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TMI Blog2018 (12) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery proceedings by issuing demand under show-cause notice against the appellant which eventually led to passing of original orders by the jurisdictional Commissioner. Three different appeals were, therefore, filed by the appellant. However, as clearance from the Committee on Disputes (in short "COD ") as required during the relevant time in terms of guidelines issued by the Supreme Court on 11.10.1991 in the case of Oil & Natural Gas Commission Vs. Collector of Central Excise 1992 (61) ELT 3 (SC), was not obtained, the appeals were dismissed by the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred to as "the Tribunal") though with liberty to apply for restoration of the three appeals on production of necessary clearance from COD. Later on, the constitution Bench of the Supreme Court in the case of Electronics Corporation of India Ltd. Vs. Union of India 2011 (265) ELT 11 (SC) recalled its earlier direction issued from time to time in the matter of seeking clearance from COD, with the result that after the judgment of the Supreme Court in the said decision, it was no longer necessary for any aggrieved party to obtain COD before availing statutory remedy of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Court in the case of M/s. Steel Authority of India, Bhilai Steel Plant, Bhilai Vs. Commissioner of Central Excise & Service Tax, Raipur (Tax Case No.140 of 2016), Kerala State Road Transport Corporation Vs. C.C.E., C. & S.T., Thiruvananthapuram 2017 (358) ELT 207 (Ker.) and Commissioner of C. Ex. & Customs Vs. Krishak Bharti Co-operative Ltd. 2016 (344) ELT 818 (Guj.) 5. On the other hand, learned counsel for the respondent-Revenue argued that the Supreme Court in the case of Oil and Natural Gas Commission (supra) had clearly laid down the procedure to be followed before an appeal at the instance of one Public Sector Undertaking could be entertained. As no appeal could be proceeded with without there being a clearance given by the COD, the appeals filed by the appellants were rightly dismissed by the Tribunal way back in the year 2006. He would submit that in fact, out of three appeals, in respect of two appeals COD clearance was declined on 2.11.2006 and 19.10.2006 much before the final order on 30th November 2006 and 4th December 2006 respectively of the Tribunal dismissing appeals for want of COD clearance. Had the denial of COD clearance been brought to the notice of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that no litigation comes to Court or to a Tribunal without the matter having been first examined by the Committee and its clearance for litigation. Government may include a representative of the Ministry concerned in a specific case and one from the Ministry of Finance in the Committee. Senior Officers only should be nominated so that the Committee would function with status, control and discipline. 4. It shall be the obligation of every court and every Tribunal where such a dispute is raised hereafter to demand a clearance from the Committee in case it has not been so pleaded and in the absence of the clearance, the proceedings would not be proceeded with. 5. The Committee shall function under the ultimate control of the Cabinet Secretary but his delegate may look after the matters. This Court would expect a quarterly report about the functioning of this system to be furnished to the Registry beginning from 1st January, 1992." 8. A perusal of the aforesaid direction would show that an obligation was placed on every Court and Tribunal where such a dispute is raised, to demand a clearance from the COD and in case it has not been so pleaded and in the absence of the clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce for the litigation." 9. The aforesaid clarification made it abundantly clear that requirement of obtaining clearance from COD was not treated as bar to the lodgment of an appeal or petition either by the Union of India or Public Sector Undertakings before any Court or Tribunal so as to save limitation. The only consequence of not obtaining clearance from COD was that the proceedings were not to be proceeded with. That means a proceeding was required to be kept as it is without progress till the clearance was given. There was nothing in the aforesaid two directions to empower the Tribunal to dismiss the appeal for want of COD clearance. 10. In yet another order passed in the case of Oil & Natural Gas Commission Vs. Collector of Central Excise (2004) 6 SCC 437, the Supreme Court, while reiterating its earlier direction, clarified as below: "4. There are some doubts and problems that have arisen in the working out of these arrangements which require to be clarified and some crease ironed out. Some doubts persist as to the precise import and implications of the words and recourse to litigation should be avoided". It is clear that order of this court is not to effect that -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission to the party approaching the Court. 23.5. The time limit fixed for obtaining such permission was also only directory and did not render the suit and/ or proceedings illegal if permission was not produced within the stipulated period. 23.6. The Committee on Disputes was required to grant permission for instituting or pursing the proceedings. If the High Power Committee (COD) was unable to resolve the dispute for reasons to be recorded by it, it was required to grant clearance for litigation. 23.7. The Committee on Disputes experience was found to be unsatisfactory and the directives issued by the Court regarding its constitution and matters incidental thereto were recalled by the Constitution Bench of this Court thereby removing the impediment which was placed upon the Court's/Tribunal's powers to proceed with the suit/ legal proceedings. The Department of Public Enterprises has subsequent to the recall of the orders in the ONGC line of cases modified its guidelines deleting the requirements for a COD clearance for resorting to the Permanent Machinery of Arbitration and; 23.8. The Permanent Machinery of Arbitration was and continues to be outside the purview of Arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the High Powered Committee. If it can, the High Powered Committee will resolve the dispute. If the dispute is not resolved the Committee would undoubtedly give clearance. However there could also be frivolous litigation proposed by a department of the Government or a Public Sector Undertaking. This could be prevented by the High Powered Committee. In such cases there is no question of resolving the dispute. The Committee only has to refuse permission to litigate. No right of the Department/Public Sector Undertaking is affected in such a case. The litigation being of a frivolous nature must not be brought to Court. To be remembered that in almost all cases one or the other party will not be happy with the decision of the High Powered Committee. The dissatisfied party will always claim that its rights are affected, when in fact, no right is affected. The Committee is constituted of highly placed officers of the Government, who do not have an interest in the dispute, it is thus expected that their decision will be fair and honest. Even if the Department/Public Sector Undertaking finds the decision unpalatable, discipline requires that they abide by it. Otherwise the whole purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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