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TMI Blog2019 (5) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985. The refined oil is manufactured from crude rice bran oil and is exempt from Central Excise Duty vide notification dated 01.03.2006. During the course of refining of crude oil, Gadh/Soap Stock, Fatty Acid etc. emerge which are also exempt from payment of excise duty. The respondent department issued a number of show cause notices to all the refined oil manufacturers raising demand of Central Excise Duty on Fatty Acid, Wax and Gum which were cleared without payment of duty. Opinion was formed by the respondent-department that fatty acid, gum, gadh were subject to Excise Duty and refined oil manufacturers were wrongly clearing these products without payment of duty. Few of the manufacturers filed appeals before the Tribunal which were decided in different manner and resultantly, the matter went to the larger bench of the Tribunal. The respondent department raised issue of levy of excise duty on fatty acid. The Tribunal concluded that fatty acids, gums and waxes were nothing but waste arising during the course of refining of rice bran oil and the same could not be considered as manufactured excisable goods. The said items were held entitled to the benefit of exemption notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to file appeal before Commissioner (Appeals). Thus, the husband is holding charge of appellant and the wife is holding charge of Appellate Authority. Though appeal was filed in the name of Assistant Commissioner but he had just complied with the order of the Commissioner. According to the petitioner, on earlier occasion, the Commissioner (Appeals) decided the appeals contrary to the decision of the larger Bench of the Tribunal. Therefore, the petitioner vide letter dated 29.9.2018, Annexure P.7 requested the Chief Commissioner, CGST, Chandigarh to transfer appeal from Mrs. Charul Baranwal to some other Commissioner (Appeals) on the ground that the wife cannot hear appeal when husband is appellant. The Chief Commissioner vide letter dated 5.11.2018, Annexure P.8 declined the request of the petitioner holding that the petitioner may file appeal before the higher Appellate Authority against the order of Commissioner (Appeals) who is an independent quasi judicial authority and bound to decide the appeal without any bias or ill feeling. On account of declining of request of the petitioner by the Chief Commissioner, the petitioner vide letter dated 23.11.2018, Annexure P.9 requested Chai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting of Shri Ashutosh Baranwal and Mrs. Charul Barnawal was ordered as per transfer policy. There is no instruction of the Central Board of Excise and Customs which prohibits the posting of spouse as the appellate authority where the husband is posted as the Executive Commissioner. There is no bias feeling against the petitioner and the appeals are decided in accordance with law. There have been instances in the past where Commissioner (Appeals) and Executive Commissioners have been posted in the same jurisdiction on spouse ground in the department. On these premises, prayer for dismissal of the petition has been made. 4. We have heard learned counsel for the parties. 5. The issue in the present case relates to the transfer of appeal of the petitioner from Commissioner (Appeals) Ludhiana to some other Commissioner (Appeals) on the ground that wife is holding the charge of Commissioner (Appeals) and the officer who reviewed the order passed by the Assistant Commissioner and directed him to file appeal on his behalf before the Commissioner (Appeals) is her husband. Thus, there is reasonable apprehension in the mind of the petitioner about bias in deciding his appeal pending befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The court presumes that the requirements are implied in the absence of indication to the contrary in the Act, confirming the power or in the circumstances in which the Act is to be applied. The rules requiring impartial adjudications and fair hearing can be traced back to medieval precedents, and indeed, they were not unknown in the ancient world. These principles were regarded as part of immutable order of things, so that in theory even the power of legislature could not alter them. Chief Justice Coke in Dr. Bonham's case (8 Co. Rep. 113b at 118a extracted from Wade's Administrative Law) said that Court could declare an Act of Parliament void if it made a man Judge in his own case, or other wise "against common right and reason". Natural Justice is summed up as fair play in action. The principle was applied with great restraint till 1963 until land-mark Judgment was rendered by House of Lords in Ridge v. Baldwin (1964) AC 40: (1963) 2 WLR 935: (1963) 2 All ER 66. The House of Lords made it clear that duty to act judicially arose directly from the power of an agency to 'determine questions' affecting the rights. The two basic principles of natural justice