Judgment:
1. By the reference application cited above, the Commissioner, Central Excise has prayed for reference to the Hon'ble High Court stating "Whether interest on delayed payment collected by the department which was admittedly not collected under the Central Excise Act 'as duty', the CEGAT has jurisdiction to decide such cases and that a statement of the case be drawn up and the question of law referred to the High Court." 2. The facts of the case are that the respondents herein were asked to pay shortfall of duty of Rs. 1,70,723.25 in the assessment Memo of the RT 12 return for the month of Jan., 1984. The respondents herein initially issued three cheques for covering the amount out of which only one cheque for Rs. 60,000/- was encashed. The others were dishonoured. Again subsequently, the respondents herein issued six more cheques towards the balance amount of which only four amounting to Rs. 50,0007- were encashed and the remaining two were returned for want of balance. The Asstt. Collector, Central Excise, Ludhiana, initiated the proceedings for the recovery of this balance and interest of Rs. 37,918.85 and recovered the balance amount of duty and interest from the refund due to the respondents herein. The order of the Asstt.
Collector recovering the interest was challenged before the Collector (Appeals) who observed that the respondents' conduct was deliberate to avoid payment of duty. The Tribunal after considering the evidence and the submissions made before it held that the order of the lower authorities levying and collecting interest amount and recovering it in the manner done by them in this case is not sustainable and that recovery of interest was accordingly set aside. Against this order of the Tribunal, the ld. Commissioner has prayed for reference to the Hon'ble High Court stating that the point of law is involved.
3. Shri Nanak Chand, the ld. DR appearing for the respondent Com-missioner submits that the Tribunal can pass orders only on issues covered by the CESA, 1944 and the Rules framed thereunder and has no jurisdiction to deal with the issues not covered by the CESA, 1944 read with Rules. He submits that thus there was lack of jurisdiction of the Tribunal and prays that a reference may be made to the Hon'ble High Court.
4. Mrs. Reena Khair, the ld. Advocate appearing for the respondents submits that a reference on a question of law can be made to the Hon'ble High Court provided such question arises out of an order passed by the Tribunal. She submits that the Apex Court in the case of Commissioner of Income Tax v. Scindia Steam Navigation Co. Ltd. reported in 1961 (42) ITR 589 (SC) : AIR 1961 SC 1663 while examining the question as to when a particular question could be said to arise out of an order of the Tribunal observed :- (1) When a question is raised before the Tribunal and is dealt with by it, it is one clearly arising out of its order; (2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order; (3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order.
On examination of the order of the Tribunal, I find that this question was not raised before the Tribunal nor considered by the Tribunal.
Thus, it is not a question arising out of the Tribunal's order.
5. Since the issue does not arise out of the order of the Tribunal, therefore, there is no question of making reference to the Hon'ble High Court.