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TMI Blog2024 (6) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the same is dismissed. - HON BLE SHRI ASHOK JINDAL, MEMBER(JUDICIAL) AND HON BLE SHRI RAJEEV TANDON, MEMBER(TECHNICAL) APPEARANCE For the Revenue : Shri S. Debnath, Authorized Representative For the Respondent : Shri Arijit Chakraborty, Advocate ORDER PER : RAJEEV TANDON : The revenue is in appeal against the Order-in-Appeal No. KOL/CUS/CKP/626/2009 dated 26.10.2009 passed by Commissioner of Customs (Appeals), Kolkata, whereby the Ld. Commissioner (Appeals) had allowed the refund claim with reference to duty paid against the Bill of Entry No. 333741 dated 29.03.2007 for the import of Ductile Iron Casting Manhole Covers, Frames Grates which were originally exported by them and returned back as rejects by their foreign customers on grounds of lack of quality certification. Upon import of the said goods, the importer paid CVD as leviable, the goods were re-processed and exported further under five Shipping Bills to M/s. Fonderic Alfredo Lamperti S.R.L., Italy. The assessee claimed the refund on the ground that assessment during re-importation under Notification No. 94/96-CUS dated 16.12.1996 was not proper. As the respondents were entitled for benefit of Notification No. 158/95-C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner (Port) 09.02.2010 6. Different opinion showed by Commissioner (Prev.) 11.02.2010 7. Case file asked from lower authority for careful Scrutiny of the developments 25.02.2010 8. Case file forwarded to CCP office- 21.04.2010 9. Discussions held with JC(P) 28.04.2011 10. Discussion held with JC (P) in presence of Representative of lower authority wherein a decision was taken for filing an appeal against the said order- 20.05.2010 11. Lower authority requested to send brief history of the case- 20.05.2010 12. Draft Review Order was presented before Commissioner (Port) 10.06.2010 13. Rectifications desired by CCP- 11.06.2010 14. Modified drat of Review Order presented before Committee- 29.07.2010 15. Draft Review Order approved on - 30.07.2010 16. Fair copy of Review Order signed on - 03.08.2010 17. Review Order No. KOL/Cus/PORT/REVIEW/47/2010 dated 03.08.2010 forwarded to Tribunal Cell for filing appeal before Hon ble CESTAT 05.08.2010 4.1 As evident from the above-referred time chart, it is observed that the Deputy Commissioner of Customs (Port) (one of the members of the Review Committee) had accepted the Order-in-Appeal dated 26.10.2009 vide his endorsement dated 09.02.2020. Whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Commissioner of Customs (Prev.), being of a view distinct from that of the Commissioner (Port), referred the matter back to Commissioner of Customs (Prev.). It is however noted that in the Commissioner of Customs (Prev.) s office, the subject file moved up and down whereupon in pursuance of a note of the Joint Commissioner (Prev.) dated 28.04.2010 on note sheet page No. 4 and 5/n of the file, we find that the Joint Commissioner has thereafter recorded as under:- A Discussed with Commissioner (Prev.). D.B. Roy (Appraiser) AC (RC) Review Cell to discuss and explain the points raised in my note dated 11.02.2010 please. With this note the file was transmitted up and down from the Joint Commissioner to the Review Section officers. We find that subsequently there is an exchange of notes happening in the matter. Pursuant thereto a Review Order has been prepared by Appraiser Shri D.B. Roy of Kolkata Customs and the same has thereafter been perused by the Commissioner (Port), who has recorded the following observations on note sheet 8 :- For the reasons stated in the note sheet and the draft, the case is fit for filing appeal please. This note is dated 10.06.2010. Finally the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposed acceptance of the order is at best a step in the consultation process and cannot be considered to have arrived at as having firmed up the views. In fact the actual words used by the Ld. Commissioner (Port) are The O-in-A dt. 27.03.2009 may be accepted. It need be noted have that the word used is may and not is thereby signifying a consultative process and not mandating an opinion fixed upon. Moreover, the said suggestion to the counterpart of the Committee member is an administrative act and in no way concerned with the quasi-judicial action in the matter. At this juncture we would like to advert to the decisions of the Hon ble Delhi High Court on this aspect of the matter in the case of Commissioner of Service Tax vs. Japan Airlines International Co. Ltd. [2015 (39) S.T.R 541 (Del.)], wherein the Hon ble High Court held as under:- 10. Before we proceed further, it may be relevant to extract the provisions of Section 86 (2) of the Finance Act, under which, the Committee of Commissioners, is said to have exercised its power to institute the appeal in the Tribunal. 