TRIBUNAL CANNOT SUO MOTU REOPEN THE MATTER AFTER PRONOUNCING DECISION

[Mr. M. GOVINDARAJAN]

In this article the point for discussion is whether the Tribunal can reopen the matter after it pronounces its decision with reference to decided case law.

Rule 26 of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 provides that every order of the Tribunal shall be in writing and shall be signed and dated by the Members constituting the Bench concerned.   Last date of hearing of the matter shall be typed on the first page of the order.   If the order is dictated on the Bench, the date of dictation will be the date of the final order.   If the order is reserved, the date of final order will be the date on which the order is pronounced.

In cases, where gist of the decision is pronounced without the detailed order, the last para of the detailed order shall specify the date on which the gist of the decision was pronounced.   In such cases, the date of the final order shall be the date on which all the Members of the Bench sign the order.   If they sign on different dates, the last date of the dates will be the date of order.

Rule 26 clearly specifies the date of order passed by the Tribunal in various circumstances. But the Rules do not provide to reopen the matter after pronouncing the decision by the Tribunal.  

In ‘Commissioner of Customs (SEA), Chennai V. C.P. Aqua Culture (India) Private Limited’ – 2012 (4) TMI 185 - MADRAS HIGH COURT the assessee filed the second appeal before the CESTAT against the order of Commissioner of Customs, Chennai, dated 10.11.2008. The Tribunal posted the hearing on 4.6.2009.   On that day, after hearing both parties, the Tribunal pronounced the order in the open court allowing the appeal and the gist of the order was recorded and signed by the Members on 04.06.2009.   However the matter was entrusted to the Member (Technical) for drafting a detailed order giving reasons.

The Technical Member vide internal office note dated 22.6.2009 posted for re-hearing of the case on 30.06.2009.   Against this the assessee filed a writ petition before the High Court with the prayer for a direction to the Appellate Tribunal to pass the detailed order in line with the pronouncement made in the open court and gist of decision recorded and signed on 4.6.2009.

The Single Judge, on consideration of the submission of the parties and the materials placed in record allowed the Writ petition directing the Appellate Tribunal to pass a detailed order in the appeal filed by the assessee in consonance with the gist of the decision pronounced, recorded, signed and dated in open court on 4.6.2009 within 15 days from the date of receipt of the order.

The Revenue, being aggrieved against this order filed the present appeal.   The Revenue contended the following:

• The Tribunal immediately after hearing the appeal on 4.6.2009 observed that ‘appeal allowed’ without gist of the order;
• It is the only formal expression of the Tribunal to allow the appeal in the open court without dictating any reasoned order and such an order announced in open court but not followed by a detailed written order giving reasons, is not a valid order in the eye of the law;
• The note dated 22.6.2009 given by the Technical Member for re-hearing of the appeal was accepted by the President (Judicial Member) and, therefore, no interference of the Court was sought;
• The Tribunal may be allowed to rehear the appeal as gist of the order was not passed on 04.06.2009.

 The assessee contended the following:

• The operative portion/gist of the decision finally pronounced in the open court after hearing the arguments and the Order Sheet is duly signed by both the Members, the appeal before the Appellate Tribunal had attained finality and the same cannot be posted for rehearing;
• Once the Tribunal becomes functus officio, it cannot modify or alter the decision already pronounced in the open court;
• The Single Judge has rightly appreciated the facts in its proper perspective and sought for dismissal of the appeal.

The High Court held that the order was pronounced in the open court on 4.6.2009 as ‘Appeal Allowed’ and last hearing date was recorded as 04.06.2009, an endorsement has been made by the Vice President to the Member (Technical) to the effect ‘for orders please’ from which it is clear that the matter was entrusted to the Member (Technical) for drafting a detailed order.   Therefore there cannot be any dispute that 04.06.2009 is the last date of hearing.

It is seen that the Member (Technical) instead of passing a reasoned order, vide internal note dated 22.06.2009, posted the matter for re-hearing on 30.06.2009 and the order made to that effect may be usefully extracted below:

“We allowed the appeal accepting the Counsel’s plea that ratio of Virlon case is that the cap of 50% of FOB value for benefit of Notification No.2/95-CE did not apply and hence though there were no exports, benefit 2/95-CE was available to DTA clearances which was denied by the Commissioner in the order impugned.   It appears that ratio of Virlon is that 50% cap applied to DTA sales under para 9(b) of Policy, such cap did not apply to DTA sales against foreign exchange; other supplies of para 10(b) of Policy.   Policy prescribed cap only in respect of 9(b) sales; such restriction was not there in Policy in para 10(b).   Court did not overrule the cap of 50% of FOB value in respect of DTA sales against Indian rupee prescribed in 2/95-CE,. We may rehear”.

In the above order, the Court found that the Vice President, who is a Judicial Member, has also signed which shows that the Technical Member’s note to rehear the appeal was fully accepted by the Vice President of the Tribunal and therefore, the appeal was posted for rehearing. The High Court held that it cannot be disputed that reopening of the matter for rehearing suo motu at the instance of the members of the Bench cannot have legal approval.

In the meanwhile, the Court observed that the President of the Tribunal issued Circular No. 4/2009, dated 17.7.2009 with regard to the time gap for hearing of the arguments and delivering the judgment in a matter which says that on expiry of period of 3 months without the order being delivered and pronounced from the day of conclusion of the hearing of the arguments in a matter, such matter shall be deemed to have been ‘not heard’ and will have to be listed for fresh hearing only after obtaining prior order in writing in that regard from the Hon’ble President.

The Court also referred to another document signed by the Registrar, CESTAT, Chennai which provides that once the Tribunal has disposed of the matter finally, the Tribunal renders itself functus officio in relation to such matter and cannot suo motu recall the final order and interfere therein.   Therefore question of refixing the matter in question does not arise.

The High Court held that as seen from the facts and circumstances of the case, if, for any reason, the matter is kept pending after pronouncement of the result or gist of the judgment, for giving a reasoned order by the Member (Technical), he should have taken up the matter at the first instance.   Instead he took a different view and posted the matter for rehearing.

The Court set aside the order of the Single Judge.