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Central Board of Excise and Customs Vs. Ashok Leyland, Madras - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtChennai High Court
Decided On
Case NumberW.A. No. 557 of 1978 against W.P. No. 7472 of 1975
Judge
Reported in1986(7)ECC10; 1985(5)LC2320(Madras); 1985(22)ELT17(Mad)
ActsCustoms Act, 1962 - Sections 14(1), 108, 128, 130 and 130(1); Finance Act, 1980
AppellantCentral Board of Excise and Customs
RespondentAshok Leyland, Madras
Appellant AdvocateP. Narasimhan, Central Standing Counsel
Respondent AdvocateKrishna Srinivasan, Adv. of King and Partridge
Cases ReferredArunachalam Pillai and Sons v. State of Tamil Nadu
Excerpt:
customs act, 1962 - sections 128 & 130 (before amendment by finance (2) act 1980)--revision to central board against the order of the deputy collector is not barred if the appeal against the order is dismissed as time barred and not on merits. - - (b) where the decision or order has been passed by an officer of the customs lower in rank than a collector of customs, appeal to the appellate collector of customs :provided that, the appellate authority may, if it is satisfied that the appellant has been prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of three months......its powers of revision in this case, as the appellate authority has passed an order in the appeal filed under section 128. the question is whether the two contentions advanced by the learned counsel for the appellants could be accepted as tenable. 4. so far as the first question as regards the application of doctrine of merger is concerned, it is seen that, in this case, the respondent has no doubt filed an appeal against the order passed by the original authority to the appellate authority. but the appellate authority did not entertain the appeal, but rejected the same on the ground that it had been filed out of time. thus, there is no effective appeal before the appellate authority against the order of the original authority. it is only when the appellate authority entertains.....
Judgment:

Ramanujam, J.

1. This appeal is directed against the order of Mohan, J in W.P. No. 7472 of 1975 quashing the order, dated 25-7-1975 passed by the Central Board of Excise and Customs, New Delhi, rejecting a revision petition filed by the respondent under Section 130 of the Customs Act, 1962, and remitting the matter to the Central Board of Excise and Customs for deciding the case on merits.

2. The facts which led to the filing of the said writ petition are as follows - There was an order passed by the Deputy Collector of Customs, Madras (4th appellant herein) on 21-12-1972, under Section 14(1)(a) of the Customs Act. Against that order, the respondent filed an appeal to the Appellate Collector (second appellant). That appeal was, however, rejected as barred by limitation on 24-4-1974. Thereafter, the respondent filed a revision petition, calling it a review petition, to the Central Board of Excise and Customs (the 1st appellant). The first appellant rejected the same on 25-7-1975 on the ground that since the original order had merged with the appellate order, the revision could not be entertained. A against the said order, the respondent filed the writ petition. The learned Single Judge, who heard the writ petition, felt that the first appellant was not justified in refusing to exercise power of revision on the facts and circumstances of this case as the revisional powers had been invoked within two years from the date of the original order and therefore, it should have passed an order on merits in the revision filed by the respondent. It is in that view, he set aside the order passed by the first appellant refusing to entertain the revision and remitted the matter to the first appellant for consideration of the revision on merits. The view taken by the learned Single Judge has been questioned in this appeal.

3. According to Mr. Narasimhan, Central Government Standing Counsel, the order of the original authority, viz., the Deputy Collector of Customs, has merged with the order of the appellate authority and as such, the respondent cannot file a revision against the order of the original authority to the Central Board of Excise and Customs. Alternatively, it is contended by him that even assuming that the theory of merger is not applicable to this case, since the original order has been the subject matter of an appeal before the appellate authority, the order of the original authority cannot be revised by the revisional authority, the Central Board of Excise and Customs, under S. 130 of the Customs Act. According to the learned counsel, since Section 108 excludes an order passed in appeal under Section 128 from the purview of Section 130, the Board cannot exercise its powers of revision in this case, as the appellate authority has passed an order in the appeal filed under Section 128. The question is whether the two contentions advanced by the learned counsel for the appellants could be accepted as tenable.

4. So far as the first question as regards the application of doctrine of merger is concerned, it is seen that, in this case, the respondent has no doubt filed an appeal against the order passed by the original authority to the appellate authority. But the appellate authority did not entertain the appeal, but rejected the same on the ground that it had been filed out of time. Thus, there is no effective appeal before the appellate authority against the order of the original authority. It is only when the appellate authority entertains the appeal and deals with it on merits, the order of the original authority should be taken to have merged in the order of the appellate authority, and only in such cases, the party cannot file a revision against the order of the original authority ignoring the order passed by the appellate authority. But, in this case, there has practically been no effective appeal before the appellate authority and the order passed by the appellate authority is merely a rejection of the appeal on the ground that it is time barred. Thus, on the circumstances of this case, we are inclined to hold that the principle of merger cannot come into play. Even assuming that the principle of merger can be applied, then the revision petition filed by the respondent against the order of the original authority should be taken to be an appeal against the order of the appellate authority, for the order of the original authority should be taken to have merged with the order of the appellate authority, in which case the revision is entertainable.

