2014 (9) TMI 225 - SC - Central Excise

Classification of goods - Classification under Entry 87.02.00 or under 87.03.00 - Held that - Since two Benches of the same strength of Members have taken two conflicting views, we are of the opinion, that judicial discipline requires that instead of disagreeing with the view taken by the first Bench, the appropriate course for the second Bench would have been to refer the matter to a larger Bench. This is the basic requirement of judicial discipline. Since this has not been done, we set aside both orders and remand both the appeals back to the Tribunal and request its President to constitute a larger Bench of three Members to decide the issue whether the vehicles manufactured by the assessee falls under Entry 87.02.00 or 87.03.00 of the Act. Decided in favour of Revenue.

Summary

Issues: Conflict of opinion between two Benches of the Customs Excise and Service Tax Appellate Tribunal regarding the classification of vehicles under the Central Excise Tariff Act, 1985.

Analysis:
The Supreme Court addressed the conflict between two Benches of the Customs Excise and Service Tax Appellate Tribunal (the Tribunal) concerning the classification of vehicles manufactured by the assessee. In one appeal, the Tribunal classified the vehicles under Entry 87.02.00 of the Central Excise Tariff Act, 1985, while in another appeal, the classification was under Entry 87.03.00 of the Act. The Court emphasized the importance of judicial discipline in such situations where conflicting views arise among the Tribunal benches of the same strength. The Court held that instead of disagreeing with the first Bench's view, the appropriate action for the second Bench should have been to refer the matter to a larger Bench for resolution. Due to the failure to follow judicial discipline, the Supreme Court set aside both orders and remanded the appeals back to the Tribunal. The Court requested the Tribunal's President to constitute a larger Bench of three Members to decide whether the vehicles manufactured by the assessee fall under Entry 87.02.00 or 87.03.00 of the Act.

The Supreme Court clarified that it did not express any opinion on the merits of the case, allowing both parties to present their contentions in support of their respective positions. The interim order issued by the Court in a related matter was to continue until the Tribunal's final disposal of the appeals. Additionally, considering the relevance of the Classification List of 1992 in the matters at hand, the Court urged the Tribunal to expedite the hearing of the appeals. Ultimately, the appeals were disposed of without any costs being awarded, emphasizing the need for a consistent and disciplined approach in judicial decision-making processes.