86.(1). Any assessee aggrieved by an order passed by a Commissioner of Central Excise under Section 73 or Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Central Excise under Section 73 or Section 83 or even qua an order passed by the Commissioner, Central Excise (Appeals) under Section 85 of the Finance Act, in so far as the Revenue is concerned, the decision with regard to whether or not an appeal has to be filed can be taken, only by a Committee of Commissioners of Central Excise provided it has an objection to an order passed by Commissioner of Central Excise under Section 73 or Section 83A of the Finance Act. If, the Committee of Commissioners, comes to such a conclusion then, it is mandated to direct the Commissioner of Central Excise to prefer an appeal to the Tribunal. 10.2 Under sub-section (1A )(i), the Board is empowered by a notification published in the Official Gazette to constitute the Committee of Commissioners. Sub-clause (ii) of sub-section (1A) of Section 86 provides that the Committee so constituted shall either comprise of two Chief Commissioners of Central Excise or two Commissioners of Central Excise, as the case may be. 10.3 Where, however, the Committee of Commissioners differs in its opinion qua the order of the Commissioner of the Central Excise, it is required to state the point or points of dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it does not in any way convey that the function discharged by the Committee of Commissioners is imbued with attributes of a quasi-judicial process. 10.9 In our view, the duty discharged by the Committee of Commissioners is purely administrative and, cannot be, categorized as a quasi-judicial function since, it does not decide the lis between the parties, that is, the Revenue and the assessee. There is neither a de novo investigation of facts nor is a hearing required to be given by the Committee. All that the Committee of Commissioners does is to ascertain as to whether or not the adjudication order is impregnated with aspects which go against the interest of the Revenue, and if so, whether or not they are already covered by decisions rendered by superior Courts. The decision rendered by the Committee of Commissioners, in our view, does not have the attributes of a quasi-judicial function. 10.10 Furthermore, the instruction issued by the Revenue, is largely pivoted on the decision of the Division Bench of this Court rendered in Kundalia Industries case, which in any event, is the subject matter of the instant reference. For the reasons that we would give hereafter, it would be cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 12. Which brings us to the other issue, as to whether the members of the Committee ought to have given their independent reasons for reaching the conclusion to institute the appeal. There is no gainsaying that, as in the case, of quasi-judicial function carried out by statutory authorities, even in respect of administrative decision, reasons ought to be given. The purpose behind seeking reasons is not only to do away with the allegation that the conclusion reached is arbitrary and/or unfair but, is also insisted upon, to enable the aggrieved party, as also, a superior authority (which could be a statutory authority or Court or Tribunal) to ascertain as to what weighed with a decision making authority in reaching its conclusion. The principle has been summed up in the case of Alexander Machinery (Dudley) Ltd. v. Crabtree, 1974 LCR 120 that the decision of an administrative, quasi-judicial or even a judicial authority should not represent an inscrutable face of a sphinx . 12.1 Therefore, while one cannot but agree with the proposition that there should be material on record which reflects the reasons as to why the Revenue wishes to prefer an appeal, what does not flow from that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g forum, if challenged before a superior forum, may get set aside for reconsideration, not always on account of absence of reasons, but because, the matter, perhaps, requires deeper consideration qua issues which remained unaddressed in the underlying order. 