2008 (12) TMI 55 - AT - Central Excise

Appeal by department - Tribunal has power to consider as to whether the substantive requirement u/s 35B(2) has been met before filing an appeal under the said sub-section - since the Committee of the Commissioners has neither come to a finding that the impugned orders are not legal or proper nor given any reasons therefore, the authorizations issued by the Committee are not valid in eyes of law - appeals filed by dept. in pursuance of such authorizations are not maintainable, hence dismissed

Summary

Issues Involved:
1. Validity of authorization letters under Section 35B(2) of the Central Excise Act, 1944.
2. Tribunal's power to adjudicate the validity of review orders and authorizations.
3. Procedural discrepancies in the issuance of authorization and filing of appeals.

Detailed Analysis:

1. Validity of Authorization Letters:
The primary issue raised by the respondents was that the authorization letters issued by the Committee of Commissioners did not comply with the requirements of Section 35B(2) of the Central Excise Act, 1944. The respondents argued that the Committee did not conclude that the impugned orders were not legal and proper, nor did it provide any reasons for the same. The authorizations were deemed mechanical and thus defective, rendering the appeals filed by the department not maintainable. The Tribunal found that the authorizations lacked any reasons indicating the orders were not legal or proper, merely stating that the orders were "appellable," which was insufficient.

2. Tribunal's Power to Adjudicate Validity:
The Tribunal considered whether it had the power to adjudicate the validity of review orders and authorizations to file appeals. Citing the Gujarat High Court in the case of CCEx. & C, Surat-I v. Shree Ganesh Dyeing & Printing Works, it was noted that the Tribunal must ascertain whether the Commissioner formed an opinion that the order was not legal or proper before filing an appeal. The Tribunal also referenced the Supreme Court's decision in Collector of Central Excise v. M.M. Rubber Co., which supported the Tribunal's role in examining whether the review was conducted within the stipulated period. The Tribunal concluded that it could indeed adjudicate on whether the substantive requirement under Section 35B(2) was met before filing an appeal.

3. Procedural Discrepancies:
The Tribunal observed various procedural discrepancies in the issuance of authorization and filing of appeals across different Commissionerates. Examples included undated authorizations, inconsistencies in who signed and verified the appeals, and missing authorizations. The Tribunal highlighted that such discrepancies needed rectification and uniformity. The Tribunal criticized the practice of issuing defective authorizations and emphasized the necessity for detailed inspections and proper record-keeping to ensure compliance with legal requirements.

Conclusion:
The Tribunal dismissed both appeals filed by the Department due to invalid authorizations. It emphasized that the authorizations must include a clear opinion that the impugned orders are not legal or proper, along with reasons for such conclusions. The Tribunal also reaffirmed its power to adjudicate the validity of review orders and authorizations. Lastly, it advised the concerned Member (Legal) to undertake thorough inspections to address procedural discrepancies and ensure uniformity in the review and appeal processes across the country.

Operative Portion:
The operative portion of the judgment was pronounced in the open Court on 17-12-2008.