2013 (7) TMI 55 - HC - Customs

Appeal against the majority decision of CESTAT - two members differ on the issue - held that - Once the learned third member found that point of difference of opinion has not been formulated by the two Members of the Bench then the learned third Member was required to send the matter back to the Division Bench for formulating the point of difference of opinion and only after the point of difference of opinion was formulated, decide that question. The learned third member could not say that though difference of opinion has not been framed, he has to agree or disagree with the Member and accordingly he has agreed with the judicial Member. In Colourtex v. Union of India 2006 (1) TMI 139 - HIGH COURT OF GUJARAT it was held that exact differences has to be formulated by members of the Division Bench of the Tribunal and it is not open to them to formulate a question as to whether the appeal is to be rejected or remanded for a fresh decision for determination of duty, confiscation and penalty etc. Matter remanded back to the differing Member of the Tribunal to formulate point of difference in a manner required under the law and thereafter refer the matter to learned third member for decision.

Summary

Issues:
1. Whether an order can be passed by a majority, including the third member, when the third member holds that no specific point of difference has been placed before them?
2. Whether the third member should consider all aspects when a difference arises between two members of the Tribunal?
3. Whether judicial precedents on similar issues need to be followed?

Analysis:
1. The case involved a tax appeal where there was a difference of opinion between two members of the Division Bench. According to Section 129C(5) of the Customs Act, in case of a difference of opinion, the point of difference was required to be stated by the members, and the matter was to be decided by a third member. The relevant part of Section 129C(5) states that if the members are equally divided, they shall state the point or points on which they differ. The opinion of the third member would form part of the majority decision.

2. The third member in this case found that the point of difference of opinion had not been formulated by the two members of the Bench. The third member was required to send the matter back to the Division Bench for formulating the point of difference of opinion. It was noted that the approach of the third member in agreeing or disagreeing without a formulated point of difference was not correct in law. The case of Colourtex v. Union of India was cited to emphasize the need for precise formulation of differences by the members of the Division Bench.

3. The Court held that the order passed by the third member and the difference of opinion expressed without a precise formulation of the point of difference could not be entertained. The matter was remanded back to the differing member of the Tribunal to formulate the point of difference as required by law. The case was to be referred to the third member for a decision as per the provisions of the Customs Act. The Court clarified that they did not delve into the merits of the case and disposed of the tax appeal accordingly.