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Oriental Importers and Exporters Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1987)(29)ELT709TriDel
AppellantOriental Importers and Exporters
RespondentCollector of Customs
Excerpt:
.....appellants and shri a.s. sundar rajan, j.d.r. for the department and gone through the record.7. shri sundar rajan, departmental representative raised an preliminary objection that special bench 'c', would not be competent to rehear the appeal. according to him the matter may, therefore, be referred to the president to indicate the point or points on which decision by the third (or more) member(s) of the tribunal is required.8. the basis of shri sundar rajan's apprehension is that after the matter was heard by the regional bench no judgment was delivered by either of the members of the bench nor has the matter been referred to the third (or more) member(s) of the appellate tribunal as provided for under sub-section 5 of section 129c of the customs act, 1962.9. shri sundar rajan read.....
Judgment:
1. The facts in brief are that the appellants imported Viscose Staple Fibre and claimed clearance of the consignment under Item No. 1 of appendix 10 of the April, 1981 -March, 1982, Import Control Policy.

They got the fibre converted into yarn on job work for ultimate use in the manufacture of hosiery goods. The conversion of the fibre into yarn on job basis was done at 3.C. Mills Limited, Gwalior. The Collector of Customs, held that the appellants were not entitled to import viscose staple fibre as raw material for the manufacture of knitted fibre (hosiery goods) inasmuch as the staple fibre was really the raw materials for the manufacture of yarn and it was the yarn so manufactured that was the raw materials for the manufacture of the hosiery goods. On this basis, the imports were held as unauthorised and the goods were confiscated. They were, however, allowed to redeem the goods on payment of Rs. 3,000/- each. The appeal before the Central Board of Excise and Customs, New Delhi, was also dismissed on the same ground.

2. Aggrieved, the appellants filed an appeal before the West Regional Bench of this Tribunal at Bombay which was heard by Shri G. Sankaran (Member Technical), and Shri K. Gopal Hedge (Member Judicial).

3. During the course of arguments the departmental representative cited a decision of the West Regional Bench of this Tribunal in the case of Kashyap Zip Industries (P) Ltd. v. Collector of Customs, Bombay, (Appeal No. 31 of 1982), 1983 ELT 626 in which an identical issue was involved. In that case the Bench had held that the manufacture tapes and sewing threads was not an intermediate process in the manufacture of Zip fasteners from the filament yarn and on that basis the import was not found to be covered by Sr. No. 1 of appendix 10.

4. As the findings given in the case of Kashyap Zip Industries (P) Ltd. (supra) were not acceptable to the Bench hearing the present appeal, so it was ordered that the paper be sent to the Hon'ble President for constitution of a larger Bench to decide the issue involved.

6. We have heard Shri H.D. Nagarkar, Advocate for the appellants and Shri A.S. Sundar Rajan, J.D.R. for the department and gone through the record.

7. Shri Sundar Rajan, departmental representative raised an preliminary objection that Special bench 'C', would not be competent to rehear the appeal. According to him the matter may, therefore, be referred to the President to indicate the point or points on which decision by the third (or more) Member(s) of the Tribunal is required.

8. The basis of Shri Sundar Rajan's apprehension is that after the matter was heard by the Regional Bench no judgment was delivered by either of the Members of the Bench nor has the matter been referred to the third (or more) Member(s) of the Appellate Tribunal as provided for under Sub-section 5 of Section 129C of the Customs Act, 1962.

9. Shri Sundar Rajan read out the provisions of Sub-section 5 of Section 129C of the Customs Act, 1962 which are as under : "If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ and the case shall be referred by the President for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first heard it." 10. Shri A.S. Sundar Rajan, also made reference to Patna High Court Judgment in Hanutram Chandanmul v. Commissioner of Income Tax, Bihar & Orissa [I.T.R. Vol. 23-Page-505], in support of his contention that it is the duty of the members of the Tribunal who heard the appeal in the first instance to formulate clearly the point or points on which they differ and only then the case may be properly referred to the President of the Tribunal.

