2020 (10) TMI 532 - AT - Central Excise

Jurisdiction - Whether the single member bench of this tribunal is having the jurisdiction to decide the issue involving only interest irrespective of any amount in terms of Sec. 35D (3) of Central Excise Act, 1944 or not? - HELD THAT - Section 35D (3) of Central Excise Act, 1944 restricts the powers of Single Member Bench of this Tribunal to hear the cases where the dispute is other than determination of any question having a relation to rate of excise duty or value of goods for the purpose of assessment is in issue or the fine or penalty involved does not exist ₹ 50 Lakhs which means a case where the case is determination of any issue in relation to the rate of the duty and valuation of the goods or differential duty, fine or penalty involved are more than ₹ 50 Lakhs, the Single Member Bench of this Tribunal have no jurisdiction to deal the issue. It is settled law that the provision of Section 35D (3) of the Act has to be dealt as it is and no word can be edited or deleted while interpreting the said provision. The Hon'ble Apex Court in the case of Commercial Taxes Officer vs. Bombay Machinery Store 2020 (4) TMI 769 - SUPREME COURT held that we are of the view that interpretation of the Division Bench of Delhi High Court given the case of Arjan Dass Gupta does not lays down correct position of law. In the event, the authorities felt any assessee or dealer was taking unintended benefit under the aforesaid provision of the Act, 1956, then proper course would be legislative amendment. The Tax Administration authority cannot give their own interpretation of legislative provisions on the basis of their own perception of trade practice. The administrative exercise, in effect, would result in supplying words to legislative provisions, as if to cure omissions of the legislature. The Single Member Bench of this Tribunal is having the jurisdiction to decide the issue of interest irrespective of monetary limit. The objections raised by the Revenue are answered that the Single Member Bench of this Tribunal is having the jurisdiction to decide the issue of interest irrespective of any amount. The matter is listed for final hearing on 27.10.2020 alongwith the stay application.

Issues Involved:
1. Jurisdiction of Single Member Bench to decide on interest issues irrespective of the amount involved as per Section 35D(3) of the Central Excise Act, 1944.

Detailed Analysis:

Jurisdiction of Single Member Bench:
The primary issue before the Tribunal was whether a Single Member Bench has the jurisdiction to decide cases involving only interest, irrespective of the amount involved, as per Section 35D(3) of the Central Excise Act, 1944. The Revenue contended that the jurisdiction lies with the Division Bench because the interest amount involved exceeded ?5.5 crores. They relied on precedents like the Karnataka High Court's decision in REVA Electric Car Pvt. Ltd. and other Tribunal decisions to support their claim.

Revenue's Argument:
The Revenue argued that:
1. The jurisdiction to decide cases involving interest exceeding ?50 lakhs lies with the Division Bench.
2. They cited the Karnataka High Court's decision in REVA Electric Car Pvt. Ltd. and the Tribunal's decision in Dhampur Sugar Mills Ltd. to support their argument.
3. They claimed that the Single Member Bench lacks jurisdiction as per Section 35D(3) of the Central Excise Act, 1944, which restricts the Single Member Bench from hearing cases involving fine or penalty exceeding ?50 lakhs.
4. They emphasized that similar cases involving high amounts of interest have been decided by the Division Bench, such as in the case of CCE Rohtak vs. Som Flavour Masala Pvt. Ltd.

Respondent's Argument:
The Respondent countered that:
1. Section 35D(3) does not explicitly exclude interest issues from the jurisdiction of a Single Member Bench.
2. The provision restricts the Single Member Bench only in cases involving the determination of duty rate, valuation of goods, or fine or penalty exceeding ?50 lakhs, not interest.
3. They argued that the legislative intent was clear in not including interest in the exclusion clause.
4. They cited the Tribunal's decision in Dhampur Sugar Mills Ltd., which held that disputes regarding interest are not excluded from the jurisdiction of a Single Member Bench.

Tribunal's Findings:
1. The Tribunal examined Section 35D(3) of the Central Excise Act, 1944, which restricts the Single Member Bench from hearing cases involving duty, fine, or penalty exceeding ?50 lakhs but does not mention interest.
2. The Tribunal noted that the legislative intent was clear in not including interest in the exclusion clause.
3. The Tribunal referred to the decision in Dhampur Sugar Mills Ltd., which supported the view that interest disputes are not excluded from the jurisdiction of a Single Member Bench.
4. The Tribunal distinguished the Karnataka High Court's decision in REVA Electric Car Pvt. Ltd., noting that it involved a refund of Cenvat credit along with interest, not just interest alone.
5. The Tribunal concluded that the Single Member Bench has the jurisdiction to decide issues involving interest irrespective of the amount involved.

Conclusion:
The Tribunal held that the Single Member Bench has the jurisdiction to decide issues involving interest irrespective of the amount involved, as Section 35D(3) of the Central Excise Act, 1944, does not explicitly exclude interest issues from its jurisdiction. The objections raised by the Revenue were dismissed, and the matter was listed for final hearing on 27.10.2020 along with the stay application.

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