2013 (10) TMI 1048 - HC - Central Excise

Appeal u/s 35-B authorisation by the Committee of Commissioners - CESTAT dismissed the appeal filed by revenue observing that, this is another occasion that has come to notice where review order appearing at pages 4 to 10 of appeal folder indicates that while that order was authenticated by one of member Commissioner of the committee on 23.06.2005, the other member authenticated on 24.06.2005. There was no ad idem on the same date either on 23.06.2005 or 24.06.2005 - Held that - The opinion of the Board of Commissioner of the Central Excise under Section 35B is not justiceable on merits in Court - The opinion to be formed by the Board of Commissioners is a prima facie opinion and is not conclusive in nature which may be subject to challenge by the assessee on merits - If such an order is subjected to judicial review, it may give rise to taking ground to be agitated in almost every case and will cause unnecessary delay in disposal of the appeals under Section 35B of the Act. The orders passed by the designated authorities, by which the department authorises an appeal to be filed, is to avoid the filing of frivolous and unnecessary appeals - Such an order may be challenged, like a sanction in a criminal case only on the ground of non-application of mind, absence of material on which the mind has been applied by the authority, and lack of bonafides - The merit of the order of the Committee of Commissioner of Central Excise granting approval may not be subjected to challenge, as the appeal in any case has to be considered and decided on merit by the Appellate Authority on merits under Section 35B of the Act Matter remanded back to CESTAT to decide the appeal. - Decided in favor of revenue.

Summary

Issues:
1. Validity of the authentication process by the Committee of Commissioners under Section 35B (2) of the Central Excise Act, 1944.
2. Compliance with legal requirements for authorization of appeals.
3. Jurisdictional conflict between judgments of different High Courts.
4. Judicial review of the opinion formed by the Board of Commissioners under Section 35B.

Issue 1: Validity of the authentication process by the Committee of Commissioners:
The case involved an appeal filed against an order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) by the Central Excise department. The CESTAT dismissed the appeal citing discrepancies in the authentication process by the Committee of Commissioners. The CESTAT referred to a judgment of the Delhi High Court emphasizing meaningful consideration in decision-making and noted discrepancies in the authentication dates by the committee members. However, the Allahabad High Court held that the method of obtaining authorization is not a matter for the Tribunal to inquire into, as long as the decision is made with due application of mind.

Issue 2: Compliance with legal requirements for authorization of appeals:
The Court discussed the purpose of Section 35B(2) of the Act, which aims to prevent the filing of frivolous appeals. The Committee of Commissioners must apply their minds to determine if filing an appeal is necessary. The Court emphasized that the opinion formed by the Board of Commissioners is not conclusive and is not subject to judicial review on merits. The focus should be on whether there was an application of mind, presence of material, and bonafides in granting approval for the appeal.

Issue 3: Jurisdictional conflict between judgments of different High Courts:
The CESTAT relied on a judgment of the Delhi High Court, while the Allahabad High Court emphasized its own jurisdictional ruling in a previous case. The Allahabad High Court held that the CESTAT should have followed its judgment rather than that of the Delhi High Court. The Court emphasized that the Tribunal should not have examined the validity of the authorization process beyond the scope of its inquiry.

Issue 4: Judicial review of the opinion formed by the Board of Commissioners:
The Court clarified that the opinion formed by the Board of Commissioners is not justiciable on merits in court. The focus should be on procedural aspects such as application of mind, presence of material, and bonafides. The Court emphasized that challenging the merit of the authorization order would lead to unnecessary delays in the disposal of appeals under Section 35B.

In conclusion, the Court allowed the Central Excise Appeal, set aside the orders of the CESTAT, and remanded the matter for a decision on merits in accordance with the law. The judgment highlighted the importance of procedural compliance and the limited scope of judicial review in matters of appeal authorization.