1995 (9) TMI 148 - AT - Central Excise

Summary

Issues Involved:
1. Whether a two-member bench can hear a rectification of mistake (ROM) application against a final order passed by a three-member bench.
2. Interpretation and application of Rule 31A of the CEGAT (Procedure) Rules, 1982.
3. Scope of the President's power to constitute benches under Section 35D of the Central Excises and Salt Act.

Issue-wise Detailed Analysis:

1. Whether a two-member bench can hear a rectification of mistake (ROM) application against a final order passed by a three-member bench:

The applicant argued that a smaller bench cannot rectify or review the decision of a larger bench, citing the Supreme Court decision in Pandurang v. State of Maharashtra. The applicant contended that Rule 31A of the CEGAT (Procedure) Rules, 1982, which states that "the members who heard the appeal" should hear the ROM, implies that the same number of members must hear the application. The applicant also argued that Section 35D of the Central Excises and Salt Act does not cover the procedure for hearing ROM applications, which is exclusively governed by Rule 31A.

The opposing view, represented by the Departmental Representative, maintained that the President has the authority to constitute benches, including for hearing ROM applications, and that the issue of jurisdiction should be settled before addressing the merits.

2. Interpretation and application of Rule 31A of the CEGAT (Procedure) Rules, 1982:

The majority opinion held that Rule 31A allows the President to direct otherwise, meaning the President can constitute a different bench for hearing ROM applications. The President's power under Rule 31A was found to be wide enough to accommodate the current situation, where the original members were unavailable due to retirement or elevation. The majority also noted that the provisions in the Rules cannot override the powers vested by the statute, as the Rules are subordinate legislation.

The dissenting opinion argued that any ROM application should be heard by a bench of the same number of members as the original bench, asserting that the ROM application has the potential to modify or amend the original order. This view emphasized that the procedural integrity and consistency require the same number of members in the bench hearing the ROM application.

3. Scope of the President's power to constitute benches under Section 35D of the Central Excises and Salt Act:

The majority opinion referenced the larger bench decision in Atma Steels Pvt. Ltd. and Others v. Collector of Central Excise, which held that the President has plenary powers to constitute benches for the Tribunal's effective functioning. The Supreme Court in Union of India v. Paras Laminates (P) Ltd. also endorsed this view, stating that the President's power to constitute benches is essential for the Tribunal's effective and expeditious discharge of its functions.

The dissenting opinion acknowledged the President's power to constitute benches but argued that this power should not extend to altering the composition of the bench for hearing ROM applications, especially when the original bench consisted of three members.

Separate Judgments:

- Majority Judgment (Member (T) and third Member (J)): Held that the present application for rectification of mistake could be heard by a bench of two members as constituted by the President. The majority found no infirmity in the President's direction and emphasized the President's wide-ranging powers under the statute and Rule 31A.

- Dissenting Judgment (Member (J)): Argued that the ROM application should be heard by a bench consisting of three members, as the original appeal was heard by a three-member bench. The dissent emphasized procedural consistency and the potential impact of the ROM application on the original order.

Final Order:

In view of the majority opinion, it was held that the ROM application could be heard by a bench of two members as constituted by the President. The Registry was directed to fix a suitable date for the hearing of the ROM on merits and notify the parties accordingly.