore, in our view, the High Court in the impugned judgment had erred in drawing the analogy from the more elastic concept of locus standi under Article 32 or Article 226 evolved by the Court by its decisions on the subject." In the light of the above ruling, we find that it will be wrong to apply the ratio of I.D.L. Chemicals to the instant case. For the same reason, we are unable to follow the Madras High Court's decision in Tamil Nadu Newsprint & Papers (supra) wherein a Writ Petition filed by M/s. Tamil Nadu Newsprint and Papers Ltd. against an order passed by the Collector (Appeals) against the manufacturer of the goods was held to be maintainable.
9. For the reasons already recorded, we hold that the appellant has no locus standi to file appeal under Section 35B of the Central Excise Act against the order passed by the Commissioner (Appeals) against ONGC.Accordingly, the appeal is dismissed.