are: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and also to those who are entrusted with the duty of adjudicating the rights of the parties, like arbitrators, is universally accepted principle. In Rex v. Sussex, (1924) 1 KB 256 (supra), claim of damages was made by consequent upon collision which took place between the motor cycle driven by M and a motor cycle and side car driven by W.W alleged that he and his wife suffered injuries due to negligence of M. The Police also took out summons against M for dangerous driving of motor cycle. After the hearing of the case, the Justices retired to consider their decision and along with them the deputy clerk also retired with a view to assist them, should they desire to be advised on any point of law. The Justices did not consult him. They convicted M, the applicant, and imposed a fine of GBP 10 and costs. It was then brought to the notice of the Justices that the deputy clerk was a brother of solicitor of W. The question before the court was, whether the judgment was invalidated on account of bias. Lord Hewart C.J, with whom other Law Lords concurred, held that decision was invalidated due to bias." 8. In K.B.Sathyanarayana Rao and others v.s State of Karnataka and others, AIR 1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. There must be reasonable apprehension of that predisposition. The reasonable apprehension must be based on cogent materials.Needless to say, personal bias is one of the limbs of bias, namely, pecuniary bias, personal bias and official bias. 35. In Kumaon Mandal Vikas Nigam Ltd. v. Girja Shankar Pant and Ors. MANU/SC/0639/2000: (2001) 1 SCC 182, the Court referred to a passage from the view expressed by Mathew, J. in S. Parthasarathi v. State of A.P MANU/SC/0059/1973: (1974) 3 SCC 459: '16. The tests of "veal likelihood" and "reasonable suspicion" are really inconsistent with each other. We think that the reviewing authority must make a determination on the basis of the whole evidence before it, whether a reasonable man would in the circumstances infer that there is real likelihood of bias. The court must look at the impression which other people have. This follows from the principle that justice must not only be done but seen to be done. If right-minded persons would think that there is real likelihood of bias on the part of an inquiring officer, he must not conduct the inquiry; nevertheless, there must be a real likelihood of bias. Surmise or conjecture would not be enoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not arise. The requirement is availability of positive and cogent evidence and it is in this context that we do record our concurrence with the view expressed by the court of appeal in Locabail case." 10. In Bhajan Lal, Chief Minister, Haryana vs. M/s Jindal Strips Limited, (1994) 6 SCC 19, it was held by the Apex Court that bias is the second limb of natural justice. No one should be a judge in what is to be regarded as Sua Cause whether he is a party to it or not. The decision maker should have no interest by way of gain or detriment in the outcome of a proceeding. Interest may be in many forms. It may be direct, indirect, arising from a personal relationship or relation with the subject matter or from a tenuous one. The relevant observations read thus:- "21. Bias is the second limb of natural justice. Prima facie no one should be a judge in what is to be regarded as Rs.sua causa', whether or not he is named as a party. The decision-maker should have no interest by way of gain or detriment in the outcome of a proceeding. Interest may take many forms. It may be direct, it may be indirect, it may arise from a personal relationship or from a relationship with the subject- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption notification dated 18.5.1995. It was contended that on earlier occasion also, the appeal of the petitioner came up before Mrs. Charul Baranwal, Commissioner (Appeals) Ludhiana who vide order dated 18.4.2018 (Annexure P.2) inspite of the decision of the larger Bench of the Tribunal held that the petitioner was liable to pay duty on fatty acids etc. Still further, one appeal by the petitioner and two appeals of the Department were decided by Mrs. Charul Baranwal, Commissioner (Appeals) vide order dated 16.7.2018 (Annexure P.3) holding the petitioner liable to pay duty on fatty acids etc. The petitioner alleges that Mrs. Charul Baranwal is holding the charge of Commissioner (Appeals) Ludhiana and she is wife of Commissioner who had reviewed order passed by Assistant Commissioner and directed him to file appeal on his behalf before Commissioner (Appeals). Thus, the husband is holding charge of appellant whereas the wife is holding charge of appellate authority. Consequently, there is reasonable apprehension in the mind of the petitioner about the bias. 13. In view of the factual position in the present case and the settled position of law on the issue, as narrated above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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