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TMI Blog2009 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... not referring judgements favourable to the Department, factual errors in the order. The valiant defence to the maintainability of the referral order also came from unexpected quarters, namely the assessees though the referral order contained opinions against them. 2. When the matters were called, learned Jt. CDR drew our attention to an application filed by the Department seeking adjournment by twelve weeks on the ground that "The Departmental Representative handling these matters has been drafted for Election Duty till 3rd week of May and he has proceeded for the same; that meanwhile the following eight Departmental appeals No. E/1513-1520/2008-EX have also now been listed for hearing before the Larger Bench on 9-4-09 along with the five appeals mentioned above for which the requisite notice has been issued on 31-3-09. ....... Further, another Stay Application bearing No. E/S/399/09 in Appeal No. E/382/09-CCE, Raipur v. Orissa Concrete & Allied Industries has also been directed to be tagged with the appeals before the Larger Bench on 9-4-09. 3. The Bench drew his attention to the fact that referral order has been passed on as early as 17-6-08; that the Larger Bench was consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no occasion for citing the same at the stay stage and therefore the same do not find a place in the referral order. In this context, he submits that the following judgments are some which are in their favour: (i) J.K. Cotton Spg. & Wvg. Mills Co. Ltd. v. Sales Tax Officer, Kanpur- 1997 (91) E.L.T. 34 (S.C.) (ii) Union of India v. Hindustan Zinc Ltd. - 2008 (225) E.L.T. 183 (Raj.) (iii) G.S.L. v. C.C.E., Vadodara - 2004 (176) E.L.T. 690 (Tri-Mumbai) (iv) C.C.E., Indore v. Rajaraam & Brothers - 2007 (217) E.L.T. 284 (Tri.-Del.) (v) Remi Metals, Gujarat - 2001 (136) E.L.T. 1079 (T) (d) The para 8 of the referral order indicates that the first issue stands referred to Larger Bench in the case of Nicholas Piramel (I) Ltd. [2008 (232) E.L.T. 37 (Tri.-LB)]. There is a mention in para 8 of the referral order that the same issue has been decided in their own case and the Tribunal has not given any reference to the order so passed and therefore, they are handicapped in arguing the referred points. (e) The observation in para 5.3 of the referral order, about the view of the Tribunal in Bhushan Steel Strips [2008 (223) E.L.T. 517 (Tri.-Mumbai) is factually incorrect inasmuch as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case is proper and legal and is also supported by precedents. In this regard, he relies on the following orders referring to the Larger Bench at stay stage and the subsequent order of the Larger Bench in the said case. "(i) Bosch Chasssis Systems (I) Ltd. v. C.C.E., Delhi-III reported in 2008 (229) E.L.T. 686 - Larger Bench Order reported in 2008 (232) E.L.T. 622; (ii) C.C.E., Pondicherry v. Acer India Ld. v. C.C.E., reported in 2004 (166) E.L.T. 21 (S.C.) - Larger Bench order reported in 2004 (172) E.L.T. 289; (iii) Luminous Electronics Pvt. Ltd. v. C.C.E., New Delhi, reported in 2001 (129) E.L.T. 605 (Tri-LB) [Stay Order No.1/2001-B, dated 4-1-2001]." 6.1.5 He also submits that reference to Larger Bench can be made on the basis of a prima facie view taken when the same was found to be contrary to prevailing view. It is not mandatory that the referral Bench should come to a firm conclusion which is in conflict with the decision by another Bench before referring to the Larger Bench. He also submits that such practice of referring to Larger Bench on a prima facie view is being adopted by the Hon'ble Supreme Court as in the case of C.C.E., Pondicherry v. Acer Ltd. reported i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CDR that there were decisions which were of conflicting in nature even though the said decisions have not been specifically mentioned in the referral order. 7.1 At the request of the Bench, Learned Senior Advocate Shri S.K. Bagaria appearing as amicus curie submits that the law of precedent has to be respected; when a Bench notices conflicting and diametrically opposite decisions of the coordinate Benches, it cannot ignore either of the decisions and should necessarily refer to Larger Bench to resolve the conflict. He submits that such view has been taken by the Hon'ble Supreme Court. He also submits that even if there is only one decision vis-a-vis a coordinate Bench hearing substantially the same matter, the Bench may come to the conclusion that the decision is not correct for the reasons that it was rendered per incuriam i.e. without appreciating certain legal provision or without noticing a judgment on the issue or the reasoning adopted by the coordinate Bench is not acceptable to the present Bench. He