Judgment:
1. This is an application under Section 35C of the Central Fxcises & Salt Act, 1944, the Act for short seeking rectification of the order of the Tribunal dated 3-6-1994 on grounds of apparent mistake.
2. Shri Shankar Raman, the learned Counsel, submitted that the Tribunal did not admit the petitioners appeal and rejected the same in terms of second proviso to Section 35B(1) of the Act on the ground that the amount involved in the appeal was Rs. 24,073.75. The learned Counsel contended that the appeal was against the impugned order of the Collector of Central Excise (Appeals), Hyderabad, and the appeal was filed on 30-11-1991. At that relevant time, the Tribunal had discretionary power with reference to the admission of appeal in respect of an order passed by the Collector (Appeals) under Section 35B where the duty or the fine or penalty did not exceed Rs. 10,000. This provision of Section 35B second proviso of the Act came to be amended revising the limit to Rs. 50,000/- only on 13-5-1993. Therefore, when the appeal had been filed, the appellant had a statutory vested right to have his appeal disposed of on merits without being rejected at the stage of admission. The petitioner at the relevant time had the right to have his appeal heard on merits since the amount involved was more than Rs. 10,000/-. The subsequent amendment, the learned Counsel contended, would not take away or abrogate the vested statutory right of appeal which ensured to the appellant under law. Since the Tribunal had taken the peculiar limit of Rs. 50,000/- in terms of the amended Section 35B second proviso of the Act which amendment came into force only on 13-5-1993 and since the position as it existed prior to the amendment limiting the discretion for rejecting an appeal at the admission stage was only Rs. 10,000/- the order of the Tribunal rejecting the petitioners appeal without admitting the same is not correct and an error apparent on the face of the record warranting rectification on grounds of law and also in the interests of justice.
In this context, he placed reliance on the ratio of the Supreme Court in the case of Garikapati Veeraya v. N. Subbiah Choudhry and Ors.
reported in (S) AIR 1957 SC 540 (V 44 C 83 July) and contended that the right of appeal is not a mere matter of procedure but a substantive right and the appellant had substantive right of appeal as on the day when he filed the appeal namely, 30-11-1991, the law as it stood at the relevant time casting a statutory obligation on the Tribunal to dispose of the appeal on merits should have been followed without rejecting the appeal at the stage of admission in terms of the amended Section 35B second proviso of the Act.
4. We have considered the submissions made before us. The short point canvassed is that the Tribunal is in apparent error to have rejected the petitioners appeal at the stage of admission in terms of Section 35B second proviso of the Act. The order of the Tribunal reads as under : "On going through the records, we find the amount of duty involved in the appeal is only Rs. 24,073.75. Therefore, the appeal is not admitted in terms of Second proviso to Section 35B (1) of the Central Excises & Salt Act, 1944." At the time, when the appeal was filed Section 35B second proviso read as under: "Provided further that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (d) where (i) in any disputed case, other than a case where the determination of any question having relation to the rate of duty of excise 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 (ii.) the amount of fine or penalty determined by such order, does not exceed ten thousand rupees." 5. Section 35B(1) second proviso was amended on 13-5-1993 as Rs. 50,000/-. It is well settled that the right of appeal is a substantive right and is not the mere matter of procedure and the proceedings right from the stage or order of adjudication and appeal are all integrally connected with series of proceedings with an intrinsic unity which in law should be regarded as one legal proceeding. It is also well settled that this right of appeal inheres in the appellant and existed as on and from the date the suit commenced although it may be actually exercised when the obvious judgment is pronounced and such right is to be governed by the law prevailing at the date of the execution of the proceeding and not by the law that prevailed