Commissioner of Central Excise Vs. Oripol Industries - Court Judgment

Excerpt:
1. the question referred for consideration by the larger bench is whether commissioner (appeals) does have jurisdiction to remand the appeal before him after the amendment to section 35a by the finance act, 2001 w.e.f. 11-5-2001. reference was necessitated in view of difference of opinion between two benches of this tribunal on the issue. a learned single member of east regional bench took the view in cce & customs, bhubaneshwar v. indian aluminium co. - 2002 (144) e.l.t.97 (t) = 2002 (50) rlt 92 that even after the amendment the commissioner (appeals) has inherent power to remand the matter to the original adjudicating authority for de novo consideration. the referring bench agreed with the above view. but it was noted that a division bench of bombay bench of this tribunal has taken.....

Judgment:
1. The question referred for consideration by the Larger Bench is whether Commissioner (Appeals) does have jurisdiction to remand the appeal before him after the amendment to Section 35A by the Finance Act, 2001 w.e.f. 11-5-2001. Reference was necessitated in view of difference of opinion between two Benches of this Tribunal on the issue. A learned Single Member of East Regional Bench took the view in CCE & Customs, Bhubaneshwar v. Indian Aluminium Co. - 2002 (144) E.L.T.97 (T) = 2002 (50) RLT 92 that even after the amendment the Commissioner (Appeals) has inherent power to remand the matter to the original adjudicating authority for de novo consideration. The Referring Bench agreed with the above view. But it was noted that a Division Bench of Bombay Bench of this Tribunal has taken a different view in Vipor Chemicals Pvt. Ltd. v. Commissioner of Customs, Mumbai - 2002 (144) E.L.T. 385. It was held therein that after the amendment w.e.f. 11-5-2001 the Commissioner (Appeals) will have no power of remand.

2. In CCE & Customs, Bhubaneshwar v. Indian Aluminium Co. the learned Single Member had placed reliance on two decisions of the Andhra Pradesh High Court in Thimmasamudram Tobacco Co. v. Assistant Collector of Central Excise - AIR 1961 (Andhra Pradesh) 324 and Narsingha State Transport Authority 1958, Andhra Law Time 627 along with a decision of the Supreme Court in UOI v. Umesh Dhaimode - 1998 (98) E.L.T. 584 before introducing specific provision giving power of remand in the year 1982 can be given to the present section after the amendment under the Finance Act, 2001 which came into force on 11-5-2001. On the other hand, the learned DR would contend that when a specific power given under the statute was taken away by way of amendment in Finance Act, (14 of 2001) one cannot go back to the meaning given to Section 35 of the Central Excise or 128(2) of the Customs Act by the Court as it would be against the legislature's intention. In support of the above contention he placed reliance on Notes on Clauses on the amendment to Section 35A of the Central Excise Act and 128A of the Customs Act in the Finance Bill of 2001. He submits that the Notes on Clauses would clearly show that the Legislature intended to take away power of remand from the Commissioner (Appeals).

3. We will now refer to the legislative history of the appellate power of the Commissioner (Appeals). Section 35(1) as it stood before 11-10-82 contained the provisions regarding the appellate power. It reads as follows :- "35. Appeals. (1) Any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Revenue, or, in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf the Central Government, Such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against: Provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation than has been adjudged against him in the original decision or order." Under the Finance Act, 1980 Chapter IVA was introduced and the procedure in appeal was brought under Section 35A. Relevant provisions regarding the appellate power of Commissioner (Appeals) after amendment which came into force on 11-10-82 reads as follows :- "35A. Procedure in appeal. - (3) The Collector (Appeals) may, after making such further inquiry as may be necessary, pass such order as 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, if necessary : Provided that an order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater/value or reducing the amount of refund shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order : Provided further that where the Collector (Appeals) is of opinion that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in Section 11A to show cause against the proposed order." 4. A specific provision granting power of remand to the Commissioner (Appeals) was thus incorporated in Sub-section (3).

5. By Section 128A of the Finance Act, 2001 Sub-section (3) of Section 35 A was substituted w.e.f. 11-5-2001 as follows :- "SECTION 35A, Procedure in Appeal. - (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." 6. Under the above amendment the power of remand which had been granted to the Commissioner (Appeals) specifically by Finance Act 1980 was taken away. Similar is the legislative history of Sections 128 and 128A of the Customs Act, 1962.

