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Collector of Central Excise Vs. National Chemical Works - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Calcutta
Decided On
Reported in(1985)(19)ELT160Tri(Kol.)kata
AppellantCollector of Central Excise
RespondentNational Chemical Works
Excerpt:
.....of the said notification, the assessee becomes entitled to be exempted from the purview of excise duty. undoubtedly, it comes as nil rate of duty. the intention of the legislature in sub-section (2) of section 35d is that if this court decides this appeal it will be an exercise of irregular or assumption of jurisdiction. 'jurisdiction' means the extent of the authority of a court to administer justice not only with reference to the subject-matter of the suit but also local and pecuniary limits of its jurisdiction. the jurisdiction of the court may be original or appellate in the exercise of its original jurisdiction. the court entertains original suits. in the exercise of its appellate jurisdiction, it entertains appeals and while exercising the jurisdiction in deciding the.....
Judgment:
1. Collector of Central Excise, Patna has filed an appeal being aggrieved from the Order No. 135/BR/83 dated 1st August, 1983 passed by the learned Collector (Appeals), Central Excise, Calcutta.

2. Shri A.K. Sarkar, the learned Senior Departmental Representative has appeared on behalf of the appellant and has pleaded that the appeal has been filed by the appellant by mistake with the East Regional Bench. He has stated that it is a case where interpretation of Notification No.71/78 dated 1st March, 1978, Notification No. 80/80 dated 19th June, 1980, and Notification No. 111/78 dated 9th May, 1978 is involved and if the respondent is given the benefit of these Notifications, it come to nil rate of duty and in view of the provisions of Sub-section 2 of Section 35D of the' Central Excises and Salt Act, 1944, this Court has got no jurisdictron. He has pleaded that since this Court has, got no jurisdiction the appeal should be transferred to the Special Bench, Customs, Excise & Gold (Control) Appellate Tribunal, R.K. Puram, New Delhi.

3. Shri P.R. Biswas, the learned Consultant and Shri U.C. Chatterjee, the. learned Advocate have appeared on behalf of the Respondent. Shri Chatterjee, the learned Advocate has pleaded that nil rate is no rate.

He has submitted that by virtue of Notification No. 80/80 dated 19 th June, 1980 and other Notifications mentioned in the order, the respondent is entitled to exemption and no rate of duty is involved. He has pleaded that the respondent "is following self-removal procedure system and the goods are delivered from the factory under Gate Pass under Rule 52-A and Rule 173-G of the Central Excise Rules, 1944. He has pleaded that in Column No. 9 of G.P. 1, there is mention of rate of duty and as such there is no dispute that rate of duty is involved and this Court has jurisdiction. ' Shri P.R. Biswas, the learned Consultant has also pleaded that Section 35-B too is not applicable in the case of respondent. He has referred to the final portion of the order passed by the Collector (Appeals). The same is reproduced as under :- "Therefore, the benefit of the exemption cannot be denied to the appellants only because a. small portion of the goods manufactured and cleared during the; period 8-3-1979 to 30-7-1982 happened to be sold to the customers from Nepal On this cpnsideration, I allow the appeal and set aside the order. of the Additional Collector with direction to grant consequential relief," Shri Biswas, the learned Consultant, has further pleaded that this Court's powers are unlimited and has referred to Rule 41 of the Customs, Excise & Gold (Control) Appellate Tribunal Procedure Rules, 1982. The same is reproduced,as under:- "The Tribunal may make sulch orders or give; such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice." Both the learned authorised representatives on behalf of., the respondent have pleaded that this Court has jurisdiction and in case the appeal is transferred to the Special Bench, it will be a matter of great inconvenience to the respondent.

4. In reply Shri A.K. Sarkar, the learned Senior Departmental Re-' prcsentative has pleaded that this court has'got no jurisdiction as rate of duty is involved in this case.

5. After hearing both the sides, 1 would like to observe that Customs, Excise & Gold (Control) Appellate Tribunal has come into existence by virtue of the provisions of Finance Act No. 2 of 1980 where by Chapter VIA was inserted and the provisions of the said chapter were brought into force from the 11th October, 1982. 'Relevant Sections from Chapter VIA are reproduced as under:- (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order- (a) a decision or order passed by the Collector of Central Excise as an adjudicating authority ; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereinafter in this Chapter referred to as the Board) or the Appellate Collector of Central Excise under Section 35, as it stood immediately before the appointed day : (d) an order passed by the Board or the Collector of Central Excise, either before or after the appointed day, under Section 35A, as it stood immediately before that day : Provided 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 a 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.