either at the date of its decision or for that matter on the date of the filing of the appeal. It is also axiomatic that such a vested substantive right of appeal can be taken away only by a subsequent enactment if such subsequent enactment expressly or by necessary implication or intendment provides for the same and not otherwise. It could be hardly emphasized that the right of appeal which is governed by the law as it existed as a vested right in a party when the proceedings were first initiated could not be regarded as a mere alteration in procedure or alteration regulating the exercise of the right of appeal even if a subsequent statutory enactment were to whittle down, curtail or abrogate the right itself. In other words, if a person had statutory vested right even if the law were amended at a later point of time either taking away the right of appeal or restricting the scope of the appeal, such amendment would not be retrospective in its operation so as to curtail, abrogate or take away the pre-existed statutorily vested substantive right of appeal unless the legislature either expressly or by necessary implication unambiguously intended so. Keeping the aforesaid well settled principles of law in mind after the facts of the present case are taken into consideration it would be seen that when the petitioner filed his appeal, the petitioner/appellant had a vested right to have his appeal heard and disposed of on merits in accordance with law. In other words, the judicial discretion vested with the appellate authority to reject an appeal at the stage of admission should be permissible in the present case only if the fine, penalty or duty as the case may be was Rs. 10,000/-. In the present case, the amount involved was more than Rs. 10,000/- and the law as it stood at the relevant time and as extracted above did not invest the appellate authority like the Tribunal with any discretionary power to reject the appeal at the stage of admission and the Tribunal cannot apply the amended provision of the Act which enhanced the discretionary power of the Tribunal to reject an appeal at the stage of admission if the amount of duty, fine or penalty was Rs. 50,000/- and below which amendment came into force only on 13-5-1993. In other words, the later amendment to Section 35B(1) second proviso is not operative retrospectively as a procedural law. In other words, the aforesaid amendment cannot be regarded as a mere alteration in procedure or alteration regulating the exercise of the right of appeal if it whittle down the very right of appeal itself as the case herein. The right of appeal should be examined with reference to the date of original proceedings and therefore, reckoning law as it stood at the time of initiating of the proceedings the petitioner in the facts and circumstances had a vested substantive right of appeal and therefore the petitioners appeal should have been decided on merits and in accordance with law without being rejected as not admitted. Since this has not been done and the Tribunal erroneously applied the amended provision of law and rejected the petitioners appeal at the stage of appeal, we are inclined to think that this should be considered to be an apparent error warranting rectification. In this view of the matter and on the basis of the well settled legal proposition cited supra and in the interests of justice, the apparent error is rectified by recalling the order of the Tribunal. In the result, the order of the Tribunal is recalled and the registry is directed to list the appeal for disposal on merits in accordance with law after due notice to the authorities concerned.
6. I have perused the order recorded by my learned Brother. I am not able to agree with him that the substantive right of appeal has been in any way affected or taken away by the amendment of proviso (ii) under which the discretion has been vested with the Appellate Tribunal to refuse and accept an appeal where the difference of duty involved or amount of fine or penalty determined by the order appealed against is raised from the limit of Rs. 10,000/- to Rs. 50,000/-.
7. 1 observe the right of the appellant to file an appeal against the order of a Collector (Appeals) continues to subsist and the appeal filed is required to be heard by the Tribunal for taking a decision. It is not as if the discretion is exercised without application of mind.
