POWERS TO REMAND CASES

[Dr. Sanjiv Agarwal]

Commissioner’s Remand Powers

The power to order remand is indeed an invaluable power of an appellate court which goes a long way in enabling the court to serve the ends of justice. The primary objective of conferring power to remand on Tribunal is to widen its powers in the interests of justice.

Section 35A(3) of Central Excise Act, 1944 was amended w.e.f. 11.5.2001 to withdraw the power Commissioner (Appeals) to remand cases for fresh adjudication to the original adjudication authority. An such, the Commissioner (Appeals) shall after making such further enquiry, as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Supreme court in case of MIL India Ltd 2007 (3) TMI 8 - SUPREME COURT OF INDIA while noting that the power of remand had been taken away, categorically stated that the Commissioner (Appeals) continues to exercise the power of adjudicating authority in the assessment matters and any order of Commissioner (Appeal) could also be treated as an order of assessment.

Any case is said to be remanded when an appellate court sends an appellate case back to the lower court for further action (http://www.lectlaw.com). This usually happens if an error occurs, which demands a new trial or hearing in the interest of justice. By passing an order of remand, an appellate authority directs the lower court to reopen and retry the case. On remand, the lower court will readmit the suit under its original number in its register and will proceed to determine it as per the directions issued by the appellate authority [CK Takwani, Civil Procedure (Lucknow: Eastern Book Company, 2000) at 286].

The Commissioner (Appeal) does not have power to remand cases. The Commissioner (Appeals) shall after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Punjab & Haryana High Court has held that Commissioner (Appeals) has been divested of the power to remand cases back to the adjudicating authority after deletion of that power in section 35A(3) of Central Excise Act, 1944 in 2001. [Enkay (India) Rubber Co. Pvt. Ltd; 2007 (3) TMI 276 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CCE Jallandhar v. B C Kataria 2007 (9) TMI 167 - HIGH COURT OF PUNJAB & HARYANA]. Supreme Court in MIL India Ltd 2007 (3) TMI 8 - SUPREME COURT OF INDIA also held that power of remand by the Commissioner (Appeals) has been taken away by amending section 35A w.e.f. 11.5.2001. It also stated that the Commissioner (Appeals) continues to exercise the power of adjudicating authority in the matter of assessment and he can add or subtract certain items from the order of assessment made by the adjudicating authority and that the order of the Commissioner (Appeals) could also be treated as order of assessment

In CCE v. Karaikal Chlorates 2010 (9) TMI 362 - CESTAT, CHENNAI, it was held that since power of Commissioner (Appeal) to remand is taken away with amendment to section 35A of Central Excise Act, 1944, Commissioner does not have any power to remand. However, since grievance of contravention of the principle of natural justice still remained while setting aside the impugned order, case was to be remanded to adjudicating officer. [Also see in CCE, Madurai v. Kodai Automobile Ltd. 2010 (8) TMI 251 - CESTAT, CHENNAI, Commissioner of Service Tax, Delhi v. G.B. Professional Associates Pvt. Ltd. 2010 (12) TMI 405 - CESTAT, NEW DELHI; Commissioner of Service Tax, Kolkata v. Bahubali International Ltd. 2013 (5) TMI 644 - CESTAT KOLKATA]

In CCE, Bangalore v. Mavenir Systems (P) Ltd. 2012 (11) TMI 868 - CESTAT, BANGALORE, wherein Commissioner (Appeals) allowed assessee’s appeal on merits but remanded case back to adjudicating authority for re-quantification of demand, for which Commissioner (Appeals) did not have authority to remand case back, it was held that remitting case back to adjudicating authority for re-quantification of demand does not amount to remand in view of Board’s Circular No. 120/1/2010-ST dated 19/01/2010.

In Greenspan Agritech Pvt. Ltd. v. CCE Pune-I 2011 (7) TMI 748 - CESTAT, MUMBAI, it was held that there is no power in the statute book to the Commissioner (Appeals) to remand the case to the adjudicating authority [MIL India Ltd. v. CCE, Noida 2007 (3) TMI 8 - SUPREME COURT OF INDIA followed].

In CST, Kolkata v. Devansh Exports 2012 (8) TMI 470 - CESTAT, KOLKATA, in case of service tax, it was held that Commissioner (Appeals) has no power to remand matter and he has to decide matter by himself.

Remand by Tribunal

In Vah Auto(P.) Ltd. v. CCE&ST 2014 (1) TMI 1521 - ALLAHABAD HIGH COURT, it was held that Section 35C empowers Tribunal to remand case back with such directions as Tribunal

may think fit and said ‘directions’ may, in an appropriate case and subject to reasons, include an order of pre-deposit to protect interest of revenue.

In Net Hawk Networks India (Pvt.) Ltd. v. Commissioner of Central Excise, BBSR-I 2013 (5) TMI 315 - CESTAT KOLKATA,it was held that where Commissioner (Appeals) had upheld orders passed by Adjudicating Authority rejecting refund claim of assessee, while for subsequent period, refund claim involving same input services was allowed by him, matter was required to be remanded back to Commissioner (Appeals).

In Competent Software Pvt. Ltd. v. CST, New Delhi (2013 (2) TMI 696 - CESTAT DELHI), where documents were not verified at adjudication stage and department agreed to grant an opportunity to assessee to reduce dispute at grass root level and in view of limited opportunity of rebuttals, matter was remanded back to re-examine issue of input credit admissibility after considering relevant documents.

In Oxford Processors Pvt. Ltd. v. CCE, Haldia 2013 (10) TMI 170 - Calcutta High Court, it was held that upsetting reasoned order of Commissioner (Appeals) was not permissible unless those reasons are absurd and perverse on facts/ circumstances of case. Hence, matter was remanded to Cestat to hear it and give reasons.

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Discussions to this article

[raj kumar shukla]

Does it also apply to orders in appeal passed under service tax ? the relevant law uses words "PASS SUCH ORDER AS HE THINKS JUST AND PROPER" Only and there is no mention of "CONFIRMING MODIFYING OR ANNULLING" .