(2) The Collector of Central Excise may, if he is of opinion that an order passed by the Appellate Collector of Central Excise under Section 35, as it stood immediately before the appointed day, or the Collector (Appeals) under Section 35A, is not legal or proper, direct a Central Excise Officer authorised by him in this behalf (hereafter in this Chapter referred to as the authorised officer) to appeal on his behalf to the Appellate Tribunal against such order.

(3) Every appeal under this Section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the Collector of Central Excise, or as the case may be, the other party preferring the appeal.

(4) On receipt of notice that an appeal has been preferred under this Section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in the prescribed manner against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in Sub-section (3).

(5) The Appellate Tribunal may admit an appeal or permit .the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in Sub-section (3) or Sub-section (4) if it is satisfied that there was sufficient cause for not presenting it within that period.

(6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, except in the case of an appeal referred to in Sub-section (2) or a memorandum of cross-objections referred to in Sub-section (4), be accompanied by a fee of two hundred rupees.

(1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.

(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (I) and shall make such amendments if the mistake is brought to its notice by the Collector of Central Excise or the other party to the appeal : Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this Sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.

(3) The Appellate Tribunal shall send a copy of every order passed under this Section to the Collector of Central Excise and the other party to the appeal.

(4) Save as provided in Section 35G or Section 35L, orders passed by the Appellate Tribunal on appeal shall be final.

(1) The provisions of Sub-sections (1), (2), (5) and (6) of Section 129C of the Customs Act, 1962 (52 of 1962) shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962.

(2) Every appeal against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or the value of goods for purposes of assessment, shall be heard by a Special Bench constituted by the President for hearing such appeals and such Bench shall consist of not less than three members and shall include at least one judicial member and one technical member.

(3) The President or any other member of the Appellate Tribunal authorised in this behalf by the President may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member where- (a) in any disputed case, other than a case where the determination of any question having a 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 (b) the amount of fine or penalty involved, does not exceed ten thousand rupees." A simple reading of Sub-section (2) of Section 35D clearly shows that every appeal against a decision or order relating among other things, to the determination of any question having a relation to the rate of duty of excise or the value of goods for purposes of assessment, shall be heard by a Special Bench constituted by the President for hearing such appeals and such Bench shall consist of not less than three members and shall include at least one judicial member and one technical member. When an assessee claims that he is entitled to the benefit of a particular notification and in interpreting the applicability of the said notification, the assessee becomes entitled to be exempted from the purview of excise duty. Undoubtedly, it comes as nil rate of duty. The intention of the legislature in Sub-section (2) of Section 35D is that if this Court decides this appeal it will be an exercise of irregular or assumption of jurisdiction. 'Jurisdiction' means the extent of the authority of a Court to administer justice not only with reference to the subject-matter of the suit but also local and pecuniary limits of its jurisdiction. The jurisdiction of the Court may be original or appellate in the exercise of its original jurisdiction. The Court entertains original suits. In the exercise of its appellate jurisdiction, it entertains appeals and while exercising the jurisdiction in deciding the appeal, the appellate court is bound by the provisions of the statute and the appellate court cannot exceed its jurisdiction as provided in the statute. A party may waive objection to irregular excercise or assumption of jurisdiction; but there can be no question of waiver where there is a want of inherent jurisdiction because in such a case, the order must be treated as nullity in the eyes of law. The scheme of the act in the Customs, Excise & Gold (Control) Appellate Tribunal is very peculiar in its own way. Under the Income Tax Act, 1961, a reference lies to the High Court under Sections 256(1) and 256(2) of the Income Tax Act, 1961, in respect of the orders passed by the Income Tax Appellate Tribunal, whereas in the case of Customs, Excise & Gold (Control) Appellate Tribunal where an order has been passed by the Regional Bench of the Tribunal, a reference application lies to the High Court under Section 35G of the Central Excises and Salt Act, 1944 and to the Supreme Court under Section 35-H of the said Act. Under Section 35-L of the Central Excises and Salt Act, 1944, the appeal lies to the Supreme Court. The same is reproduced as under : (a) any judgment of the High Court delivered on a reference made under Section 35G in any case which, on its own motion or on an oral. application made by or on behalf of the party aggrieved, immediately after the passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court ; or (b) any order passed by the Appellate Tribunal relating among other things, to the determination of any questibii having a relation to the rate of duty of excise or to the value of goods for purposes of assessment." A simple reading of Sub-section (b) of Section 35-L clearly shows that an appeal lies to the Supreme Court from any order passed by the Appellate Tribunal relating to among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. A reference application lies to the High Court only in those cases where a question of law or a mixed question of law and fact are involved and this jurisdiction as a final fact finding court, is to be exercised by the Regional Bench.