12.6 Therefore, to conclude that every decision rendered by the Committee of Commissioners which does not bear independent reasons would lay it open to challenge, in our opinion, would be not only erroneous but would also render the exercise inefficacious and impractical. In our view, the limited scrutiny that the Tribunal may conduct when there is an objection raised as regards the maintainability of the appeal is, to examine, as to whether, a decision has been taken by the officers, who ought to form part of the Committee of Commissioners. Once, the record shows that a decision has been taken to file an appeal then, in our opinion, it is beyond the remit of the Tribunal to either examine the sufficiency of the material or the appropriateness/desirability of instituting the appeal ; as these are aspects with respect of which, responsibility has been placed on the Committee of Commissioners. 12.7 The Tribunal, while acting as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portant to view the proceedings as a whole - detailed notes considering the issue of appeal were prepared by those in the office of the Chief Commissioner delegated with such tasks, and the final decision or approval was taken by the Chief Commissioner. Short of requiring the Chief Commissioner himself to record independent reasons, there is no deficiency in the administrative action. Indeed, the rationale for Section 86 (2) was considered by the Supreme Court in Collector of Central Excise v. Berger Paints, (1990) 2 SCC 439, in the following words : 6. Having regard to the purpose of these rules as we conceive it, namely, to ensure that there was an application of mind to the points in respect of which the question for filing an appeal arose and that the appeal was duly authorised by the Collector, and was filed by the person authorised by the Collector in order to ensure that frivolous and unnecessary appeals are not filed, we are of the opinion that in the present context and in view of the terms of the rules and the purpose intended to be served, the appeal was competent and was duly filed in compliance with the procedure as enjoined by the rules. It has to be borne in mind tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll.), the Allahabad High Court, while considering a similar issue, observed that the precise method and manner of obtaining authorization is not an issue, but only a limited inquiry was permitted to determine whether such authorization was given in accordance with law, which, as discussed, is clearly the case in these proceedings... 12.9 As would be evident, the Court considered not only the decision of the another Division Bench in the case of Kundalia Industries but also the decision of the Supreme court in the case of Collector of Central Excise v. Berger Paints. It would be pertinent to note that against the decision rendered by the Division Bench in LR Sharma-1, the matter was carried to the Supreme Court, which dismissed the Special Leave Petition in limine vide order dated 7-7-2014, passed in SLP Nos. 14544-14545/2014 . As a matter of fact, a review petition bearing Nos. 2521-2522/2014, was also preferred, which was dismissed, once again, in limine, on 27-11-2014. 13. As noticed above, in L.R. Sharma-1 s case, a Division Bench of this Court had noticed, inter alia, a decision rendered by another Division Bench of this Court in Kundalia Industries s case as also the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Industries case is not consistent with a view taken by the Supreme Court. 14.1 It is for this very reason that we respectfully differ from the view taken by a Division Bench of the Punjab and Haryana High Court in : B.E. Office Automation Products Pvt. Ltd. Accordingly, the two judgments of the Tribunal cited by Mr. Mittal, i.e., in V.S. Exim Pvt. Ltd. and Super Cassettes Industries Ltd., in our view, do not state, the correct position in law. As a matter of fact, the decision rendered by another Division Bench of the Allahabad High Court, in Devson Steels [2014 (301) E.L.T. 295 (All.)], accords, with a view taken by us. 15. Before we conclude, we may also refer to a decision dated 2-11-2012, rendered by a Division Bench of this Court in : WP(C) 6918/2012, titled : LR Sharma and Co. v. Commissioner of Service Tax and Ors. (hereafter referred to as LR Sharma-2). 15.1 As is obvious, this was a decision rendered in a writ petition by a Division Bench. By this decision, which is really in the nature of an order, the assessee had questioned the maintainability of the appeal pending before the Tribunal on the ground that a review of the order of the Committee of Commissioners did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal case records we are all the more satisfied that the present appeal has been validly filed. As the delay in filing of the appeal has already been condoned by this Tribunal, we direct the Registry to list the case for final hearing on merits. (Order pronounced in the open court on) PER ASHOK JINDAL : 13. I have gone through the order drafted by the Ld. Brother, Member (Technical). As I am not with the agreement with the observations made by the ld. Member (Technical), I am recording a separate order. 