ONCE THE COMMITTEE OF COMMISSIONERS DECIDES NOT TO APPEAL ANY ORDER THERE IS NO POWER WITH THE SUBSEQUENT COMMITTEE TO REVIEW THE EARLIER ORDER OF THE COMMITTEE OF COMMISSIONERS

[Mr. M. GOVINDARAJAN]

            In case of appeal to be filed by the Central Excise Department the Committee of Commissioners will decide to file appeal against any order. Once the decision is taken by the said committee the decision will not be changed later on. Further the subsequent committee cannot review the earlier order of the Committee of the Commissioners. This has been confirmed in 'Commissioner of Central Excise, Surat - II V. Gujarat Borosil Limited' - 2009 (238) ELT 201 (Tri. Ahmd).

            In this case the issue relates to the inclusion of cost of wooden crates used for special/secondary packing in respect of the glass sheets manufactured and cleared by the respondents.  Commissioner (Appeals) while holding in favour of the assessee has relied upon the earlier two orders passed earlier which were in favour of the assessee. The order dated 08.03.2006 against which the appeal was made was received by the Revenue on 10.3.2006. The Committee of Commissioners looked into the same and decided that the same is in accordance with law and as such no appeal is required to be filed there against. Accordingly Committee of Commissioners accepted the present order in appeal and no appeal was filed thereafter.

            However subsequently the Hon'ble Supreme Court in the case 'Commissioner of Central Excise, Allahabad V. Hindustan Safety Glass Works Ltd.,' - 2005 -TMI - 47217 - (SUPREME COURT OF INDIA) held that cost of packing material of the nature as was subject matter of the present appeal was includable in the assessable value as it is necessary to put the goods in the condition in which it was sold in wholesale market.   However it was fairly accepted by the Department that the said decision was available when the impugned order was passed by the Commissioner (Appeals) in favour of the assessee and also at the time when Committee of Commissioners decided not to appeal against the said order.

            The assessee subsequently filed claim of refund as a consequence of passing of the order of Commissioner (Appeals), the same was rejected by the adjudicating authority.  The said order was appealed against before Commissioner (Appeals), who set aside the same on the ground that the earlier decision stands final inasmuch as no appeal was filed by the Department.   It was at this stage that the Revenue realized the effect of not filing any appeal against the earlier order of Commissioner (Appeals) and which is subject matter of the present appeal. Accordingly the earlier decision of Committee of Commissioners was reviewed by a subsequent Committee of Commissioners and the matter was reopened, appeal filed, with prayer to condone the delay of 440 days.

            For the condonation of delay of 440 days the Revenue relied on the following judgments:

·  C.K. Gangadharan V. Commissioner of Income Tax, Cochin - [2008 -TMI - 4694 - SUPREME COURT] - The Supreme Court held that non filing of appeals in similar cases does not bar filing appeal in other cases;

·  State of Nagaland V. Lipok Ao - 2005 (183) ELT 337 (SC) - The Supreme Court has observed that the proof by sufficient cause is a condition precedent for exercise of the extraordinary restriction vested in the court.   What counts is not the length of the delay but the sufficiency of the cause and shortness of the delay is one of the circumstances to be taken into account in using the discretion.  What constitutes sufficient cause cannot be laid down by hard and fast rules and the discretion vested in the courts cannot be defined or crystallized so as to convert a discretionary matter into a rigid rule of law.   The expression 'sufficient cause' should receive a liberal construction and unless want of bona fides of such inaction or negligence as would deprive a party of the protection  of Section 5 is proved, the application must be thrown out or any delay cannot be refused to be condoned;

·  Collector, Land Acquisition V. Katiji - 1987 (28) ELT 185 (SC) - The Supreme Court lays down that liberal approach is required to be adopted for condonation of delay and the principles required to be followed were laid down. It was observed that ordinarily litigant does not stand to be benefited by late filing of an appeal and refusal to condone the delay can result in a meritorious matter being thrown out at the very threshold. 