11. Shri Nagarkar, learned Advocate for the appellants countered the arguments of Shri A.S. Sundar Rajan and submitted that the plea of Shri Sundar Rajan is based on wrong apprehension. It is not the case where there is a difference of opinion among the Members comprising the Bench hearing the appeal. It is only in those cases where the Members of the Bench differ in opinion on any point the provisions of Sub-section 5 of Section 129C of the Customs Act, 1962 would come into play. The President who; is head of the Tribunal is empowered to regulate the procedure of the Benches and by virtue of his inherent powers the President has rightly assigned this matter to Special Bench 'C' for hearing. There is no question to refer the points of difference to third Member or Members as Shri Sundar Rajan wants. There is no difference of opinion among the members comprising the Bench who heard the appeal.

12. Shri Sundar Rajan has not disputed the powers of the President to constitute larger Bench for hearing the appeals if he is required to do so in maintaining the uniformity in the decisions given by the various Benches of the Tribunal, The objection of Shri Sundar Rajan is that only points of difference should have been referred to a third member and not the entire appeal. We do not find any force in this contention of Shri Sundar Rajan. Sub-section 5 of Section 129C of the Customs Act, 1962 only provides that if the Members of a Bench differ in opinion on any point, the point shall be decided according to. the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ and the case shall be referred to the President for hearing on such point or points by one or more of the other members of the Appellate Tribunal. It is not a case where there is a difference of opinion on any point between the Members of the Bench who heard the appeal. It is on account of the fact that the earlier decision given by the West Regional Bench of the Tribunal at Bombay in Kasyap Zip Industries case was not acceptable to the Bench who, heard this appeal and in those circumstances, to avoid two contradictory decisions they thought it proper to place the matter before the Hon'ble President to assign the same to a Larger Bench for decision. It is in these circumstances that the President assigned this case to special Bench 'C' for hearing. It does not seem to reason as to how the provisions of Sub-section 5 of Section 129C of the Customs Act, 1962 would come into operation in such circumstances. The Appellate Tribunal is empowered to regulates its own procedure and the procedure of the Bench thereof in all matters arising out of the exercise of its power or of the discharge of its functions.

In exercise of this power the President of the Tribunal assigned this case to special bench 'C1 for hearing to avoid contradictory decisions of two Bench of the same status.

13. Under these circumstances, we find no force in this preliminary objection raised by Shri Sundar Rajan, departmental representative and reject the same.

14. I am in agreement with Mr. Sundar Rajan's arguments before this Bench. Section 129C(5) of the Customs Act, 1962 permits a reference to be made to one or more other Members of the Appellate Tribunal only if the Members of the Bench, i.e., the Bench that first heard the appeal, differ in opinion on any point. If the Members are equally divided, the matter or point on which they differ can be heard and decided by one or more Members and the points of dispute shall be decided in accordance with the majority opinion. The provision for reference of a different of opinion is in respect of a difference between Members of a Bench.

There is no provision for referring a matter heard and concluded before" a Sub-section 2 Bench, to other Members. There must first be a difference' of opinion and the Members of the Bench where the difference took place must be equally divided in their difference.

15. There has been no difference of opinion in the Bench that first heard this matter, and therefore, there is' no point of difference to be decided by the other Members. In my opinion, the law does not provide for a matter heard and concluded before one Bench to be heard by another Bench, from the beginning as a fresh case. Such a hearing can only be on points of difference in the first Bench. If, at the end of the hearing of the Bench to which the matter is referred, a decision is taken, will the Members of the first Bench also be signatories to the decision? It seems to me they cannot be, since they have not expressed any opinion and have not differed as is required for the process of subsection 5 to be initiated and to be set in motion. What then would be the outcome of the hearing and arguments before the first Bench? Are they to be taken into account or not? 16. It was argued on behalf of M/s. Amar Knitting Works that Sub-section 6 gives the Appellate Tribunal the power to regulate its own procedure. But this power is "subject to the provisions of this Act" the sub-section begins with these words. Since the proceedings before the second Bench of three Members is not in accordance with the Act, I hold the objections raised by the department to be valid.


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