14. In this case, as per the order of the Hon ble High Court of Calcutta dated 2nd August, 2012, one of the questions is to be decided by this Tribunal in respect of maintainability of appeal for non-compliance of the provisions of Section 129A (2) of the Customs Act, 1962. For better appreciation, the said provisions of Section 129A (2), are extracted herein below : (2) [The Committee of Principal Commissioners of Customs or the Commissioner of Customs] may, if it is] of opinion that an order passed by the Appellate [Principal Commissioner of Customs or Commissioner of Customs] under section 128, as it stood immediately before the appointed day, or by the [Commissioner (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order may be accepted on 09.02.2010. Thereafter, he changed his view and filed the appeal and agreed with the Commissioner of Customs (Preventive) that an appeal needs to be filed against the impugned order, which means that the Commissioner of Customs (Port) has reviewed his own order, which is not permissible in law. Therefore, the observation of the Ld. Commissioner of Customs (Port) dated 03.08.2010 is against the law and the same cannot permissible. 20. Further, if the Commissioner of Customs (Port) initially has accepted the impugned order and made his observations that the same may be accepted and thereafter, if the Commissioner of Customs (Preventive) is having a different view, in that circumstances, in terms of Section 129A (2) of the Customs Act, 1962, the matter was to be placed before the Principal Chief Commissioner of Customs or the Chief Commissioner of Customs, who is required to examine the issue and making a view that the appeal can be filed or not, which is not done in this case. 21. In that circumstances, I am of the considered view that as the Commissioner of Customs has made a view on 09.02.2010 that the impugned order may be accepted, in that ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber(Judicial) is correct holding that the Member of Committee of Commissioners [Commissioner of Customs (Port)] has arrived at the opinion on 19.02.2010 not to file an appeal against the impugned order, therefore, the matter is required to be referred to the Chief Commissioner of Customs in terms of the provisions of proviso to Section 129A (2) of the Customs Act, 1962; Or In the facts and circumstances of the case and the file notings whether Member(Technical) is correct in holding that the noting dated 09.02.2010 was only the initiation of a consultative process in discharge of powers vested under Section 129D (2) of the Customs Act, 1962 in the Commissioner (Port), and not formation of an opinion made by him as a Member of the Committee of Commissioners [Commissioner of Customs (Port), Commissioner of Customs (Prev.)] particularly as his expression dated 09.02.2010 uses the word may and therefore, a need for recourse to the provision of Section 129A (2) was not warranted. 2. On 29.02.2024 the Difference of Opinion matter was taken up for Hearing. This is an Appeal filed by the Revenue. 3. Hence, the first submissions were made by the Ld.AR for the department. The summary of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided to the Tribunal for their official purpose. The Respondent is precluded from using the administrative notings of the Revenue to canvass their case to set aside the Appeal on account of some points raised therein. 4. In view of the above submissions, he prays that the stand taken by the Respondent that the proviso to Section 129A (2) has not been followed in this case, is required to be dismissed. He fully relies and supports the decision of Hon ble Member (Technical) who has come to a conclusion that the Appeal does not suffer with any infirmity in terms of proviso to Section 129A (2) of the Customs Act, 1962. 5. The Ld. Advocate appearing on behalf of the Respondent submits that the Hon ble Member (Technical) has held that the word may used by the Commissioner (Port) does not convey that it was his final decision, but it is only an expression given by him in the relevant Review Order filed. He submits that this conclusion is erroneous and points out from the note sheets that the word may has been used not only by the Commissioner (Port), but also by the other officials including the Joint Commissioner (Prev.) and other officials as can be seen from the note sheets. He submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Commissioner of C.Ex., Raipur vs. Monnet Ispat Energy Ltd, cited (supra) by the Ld.AR for the Department would not be applicable in this case. 7. So far as the point made by the Ld.AR for the Department about this issue being that of administrative in nature, he submits that Section 129A (2) and proviso thereto are statutory provisions which are required to be followed and they are not mere administrative proceedings. Therefore, there cannot be any deviation from the procedures cited under these provisions. 