·  Bhag Singh & Others V. Major Daljit Singh & Others - 1987 (32) ELT 258 (SC) - The Supreme Court observed that the court should not take too strict and pedantic stands which will cause injustice and such applications for condonation of delay should be considered from the point of view which will advance the cause of justice.

The Revenue submitted that inasmuch as in the present case the important issue of law, which prima facie stands decided by the Hon'ble Supreme Court against the assessee is involved, delay may be condoned and appeal be taken on record.

      The respondent submitted the following:

·        The present impugned order was considered by the Committee of Commissioners and a decision was taken not to file any appeal there against;

·        The order relied upon by the Revenue in the case of M/s Hindustan Safety Glass Works Ltd., (supra) is not an order passed subsequent to the impugned order but was holding the field even on the date when Committee decided not to file any appeal against the impugned order;

·        The order in M/s Hindustan Safety Glass Works Ltd., (supra) is not applicable to facts of the present case;

·        Once the Committee of Commissioners decides not to appeal any order, there is no power with the subsequent committee to review the earlier order of the Committee of Commissioners;

·        The subsequent Committee decided to file an appeal against the earlier order of the Commissioner (Appeals), only when he allowed the subsequent refund proceedings in their favour.   This reflects the intention of the Revenue to deny them the consequent relief by way of refunds and the present proceedings are only with an intention to undo the effect of the earlier order.

The tribunal found that the present case is not a simple and regular case of condonation of delay in filing the appeal by the Revenue. The tribunal is aware of the various decisions of the Hon'ble Supreme Court observing that keeping in view the slow pace adopted by the Government officers/agencies and encumbered process of pushing the files from one table to another consume delay, intentional or otherwise, considerable delay of procedural red tape in the process of their making decision is a common feature and as such certain amount of latitude is not impermissible.  The sufficient cause therefore is required to be considered with pragmatism in justice oriented approach rather than the technical detection of sufficient cause for explaining every day's delay.

            The tribunal found that the Supreme Court's decision in 'M/s Hindustan Safety Glass Works Ltd., (supra) was available at the time when the impugned order of Commissioner (Appeals) was passed and as such, the Revenue could have filed an appeal against the order of Commissioner (Appeals) in time. The said decision was considered by the Committee of Commissioners for the purposes of filing of appeal there against and conscious decision was arrived at by them not to file an appeal there against.  The said decision was subsequently reviewed by another Committee of Commissioners after a period of almost 2 years and they decided to challenge the present impugned order. As such a question arises as to whether such subsequent decision was a bona fide decision on the part of the Committee of Commissioners and subsequently whether they are empowered to review the earlier decision of Committee of Commissioners.

            The tribunal found that the Committee decided to challenge the present order of Commissioner (Appeals) only after he passed a subsequent order setting aside another order passed by original adjudicating authority of refusing to grant refund as a consequence of the earlier order passed by the Commissioner (Appeals).  This leads the tribunal to believe that the decision on the part of the Revenue was not a bona fide one and the delay in filing the appeal cannot be held to be a delay on account of any bona fide sufficient cause.   The Revenue cannot be permitted to adopt such routes to deny consequent benefit of the orders passed by its own authorities, which had attained finality on account of not having been appealed against.

            In 'Commissioner of Central Excise V. Apsco Prefabs Pvt. Ltd., - 2008 -TMI - 48208 - (HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH) the Court held that once jurisdictional Commissioner accepted order passed by first appellate authority and decided for not filing an appeal against the same, he cannot review his order by changing his mind without giving any valid reasons. 

There are no powers in terms of the provisions of Central Excise Act to revise such decision even by the Board inasmuch as after such acceptance of the order, the Committee becomes functus officio. In 'Commissioner of Customs V. Madurai Coats Private Ltd., - 2007 (216) ELT 86 (Tri. Chennai) it was held that once the Committee accepts the order, the same cannot be reviewed or re-opened by another Committee and the review Committee is not empowered to review its directions to give fresh directions in respect of the same order.

            In view of the above the tribunal found no merits to condone the delay of 440 days and accordingly rejected the application filed by the Department. As a consequence, appeal also gets dismissed.