The legislatures intention for not admitting them with the limit as amended upto Rs. 50,000/- is the same as when the earlier limit of Rs. 10,000/- was applicable i.e. to vest in the Tribunal powers to dismiss appeals without going into the merits of the case or where issues involving small amounts may have limited ramifications. The discretion vested in the Tribunal cannot be equated with the bona fide right to appeal available which as mentioned earlier continues to subsist notwithstanding the amendment raising the limit from Rs. 10,000/- to Rs. 50,000/- as above. The second proviso whereby an appeal involving an amount of Rs. 50,000/- of duty or fine or penalty only gives an enhanced power to the Tribunal not to admit certain appeals within that limit depending upon the facts and circumstances of the case. The discretion vested has to be read as to be exercised judiciously taking into consideration the issues involved, the appellant's financial status as also the facts and circumstances of the case, before it. No prejudice can be said to be caused to the appellant by enhancement of the upper limit so long as the discretion is exercised judiciously and before dismissal, the relevant factors involved in the appeal are considered. The appellant is not being denied the benefit of the right to appeal which has been conferred by the statute at the threshold.Legislature in its wisdom has put some limits to bring down the litigation and also to take care of the fact that the time of the Court is not taken by matters involving smaller amounts when particularly there is a pendency of cases involving very large amounts. The manner of disposal of the appeal as per the statute has to be considered as procedural and any change of the limit in terms of proviso to Section 35B as above from Rs. 10,000/- to Rs. 50,000/- has to be read as a change in the procedure for disposal of the appeal. All that the appellant is entitled to is a just and fair application of mind by the Tribunal to the issue raised by him in the appeal before the dismissal of the appeal in terms of Section 35B second proviso. The application of the mind by the Tribunal has to be taken to be bona fide. Before the dismissal under Section 35B proviso the appellants have their right to say as to why the appeal should not be dismissed under the said proviso and only after hearing the appellants, the appeal would be dismissed under the said proviso. The question to be considered is whether by the said amendment any substantive right has been taken away or it has been whittled down or the appellant is deprived of an effective right of appeal. As mentioned earlier, the right to appeal continues to exist and it is only in the method of consideration of the appeal that a change has been brought about. The discretion vested in the Tribunal in the matter of dismissal of the appeal cannot be taken to have whittled down the right to appeal and therefore has to be considered as procedural in nature. It has been authoritatively announced by the Board in the Colonial Sugar Refining Co. v. Irving, where it is in effect laid down that, "While provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. Their Lordships can have no doubt that provisions which, if applied retrospectively, would deprive of their existing finality, orders, which, when the statute came into force, were final, are provisions which touch existing fights." It would be a different matter in the case of the right of appeal itself is taken away by any amendment as in that case the amendment cannot have an effect retrospectively.
8. In the context of what constitutes procedural law or substantive law, the Hon'ble Supreme Court in the case of Bharat Barrel & Drum Manufacturing Co. Ltd. v. The E.S.I, reported in (1971) 2 SCC 860, while construing the issue of limitation where the change of limitation period would constitute procedural law or substantive law, held as under : "The topic of procedure has been the subject of academic debate and scrutiny as well as judicial decision over a long period, but in spite of it, it has defined the formulation of a logical test or definition which enables us to determine and demarcate the bounds where procedural law ends and substantive law begins, or in other words, it hardly facilitates us in distinguishing in a given case whether the subject of controversy concerns procedural law or substan tive law. The reason for this appears obvious because, substantive law deals with a right and is fundamental while procedure is concerned with legal process involving actions and remedies, which Salmond defines 'as that branch of law which governs the process of litigation', or to put it in another way, substantive law is that which we enforce while procedure deals with rules by which we enforce it. We are tempted in this regard to cite a picturesque aphorism of Therman Arnold when he says 'Substantive law is canonized procedure. Procedure is unfrocked substantive law.
Historically there was a period when substantive law was inextricable intermixed with procedure; at a later period procedural law seems to have reigned supreme when forms of action ruled. In the words of Maine, 'So great is the ascendancy of the law of action in the infancy of courts of justice, that substantive law has at first the look of being gradually secreted in the interstices of procedure'. Oliver Wendel Holmes had however observed, 'in the common law, whenever we take a leading doctrine of substantive law far enough back, we are likely to find some forgotten circumstances of procedure at its source'. It does not therefore appear that the statement, that substantive law determines rights and procedural law deals with remedies is wholly valid, for neither the entire law of remedies belongs to procedure nor are rights merely confined to substantive law. It appears to us that there is a difference between the manner in which jurisprudential lawyers consider the question and the way in which judges view the matter. The present tendency is that when a question of limitation arises, the distinction between so called substantive and procedure statutes of limitation may not prove to be a determining factor but what has to be considered is whether the statute extinguished merely the remedy or extinguishes the substantive right as well as the remedy.
(The Court finally held that since the rule in the present case barred the claim and extinguished the right it fell outside 'procedure' and was substantive and outside the power of Government to make rules of procedure)".