Whereas in the case of Special Bench which has got all India jurisdiction, an appeal lies to the Supreme Court under Section 35-L of the Central Excises and Salt Act, 1944. It is a substantive right of the appellant irrespective of whether question of law or question of fact is involved. Whereas in the case of Regional Bench, the finding arrived by the Tribunal on question of fact is final. Hon'ble Supreme Court and High Court are not courts of appeal under the Central Excises and Salt Act, 1944. A reference application is filed under Section 35-G of the Central Excises and Salt Act, 1944. Similar are the provisions of Income Tax Act, 1961 or old Income Tax Act, 1922. This view is supported by the judgment of Privy Council in the case of Rajendra Narain Bhanjadeo v. C.I.T. reported in 8 ITR 495-500. This view of the Privy Council was affirmed by the Hon'ble Supreme Court in the case of Indian Molasses v. C.I.T. reported in 37 ITR 66-72 and Petlad Turkey Red Die Works Co. Ltd. v. C.I.T. reported in 48 ITR 92-96 (S.C.). The jurisdiction of Regional Bench is territorial and the jurisdiction of the Special Bench is all India jurisdiction. The larger Bench of this Tribunal in Appeal No. ED(SB) (T) 11/82 B and other six appeals vide order dated 7th June, 1984 has held that Special Bench has got all India jurisdiction. During the course of arguments, the learned authorised representative for the respondent had pleaded that they have got no objection if this Court exercise its jurisdiction in deciding this appeal. There is no question of waiver where there is inherent jurisdiction because in such a case, it will be nullity in the eyes of law. Order No, 2 of 1982 passed by the Hon'ble President, Customs, Excise & Gold (Control) Appellate Tribunal also clearly lays down that where rate of duty is involved, it has to be dealt with by the Special Bench. The same is reproduced as under : "Four Special Benches shall be located at New Delhi, and shall deal with matters relating, among other things, to the determination of any question having a relation to the rate of duty of customs or of excise (hereinafter referred to as classification) or to the value of goods for purposes of assessment or duty of customs or of excise (hereinafter referred to as valuation)." 6. I would also like to refer a judgment of the Special Bench in the case of Malwa Vanaspati & Chemicals Co. Ltd., Indore v. Collector of Central Excise, Nagpur reported in 1983 ECR 1273D. I would like to reproduce para Nos. 17, 18 and 19 of the said judgment.

"17. Sub-section (2) of Section 35-D of the Act vests exclusive jurisdiction in the Special Bench of the Tribunal to hear and decide all appeals against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment.

18. In Sub-section (3) of the aforesaid provision jurisdiction is conferred on the President or any other member, so authorised in this behalf by the President, sitting even singly, to hear and decide any disputed case, where the difference in duty or the duty involved does not exceed ten thousand Rupees, provided that the determination of any question having a relation to the rate of duty or value for purposes of assessment is also not in issue 19. Clauses (a) & (b) in Sub-section (3) of Section 35-D contemplate situations wher the point in issue is not in relation to the rate of duty. The provisions of Sub-section (3) have a specific purpose inasmuch as in a given case a daty may have been paid and a claim of refund is made on the ground that the payment was wrongly made or in excess of what was due. There may be more than one reason for such a claim without contesting the rate. Similar would be the case with regard to penalty. But the case in hand stands on a different footing. It is not one of those situations where duty is paid and/or levy is being contested or exemption is being claimed which does not affect the rate. The effect of the claim of exemption under the Notification No. 23/72-C.e. is to change the rate itself. To further elaborate the point, those cases wher duties are paid-it may be excise duty or import tariff or export levy-and subsequently it is contested that they were wrongly collected, without contesting the rate or accepting certain rates, will stand on different footing that the type of cases before us where question would normally be whether an exemption notification or a concession notification issued under Rule 8 and/or Rule 192 will affect the rate of duty.

Such cases certainly would involve a question in relation to rate of duty of excise which are contemplated under Sub-section (2) of Section 35-D to be dealt with by a Special Bench. To repeat, when the question comes up for determination of duty, may be with reference to an exemption or concession notification, it would necessarily affect the rate and, therefore, the question would be in relation to the rate of duty. Therefore, I cannot be a party to my Brother's viewpoint that the jurisdiction of the case did not vest but a chance factor brought the case before the Special Bench." 7. I am in full agreement with my learned Brothers. Accordingly, I hold that in the instant appeal, rate of duty is involved and the jurisdiction vests with the Special Bench. The Assistant Registrar is directed to transter the file to the Special Bench, Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi.


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