7. The contention raised by the respondent-assessee is that after the amendment by Finance Act, 2001 the language of Sub-section (3) of Section 35A is comparable to Sub-section (1) of Section 35, as it stood before the amendment by Finance Act, 1980. Therefore, the interpretation given to Section 35(1) as it stood before 11-10-82 should be given to the present Section 35A(3). In AIR 1961 (Andhra Pradesh) 324 a Division Bench of the Andhra Pradesh High Court while considering the scope of erstwhile Section 35(1) took the view that though Section 35 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 original authority for making an inquiry afresh, the absence of such provision would not disable the appellate authority from sending the matter back to the original authority. The con-ferment of the appellate jurisdiction necessarily implies that it has such power to remand as it has to confirm, alter or annul the order appealed against. In 1998 (98) E.L.T.584 the Supreme Court had occasion to consider the erstwhile Section 128(2) of the Customs Act, 1962. It was held that order of remand necessarily annul the decision which is under appeal before the appellate authority and the appellate authority is vested with the power to pass such order as it deems fit. Both these portions of the aforesaid provision read together, it was held, would 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. It is true that wording of the present section after the amendment under the Finance Bill, 2001 is more or less similar to pre 1982 position. But we find merit in the contention raised on behalf of the Revenue that when there is conscious action on the part of the legislature to do away with the power of remand by the Commissioner (Appeals) under the Finance Bill, 2001 Tribunal will not be justified to give an interpretation that the Commissioner (Appeals) would still retain power of remand as an inherent power of an appellate authority.

9. Clause 122 of the Finance Bill, 2001 reads as follows :-"122. In Section 35A of the Central Excise Act, - (a) in Sub-section (3), for the portion beginning with the words and brackets 'The Commissioner (Appeals) may' and ending with the words 'additional evidence, if necessary', the following shall be substituted, namely- 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.' (b) after Sub-section (4), the following sub-section shall be inserted, namely :- '(4A) The Commissioner (Appeals) shall, where it is possible to do so, hear and decide every appeal with a period of six months from the date on which it is filed'." Under the Notes on Clauses the following is the Note given against the Clause 122:- "Clause 122 seeks to amend Section 35A of the Central Excise Act so as to, - (i) provide that where it is possible, the Commissioner (Appeals) shall decide every appeal within a period of six months of its being filed; (ii) withdrew the powers of the Commissioner (Appeals) to remand matters back to the adjudicating authority for fresh consideration."In Shahsikant Laxman Kale and Anr. v. Union of India - 1990 AIR (S.C) 2214 the Apex Court has held that for determining the purpose or object of the legislation, it is permissible to look into the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law. For the limited purpose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing. In the above case reliance was placed on what was mentioned in the Notes and Clauses but not on the memorandum explaining the provisions under the Finance Bill. In K.P. Varghese v.Income Tax Officer, Ernakulam - AIR 1981 (S.C.) 1922 the Apex Court took the view that the speech made by the Finance Minister while moving the amendment introducing Section 52(2) of the Income Tax Act by way of adding Sub-section (2) was extremely relevant as it throws considerable light on the object and purpose of enactment of 52(2). It was held that even the speeches of Members in the legislature are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill can certainly be referred for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted.

11. By applying the ratio of the above decision it is permissible to look into the Notes on Clauses to ascertain the intention of the amendment brought in Finance Bill, 2001. A reference to the Notes on Clauses would clearly show that the intention was to take away the power of remand from the appellate authority. After a conscious interference by the legislature as above, the respondent cannot be heard to contend that the Commissioner (Appeals) would still retain the power of remand as an inherent power of the appellate authority.

12. In the light of the above, we are inclined to agree with the view taken by the West Regional Bench in Vipor Chemicals Ltd. v.Commissioner of Customs, Mumbai - 2002 (144) E.L.T. 385 and disagree with the view taken by the East Regional Bench in CCE & Customs, Bhubaneshwar v. Indian Aluminium Co. - 2002 (144) E.L.T. 97 (T) = 2002 (50) RLT 92. The question referred is answered as above and the appeals are sent to original Bench for appropriate orders.