In the present case, it is to be observed as the right of appeal has not been extinguished and therefore the proviso can be said to have only brought about a procedural change and which could be retrospective in application. I, therefore, hold there has been no mistake in passing of the order. The ROM application is therefore dismissed.
Whether in the facts and circumstances of the case, the order of the Tribunal dated 3-6-1994 is to be recalled as held by the Vice President for the reasons recorded by him; Whether in the facts and circumstances of the case there has been no mistake in the order of the Tribunal and the ROM has to be dismissed as held by Member (Technical) for the reasons recorded by him.Sd/- Sd/-(V.P. Gulati) (S. Kalyanam)Member (T) Vice PresidentDated : 9-1-1996 Dated : 5-12-1995 9. This case is posted before me on difference of opinion between two learned members. The amount involved in this case is Rs. 24,073.75. The learned Vice President (J) held that when the order of rejection of the appeal under Section 35B(1) of the CESA' 1944 was passed by the Tribunal on 3-6-1994, the Act was amended and the limit was enhanced to Rs. 50,000/-. The learned Vice President also held that on the date when the appellant filed the appeal the limit was Rs. 10,000/- and therefore the appellant had a vested right and the amendment could not take retrospective effect and therefore, the appeal could not have been dismissed. Therefore, he was of the view that the dismissal order of the Tribunal should be recalled and he ordered accordingly. But the learned Member (T) held that in the present case, it is observed that the right of appeal has not been extinguished and therefore the proviso can be said to have only brought about a Procedural change and which could be retrospective in application. Therefore, the following difference of opinion is to be decided by me : Whether in the facts and circumstances of the case, the order of the Tribunal dated 3-6-1994 is to be recalled as held by the Vice President for the reasons recorded by him, Whether in the facts and circumstances of the case, there has been no mistake in the order of the Tribunal and the ROM has to be dismissed as held by Member (Technical) for the reasons recorded by him.
10. I have considered the submission made by Shri Sankar Raman, the learned Counsel for the appellant. He relied upon the decision of the Hon'ble Supreme Court reported in 1983 (13) E.L.T. 1277.
11. Shri S. Murugandi, learned DR for the department reiterated the reasoning recorded by learned Member (T).
12. I have considered the submissions of both the sides. Para 10 of the decision relied upon by the learned Counsel is reproduced below : 10. Sri Ganapathy Aiyer urges that the language of S. 22(1) as amended clearly makes the section retrospective. The new proviso, it is pointed out peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Dolimuddin (supra), namely, that after the amendment the Court had no authority to entertain an appeal without a certificate from the Single Judge.
Rankia repelled this argument with the remark at p. 643 : "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right".
In our view the above observation is apposite and applies to the case before us. The true implication of the above observation; as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to S. 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy Aiyar on this point, therefore, cannot be accepted.
A reading of this goes to show that the fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of the right. As the old law which prescribes the limit of Rs. 10,000/- continued to exist for the purpose of exercise and enforcement of that right, therefore, there can be no question of the amended provision preventing that exercise of right.
The reason is that the appellant has a vested right of appeal. In this connection the decision of the Supreme Court in the case of Garikapati Veeraya v. N. Sitbbiah Choudhry and Ors. reported in AIR 1957 SC 540 which is relied upon by the learned Counsel is relevant. In this judgment, in para 23, their lordships have held as follows: "This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise".
In the present case, the amended proviso enhanced the limit to Rs. 50,000/-. This amendment has not expressly or by necessary intendment taken away the appellant's right of appeal in terms the old proviso wherein the limit was Rs. 10,000/-. In this view of the matter, I agree with the opinion of the learned Vice President (J) and order that the appeal shall be listed for being heard on merits. The file may now be placed before the Bench for necessary orders in this regard.
In view of the majority decision, the order of the Tribunal is recalled and the registry is directed to list the appeal for disposal on merits in accordarce with law and after due notice to the authorities concerned.