2007 (7) TMI 301 - AT - Service Tax

Appeal by department held that - Keeping in view the rule of interpretation we are of considered opinion that to do justice removing injustice curing of technical defect is also permissible. While holding so we also hold that the Commissioner himself is not prevented to exercise the right of filing of appeal on behalf of Union of India signing the Appeal Memorandum himself without authorising an officer to do so. Any interpretation contrary to this may lead to disaster and disharmony and leave a wrong unremedied taking away right of appeal. - The Registry is directed to place these cases before the Hon ble President for; constitution of a Larger Bench and upon decision by that Bench the matters shall be decided on the facts and circumstances of each case.

Summary

Issues Involved:
1. Maintainability of appeals filed directly by the Commissioner prior to the 2005 amendment to Section 35B(2) of the Central Excise Act, 1944, and Section 129A(2) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Maintainability of Appeals Filed Directly by the Commissioner:

Arguments and Legal Provisions:
The core issue revolves around whether the Commissioner could directly file appeals against the Orders of the Commissioner (Appeals) before the 2005 amendment. Section 35B(2) of the Central Excise Act, 1944, and Section 129A(2) of the Customs Act, 1962, prior to the amendment, allowed the Commissioner to direct an authorized Central Excise Officer to file an appeal on his behalf if he found an order not legal or proper.

Section 35B(2) of the Central Excise Act, 1944:
"The Commissioner of Central Excise may, if he is of opinion that order passed by the Appellate Commissioner of Central Excise under Section 35, as it stood immediately before the appointed day, or the Commissioner (Appeals) under Section 35A, is not legal or proper, direct any Central Excise Officer authorised by him in this behalf... to appeal on his behalf to the Appellate Tribunal against such order."

Section 129A(2) of the Customs Act, 1962:
"The Commissioner of Customs may, if he is of opinion that an order passed by the Appellate Commissioner of Customs under Section 128, as it stood immediately before the appointed day, or by the Commissioner (Appeals) under Section 128A, is not legal or proper, direct the proper officer to appeal to his behalf to the Appellate Tribunal against such order."

Contentions:
- For the Appellant: Dr. Samir Chakraborty argued that the Commissioner must authorize a Central Excise Officer to file the appeal and cannot file it directly. He cited the Tribunal's decision in C.C.Ex., Surat-I v. Shree Ganesh Dyeing & Printing Works, which held that appeals filed directly by the Commissioner are not in accordance with Section 35B(2).

- For the Department: Shri N.C. Roychowdhury contended that the Commissioner, who has the authority to direct an officer to file an appeal, inherently possesses the power to file the appeal himself. He cited the Tribunal's decision in Commissioner of Customs-II, New Delhi V. Raj Kumar Madan, which held that the Commissioner could file the appeal directly.

Judgment Analysis:
The Tribunal examined the statutory provisions and the arguments presented. It noted that the right to appeal is a statutory right granted to both sides, and procedural irregularities should not deny this right. The Tribunal emphasized a purposive interpretation of the statute, aiming to advance the object and purpose of the enactment.

Key Observations:
- Principal-Agent Relationship: The Tribunal observed that a principal (the Commissioner) who has the right to delegate an act to an agent (Central Excise Officer) retains the power to perform the act himself. This delegation is directory, not mandatory, and does not abrogate the principal's power.

- Procedural vs. Substantive: The Tribunal differentiated between substantive power (the decision to file an appeal) and procedural requirements (authorizing an officer). It held that procedural irregularities should not invalidate the substantive right to appeal.

- Rule of Interpretation: Citing the Supreme Court's decisions, the Tribunal underscored that statutes should be interpreted to promote the legislative intent and avoid injustice. It referenced the principle that courts should interpret statutes to advance their purpose, even if it means departing from the plain meaning of the words.

Conclusion:
The Tribunal concluded that the Commissioner has the right to file an appeal directly without authorizing another officer. It held that any contrary interpretation would lead to injustice and deprive the Commissioner of the statutory right to appeal. The matter was referred to a Larger Bench to reconcile divergent views and ensure a consistent interpretation of the law.

Referral to Larger Bench:
Due to divergent views in previous decisions, the Tribunal referred the batch of appeals to a Larger Bench for a definitive resolution. The Larger Bench would consider the Tribunal's observations and the arguments presented to reconcile the conflicting interpretations.

Pronouncement:
The judgment was pronounced in the court on 4-4-2007.