2009 (6) TMI 318 - HC - Central Excise

Whether the Appellate Tribunal was right in holding that the appellant was not an aggrieved person and consequently had no locus standi to file the appeal against the order impugned before it? - case as noted the appellant had purchased goods on which earlier it was assumed that no excise duty was payable. Then a Bank guarantee was obtained from the appellant that in the event the excise duty was demanded then he will reimburse O.N.G.C. O.N.G.C. took up the matter in appeal up to the Commissioner (Appeals) and thereafter did not take any steps. It is the Petitioner who has to pay the excise duty. - In our opinion such person can be said to be person aggrieved as prejudice has been occasioned to him by O.N.G.C. in not preferring an appeal and the appellant having to pay the excise duty which in his opinion is not payable. Tribunal s order that only manufacturer is entitled to prefer an appeal under Central Excise Law is not sustainable - Held that the person aggrieved who is allowed to prefer an appeal would only be entitled to prefer appeal to the extent of the prejudice suffered by inaction of the original assessee through whom he claims the relief. - . The question of law as framed would have to be answered in the negative against the Revenue and in favour of the assessee.

Summary

Issues Involved:
1. Whether the appellant had locus standi to file the appeal before the tribunal.
2. Interpretation of the term "person aggrieved" under Section 35B of the Central Excise Act.
3. The tribunal's misinterpretation of previous judgments and statutory provisions.

Issue-Wise Detailed Analysis:

1. Locus Standi to File the Appeal:
The core issue was whether the appellant had the locus standi to file an appeal against the order passed by the Commissioner (Appeals). The appellant contended that under Section 35B of the Central Excise Act, their appeal was maintainable. The tribunal, however, dismissed the appeal on the grounds that the appellant was not a "person aggrieved" and thus had no locus standi. The High Court noted that the matter had previously been remanded to the tribunal with directions to consider the appellant's application for leave to file an appeal, demonstrating the prejudice suffered. The tribunal misdirected itself by re-examining the issue of locus standi, which had already been addressed in the remand order. The High Court concluded that the appellant had demonstrated sufficient prejudice, as they were required to pay excise duty due to ONGC's inaction in filing an appeal.

2. Interpretation of "Person Aggrieved" under Section 35B:
Section 35B of the Central Excise Act allows "any person aggrieved" by certain orders to appeal to the Appellate Tribunal. The High Court emphasized that the legislature used the term "any person aggrieved" rather than "manufacturer," indicating a broader scope. The Supreme Court in Northern Plastics Ltd. v. Hindustan Photo Film Mfg. Co. Ltd. had noted that "person aggrieved" has a wider meaning than "party aggrieved." Various dictionary definitions and judicial interpretations were cited to support this broader interpretation. The High Court concluded that the appellant, having suffered prejudice and financial loss due to the excise duty demand, qualified as a "person aggrieved" under Section 35B.

3. Tribunal's Misinterpretation of Judgments and Statutory Provisions:
The High Court found that the tribunal misread the Supreme Court's judgment in Northern Plastics Ltd. and erroneously concluded that only parties to the original proceedings could appeal. The tribunal also incorrectly held that only manufacturers could maintain an appeal under the Central Excise Act. The High Court clarified that the right to appeal is not limited to manufacturers but extends to any person who can demonstrate direct and adverse effects from the impugned order. The tribunal's failure to follow the remand order and its misinterpretation of legal precedents rendered its decision flawed.

Conclusion:
The High Court set aside the tribunal's order, holding that the appellant had locus standi and was a "person aggrieved" under Section 35B of the Central Excise Act. The question of law was answered in the negative against the Revenue and in favor of the assessee, allowing the appellant to file the appeal. The tribunal was directed to consider the appeal on its merits, acknowledging the appellant's demonstrated prejudice and financial burden due to the excise duty demand.