2004 (6) TMI 60 - AT - Central Excise

Summary

Issues Involved:
1. Whether the order of review passed under sub-section (1) of Section 35E of the Central Excise Act by the Board within one year from the date of the order of the Commissioner (adjudicating authority) but issued to the Commissioner (executive authority) beyond the said period of one year is hit by time-bar under sub-section (3) of the said section.

Issue-wise Detailed Analysis:

1. Conflicting Views by Different Benches:
The Larger Bench was required to address conflicting views expressed by different Benches of Co-ordinate jurisdiction. The West Zonal Bench in cases like Commissioner of Customs, Mumbai v. Fujitus India Telecom Ltd. and Commissioner of Customs (Import), Mumbai v. Vardhaman Acrylic Ltd. held that the relevant date for computing the period of limitation of one year under sub-section (3) of Section 35E is the date on which the review order was issued. Conversely, the Northern Bench in GTC Industries v. CCE held that it is the date on which the review order was passed that is relevant.

2. Facts of the Present Case:
In the present case, the Commissioner of Central Excise, Chennai-II passed the order-in-original on 31-12-1997. The Central Board of Excise & Customs reviewed this order on 29-12-1998. However, the review order was issued on or after 11-3-1999 and received by the Commissioner on 26-4-1999. The Revenue filed the appeal on 21-5-1999. The assessee contended that the appeal was not maintainable since the review order was issued beyond the one-year period from the date of the Commissioner's order.

3. Statutory Provisions:
The relevant statutory provisions under Section 35E of the Central Excise Act were discussed in detail:
- Sub-section (1) allows the Board to review and direct the Commissioner to apply to the Appellate Tribunal.
- Sub-section (3) stipulates that no order shall be made after one year from the date of the decision or order of the adjudicating authority.
- Sub-section (4) provides a three-month period for making an application to the Appellate Tribunal from the date of communication of the order.

4. Analysis of Conflicting Decisions:
The West Zonal Bench's view was that the direction to apply to the Appellate Tribunal is deemed to be made on the date of issue of the review order. This was based on the interpretation that the word 'direct' implies communication to the officer who is to make the application.

In contrast, the Northern Bench in GTC Industries emphasized the literal interpretation of sub-section (3), concluding that it is the date on which the review order is passed that is relevant for computing the one-year period. This interpretation was supported by the language of sub-sections (1), (3), and (4), which clearly delineate different stages and corresponding periods of limitation.

5. Supreme Court Precedents:
The decision in GTC Industries was found to be consistent with the Supreme Court's ruling in CCE v. M.M. Rubber Co., which held that the period of one year under sub-section (3) should be given its literal meaning, and the relevant date is the date on which the order was made, not the date of its communication.

6. Rejection of Assessee's Contention:
The assessee's argument that the delay in issuing the order implies that the order was made only when it was issued was rejected. The cited cases, State of Andhra Pradesh v. M. Ramakishtaiah & Co. and Ushodaya Enterprises Limited v. Commissioner of Commercial Taxes, were distinguished on facts, as they involved allegations of anti-dating and unexplained delays, which were not present in the current case.

7. Conclusion:
The Larger Bench agreed with the view in GTC Industries, holding that the relevant date for computing the period of limitation under sub-section (3) is the date on which the review order was made. Consequently, the appeals filed by the Revenue were deemed maintainable.

8. Final Decision:
The reference was answered in favor of the Revenue and against the assessee. The appeals will be heard by the Regular Bench on merits.