was of the view that merely because the reasoning by the Coordinate bench is not appealing to the Bench considering the same matter, there is no reason to ignore the same withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there are conflicting decisions of coordinate Benches and when correctness of previous binding decision is doubted and the Bench is incapacitated in deciding the issue on hand or there is impediment in deciding the appeal. The Bench of the Tribunal hearing a matter comes to a firm conclusion that there are conflicting decisions and require that the matter deserves to be considered by the Larger Bench, then Bench can order accordingly and thereafter, President, CESTAT, shall be bound by such Judicial order passed by the Bench and requires to constitute the Larger Bench. When the referral Bench merely refers to the President for considering constituting a Larger Bench by the President, such an order cannot be treated as a judicial order. 7.3.4 When there is decision of the Supreme Court, High Court and by a Larger Bench on the issue under consideration no reference can be made to Larger Bench. No reference can be made when disputed facts are involved or to review an earlier decision or for answering hypothetical questions or academic issues. Further, no reference can be made to a Larger Bench disagreeing with the decision of a Bench whose strength was numerically higher than the str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught out in the order of the referral bench. They were keen to go ahead and argue on the merits on various issues referred to the Larger Bench. Shri R.K. Jain, Secretary of the Bar association, however, supports the view of Department on the preliminary objection. 9.1 We have carefully considered the various submissions on the preliminary objection. In the present case, the two member Bench consisting of Hon'ble Justice S.N. Jha the then President and one of us (Shri M. Veeraiyan Member Technical) while considering the stay petition connected to appeal by M/s. Vandana Global Ltd. noticed that the appeal related to denial of credit on various iron and steel articles used in fabrication of structure and plant and the Ld Advocate of the appellant relied on the decision of the Division Bench of Tribunal in the case of Bushan Steel Ltd. it appeared that the decision of the said case prima facie applied to the facts of the case in hand. But the Division Bench felt that the order of the Tribunal in the case of Bushan Steel Ltd. is contrary to the provisions of Cenvat Credit Rules and the assessee was not eligible to the credit and accordingly referred certain issues for consideration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different opinions on the point or points. The decision is taken only after the President/Members nominated for the hearing the difference of opinion conclude the hearing and the views of the majority of the these Members become the decision. 10.4 The above legal provision is not strictly applicable to two existing decision of the two different Benches which are in conflict with each other. In such a situation, 129C(5) cannot be invoked as President himself cannot consider the differences in decisions and choose one of the decisions of the Division Benches as correct. 11.1 The word "Bench" under Rule 2(d)(1) of the CESTAT (Procedure) Rules, 1982 means the Bench of the Tribunal and includes the President and a member sitting singly. The Bench of the Tribunal has powers to regulate the proceedings in terms of Section 129C(6) which reads as follows: "Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings." The above powers are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing principles which are as follows. "9. It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a Larger Bench. The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice. Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier the cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the administration of justice. It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the earlier case. In such circumstances, it is but natural and reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conflict in decisions" among co-ordinate Benches, its powers and functions, what matters can be referred who can refer such matters to LB, at what stage the matter can be referred. Further, no specific case law has been cited to say that the referral Bench cannot refer the matter on a prima facie view taken by them, it is seen that the Hon'ble Supreme Court in the case of Paras Laminates reported in 1990 (49) E.L.T. 322 (S.C.) held that power under Section 129(5) would be construed wide enough to refer the case to a Larger Bench. The referral Bench therefore has all the powers to refer the matter to the Larger Bench at the stage it considered appropriate. The