5. Coming to the second question as to whether the revisional authority, acting under Section 130 of the Customs Act, could entertain a revision filed by an appellant, we are of the view that the revision is entertainable by the Board under Section 130. According to Mr. Narasimhan, learned Central Government Standing Counsel, the expression 'not being an order passed in appeal under Section 128', occurring in Section 130, will exclude all orders passed in appeal under Section 128 and as, in this case, an order has been passed by the appellate authority under Section 128, no revision should be entertained by the Board under that section directly against the order of the original authority. For the purpose of appreciating the said contention, we have to consider the scope and ambit of S. 130(1) of the Customs Act, which is as follows -

'Section 130(1) : Any person aggrieved by any decision or order passed under this Act may, within three months from the date of the communication to him of such decision or order -

(a) where the decision or order has been passed by a Collector of Customs, appeal to the Board;

(b) where the decision or order has been passed by an officer of the Customs lower in rank than a Collector of Customs, appeal to the Appellate Collector of Customs :

Provided that, the Appellate Authority may, if it is satisfied that the appellant has been prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of three months...'

This section enables the Central Board of Excise and Customer, to exercise revisional powers either suo motu or on the application of an aggrieved person, in respect of any order passed by an officer of the Customs. Therefore, the order passed by the Deputy Collector of Customs, as in this case, is a proceeding which could be revised by the Board under Section 130, but for the exclusion contained therein in respect of orders passed in appeal under Section 128. But for such exclusion, the Board could entertain a revision petition against the order passed by the Deputy Collector under Section 14(1)(a) and deal with the same on merits. Therefore, we have to consider whether the order which is made the subject matter of revision before the Board, is an order passed in appeal under Section 128. It is, no doubt, true an appeal was filed under Section 128 to the appellate authority against the order of the original authority, viz, the Deputy Collector. But that appeal was not entertained, but was rejected as out of time. The question is whether such an order will come within the expression of 'an order passed in appeal under Section 128'. An order could be taken to have been passed in appeal under Section 128, only if the appellate authority has passed an order either confirming, modifying or annulling the decision or order appealed against. An order dismissing appeal as out of time cannot be said to be an order passed under Section 128. No doubt, even an order rejecting an appeal may be construed as an order passed under Section 128, for the appellate authority has no other power except the power conferred under Section 128; when it rejects the appeal as time barred; but that will not be an order in appeal filed under Section 128, for an order in appeal can only mean an appellate order on merits. Since the appellate authority has rejected the appeal as time barred, it should be taken that there has been no effective appeal and as such, there is no order in appeal as contemplated by the expression 'order passed in appeal under Section 128' occurring in Section 130.

6. In more or less similar circumstances, this court in Srinivasalu Naidu v. Commissioner of Income Tax - : [1948]16ITR341(Mad) dealing with the scope of Section 33A of the Income-tax ACT, held that the expression 'made the subject of an appeal' occurring in that section should be understood as the subject matter of an effective appeal, and that if an appeal to the Appellate Tribunal is not admitted or is disposed of on the ground that it is filed after the prescribed time, the order cannot be said to be the subject of an appeal as, Section 33A of the Income-tax Act excluded, from the purview of revisional powers, orders which have been made the subject of an appeal before the Appellate Tribunal. There also, an appeal was filed before the Tribunal, but that was rejected as out of time. The question was whether a revision could be filed under Section 33A of the Income-tax Act, against the order of the Appellate Assistant Commissioner which has been made the subject of an effective appeal before the Tribunal. The said decision squarely applied to the facts of this case. The principle of the said decision was applied by this Court in Erode Yarn Stores v. State of Madras, 14 STC 724. In that case, the scope of Section 34(2)(b) of the Tamil Nadu General Sales Tax Act, 1959 was considered. That decision also contained an exclusion in respect of orders which have been made the subject of an appeal. There also, it was held that where a petition to condone the delay in filing an appeal is rejected by the Tribunal and the appeal is also rejected in limine, it cannot be said that the order has been made the subject of an appeal to the Appellate Tribunal, within the meaning of Section 34(2)(b) of the Act.

7. A Full Bench of this court again, in Arunachalam Pillai and Sons v. State of Tamil Nadu - 45 STC 109 FB, had to consider the scope of suo motu powers of revision contained in Section 32 of the Tamil Nadu General Sales Tax Act, 1959. Sect. 32 conferred on the Deputy Commissioner a power of revision in respect of orders passed by any subordinate authority, except in respect of orders which have been made the subject of an appeal before the Sales Tax Appellate Tribunal. In that case, there was an appeal to the Appellate Tribunal which was rejected on the ground of limitation. The question was whether the affected party could file a revision against the original order notwithstanding the filing of an appeal before the Sales Tax Appellate Tribunal which stood rejected. The Full Bench, while considering the scope of Section 32, held that an appeal contemplated under Section 32(2)(b) must be an effective appeal and not one which was rejected or refused to be entertained on the ground of limitation and that where an appeal before the Appellate Assistant Commissioner or the Tribunal against an assessment order was dismissed on the ground of limitation, it cannot be said that the order of assessment had been the subject of an appeal to the Appellate Assistant Commissioner or the Tribunal within the meaning of the said section and therefore, the Deputy Commissioner would have jurisdiction under Section 32 to entertain a revision against the assessment order. This Full Bench decision squarely applies to the facts of this case.

8. We are, therefore, of the view that, in this case, since there was no effective appeal before the appellate authority under Section 128, there is no bar for the application of Section 130. Therefore, on the facts and circumstances of this case, the Board should have entertained the revision petition filed by the respondent. In this view, we are not in a position to interfere with the order of the learned single Judge directing the first appellant to entertain the revision petition and deal with the same on merits. The writ appeal is, therefore, dismissed. There will be no order as to costs. Since the time fixed by the learned Judge for the disposal of the revision petition had already expired, we grant three months time from the date of receipt of this judgment for disposal of the revision petition by the first appellant.


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