8. He relies on the detailed findings of the Hon ble Member(Judicial) and supports the decision awarded by him. 9. In view of these submissions, he submits it may be held that the Revenue has not fulfilled the conditions of proviso to Section 129A (2) of the Customs Act, 1962. 10. I have carefully gone through the submissions made by both the sides and also through all the documents available on record. 11. Admittedly, the Department has filed the Appeal with a delay of 210 days along with their application for condonation of delay. On 12.12.2011, the Bench directed the Department to file an Affidavit by the Commissioner on or before 19.12.2011, whereupon the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not speak of the details contained in the Affidavit and gives an impression that review was conducted by both the Commissioners and they have agreed for the proposal to file the present Appeal, which is factually incorrect as per my above observations. 16. From the above details it is clear that a detailed Note Sheet was prepared (which is available at Page II and III), by the concerned official Shri D.B. Roy, Appraiser, Kolkata Customs with his recommendation on 24.01.2010, further recommended by AC (R) on 01.02.2010 and the Commissioner (Port), has accepted the same on 09.02.2010. As discussed above, the Affidavit Para (1) (e) clearly states that on or about 09.02.2010, the proposal for acceptance of the said Order-in-Appeal was accepted by the Commissioner of Customs (Port). Therefore, this does not leave out any scope to take a different view that on 09.02.2010, the Commissioner (Port) has only indicated his opinion that the Order-in-Appeal dated 27.07.2009 may be accepted. 17. There is one more reason to take this view. When he has indicated that the Order-in-Appeal dated 27.07.2009 may be accepted , is it a case that if assuming the Commissioner of Customs (Preventive) als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uling the earlier proposal to accept the OIA by the then Commissioner (Port), by the present Commissioner (Port), which is not permissible. Even on this count, the issue should have been referred to the Principal Chief Commissioner/Chief Commissioner in terms of proviso to Section 129A (2). 22. Section 129(2) of the Customs Act, 1962 reads as under:- SECTION 129A. Appeals to the Appellate Tribunal. .. .. (2) The Committee of Commissioners of Customs may, if it is] of opinion that an order passed by the Appellate Commissioner of Customs under section 128, as it stood immediately before the appointed day, or by the Commissioner (Appeals) under section 128A, is not legal or proper, direct the proper officer to appeal [on its behalf] to the Appellate Tribunal against such order : Provided that where the Committee of Commissioners of Customs differs in its opinion regarding the appeal against the order of the Commissioner (Appeals), it shall state the point or points on which it differs and make a reference to the jurisdictional [Principal Chief Commissioner of Customs or Chief Commissioner of Customs] who shall, after considering the facts of the order, if is of the opinion that the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the Commissioners, as per my detailed observations above, the consultative discussions started after the objection was raised by the Customs (Preventive). This itself shows that there was a difference of opinion towards the stand to be taken between these two Commissioners. In that case, the proper procedure to be followed was to have referred the matter to the Principal Chief Commissioner or Chief Commissioner to decide the issue in terms of proviso to Section 129A (2) which was not done in this case. 26. Another objection taken up by the Revenue during the present arguments was that the Respondent is required to take these submissions only on merits and not to go into the internal Note Sheets of the Revenue Department. As submitted by the Ld. Counsel appearing on behalf of the Respondent, it is seen that after the COD petition was allowed by this Bench, the Appellants have approached the Hon ble Calcutta High Court wherein while directing the Respondent (Appellant therein), to pursue the matter before the Tribunal, the Hon ble High Court has also allowed them to make submissions and has given the direction all the questions asked by the petitioner including the question of m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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