view expressed by Ld. senior advocate Shri S.K. Bagaria that once the decision is taken by the referral bench which is in conflict with the precedent decision whether the wording used in the order of the referral bench is "prima facie view" or "final view" is immaterial as long as inconsistency in the earlier judgment has been brought out appears reasonable and acceptable. This view is also supported by the other members of the bar (except Shri R.K. Jain) who presented their views before the LB. Shri K.K. Anand, learned Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be considered only with reference to the appeal. The registry being office of the Tribunal exercises the assigned functions of the Tribunal. The Bench constituted by the President has the necessary powers and can deal with the stay petition as well as appeal and it cannot be a case that only on the registry listing the appeal specifically the Bench gets the jurisdiction. Inherent power of the Bench of Tribunal in this regard cannot be doubted. 13.3 A submission has been made that the decision in the Bhushan Steel is per incuriam and same has been passed overlooking many decisions of the Tribunal including the one authored by the author of decision in the case of Bhushan Steel. ignorance of law is no excuse, however, it may not be possible and correct to say that a Member should remember all the case laws in force and even if the same have not been specifically cited by the parties on either side. Such an interpretation is not at all warranted in an adversarial litigation. If neither side has cited the decision, the Member can not be expected to remember the facts of other cases decided and apply the same to the case on hand. To mention the name of a member and to say that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take a contrary decision shall be against to judicial discipline. 13.7 We also hold that the other grounds challenging the maintainability of the order of the referral Bench are also not sustainable. 14. The Larger Bench, like any other Bench of the Tribunal, has powers to regulate the proceedings in terms of Section 129C(6) on the points of difference between the Benches. The rival submissions about the correctness or otherwise of any facts which are relevant to the issues which have been referred for consideration can definitely be gone into by the Larger Bench after taking evidence from both sides. The Larger Bench has also the powers to call for the entire appeal filed and admit evidence on facts and submission on law relating to issues to be considered by them. The submission that items in para 5.2 are not fully listed and they are not items meant for construction is a matter of fact and the Larger Bench can consider the same after taking the necessary evidence in this regard. If the judgments in favour of the Department have not been cited in the referral order, the Department can definitely present the same before the Larger Bench. 15. We do not agree that there is any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the order they could have filed an application before the Division Bench; if they were aggrieved of the referral order, they were also free to challenge the same before competent forum. (f) The department has not made any application before the referral Bench on the issues raised before us. They have also not challenged the referral order as well as subsequent stay orders following the said order before any higher forum. On the other hand, they have readily accepted the orders of stay granted in several cases in view of reference made the LB. 17. In view of above, we do not find any merits in the preliminary objection raised by the department. 18. We also direct the Registrar to forward copy of this order to Chairman, CBEC and the Revenue Secretary for their kind information and for considering issue of appropriate guidelines to the Departmental Representatives. (Pronounced in open Court on ...........2009) Sd/- M. Veeraiyan Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in J.K. Cotton's case - 1997 (91) E.L.T. 34 (S.C.) and in Jawahar Mill's case - 2001 (132) E.L.T. 3 (S.C.) and other several judgments decided in favour of Revenue. Being aggrieved by Bombay Bench decision in above case, Revenue has gone in appeal before Hon'ble High Court of Bombay. Relying on the Apex Court decision in the case of K. Ajit Babu and Others v. Union of India and Others decided by Hon'ble Supreme Court on 25-7-1997 Revenue's pleading was that consistency, certainty and uniformity in the field of judicial decisions are considered to be benefits arising out of the "Doctrine of Precedents". The precedent sets a pattern upon which a future conduct may be based. One of the basic principles of administration of justice is that the cases should be decided alike Ref : (Annexure-E, page 4 of Revenue's Paper Book). 21. Following its tradition, when the Larger Bench heard the Bar Association, Sri R.K. Jain, on behalf of Bar, repeatedly emphasized need of consistency, certainty, uniformity and impartiality in justice delivery system. According to him, expectation of bar is that dispensing of justice should ensure recording of reasons of decision by the Bench on total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase." (emphasis supplied). 23. Relying on the judgment of Hon'ble Supreme Court in the case of Ram Jivan v. Smt Phoola (1976) SCC 852 which has pointed out salutary rule, namely, the rule of judicial precedents and referring to Para 9 of the judgment in Asst. Collector of Central Excise, Kalyan Division and Another v. Dipsi Chemicals Pvt. Ltd. and Another - 1987 (32) E.L.T. 556 (Bom), Sri Jain's pleading was that if precedents which are established are allowed to be too easily reconsidered or disturbed, it may well be kind of judicial destabilization. Referring to Salmond's Jurisprudence (11th Edition) the learned judge in the above case has reminded that it was wise to remember that fatal flaws silenced by earlier ruling cannot survive after death because a decision does not loose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned. His stress was that decision in Bhusan Steel & Strips Ltd's case having been delivered by Bombay Bench per incuriam that fails to provide basis to make the present reference when aforesaid two judgments of Apex Court holding the field were not considered by that Bench in that case. Further, many cases h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the litigants. Both litigants before a Court are equal and deserve to be dealt equally under law. Every effort should be made to ensure that no prejudice is occasioned to the litigants framing questions prematurely before hearing of an appeal and no disagreement with a decision of an earlier Bench at the interim stage is conceivable without hearing the appeal in entirety. Any question prematurely framed to seek advice of Larger Bench and that too without exercising appellate jurisdiction would affect the right of the parties seriously. This may virtually grant substantial relief to a party which is undue to him without hearing the appeal independently but being bound to apply advice or consultation of larger bench over the matter seized. This may be stated following the ratio laid down by Hon'ble Supreme Court in Dunlop India Ltd's case - 1985 (19) E.L.T. 22 (S.C.). 26. Interpreting provisions of section 129C(5) of Customs Act, (herein after referred to as "the Act") Apex Court in the case of Union of India v. Paras Laminates (P) Ltd. - 1990 (49) E.L.T. 322 (S.C.) has laid down the law to resolve conflict of decisions of different benches of Tribunal on the same issue with better ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the president only when there is difference of opinion. Following the ratio laid by Hon'ble High Court of Gujarat in the case of Colourtex v. Union of India - 2006 (198) E.L.T. 169 (Guj.) = 2008 (9) S.T.R. 426 (Guj.) it may be stated that the Larger Bench can hear the questions referred without deriving any independent jurisdiction and has no power to decide the appeal in entirety. Thus the Larger Bench has neither appellate nor revisionary jurisdiction, but has advisory and consultative jurisdiction derived from the reference made by the Hon'ble President. Only upon reference of the matter by the Hon'ble President, the Larger Bench has locus standi to exercise its jurisdiction. It has neither power to record evidence nor power to re-appraise or re evaluate evidence in absence of appellate or revisionary jurisdiction. It has to act within the ambit of the facts settled by the Division Bench. Accordingly a Division Bench which formulates questions is bound by law laid down by Apex Court in Paras Laminates' case (supra) to hear an appeal and record and state the reasons of conflict of decision by a speaking order which is a precondition for making recommendation for reference. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e maxims yield the result that no party to litigation can be dealt to the detriment of justice by any premature act. Therefore it has been held by Apex Court in S. Nagaraj & Ors. v. State of Karnataka - 1993 Supp (4) SCC that Justice is a virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the Court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as in flexible in Administrative Law as in Public Law. Even the law bends before justice. If the Court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Apex Court Decision in Paras Laminates' case (supra) since following of judicial decorum and judicial discipline is strength of justice delivery system. It is golden rule of law that judicial independence of forum should remain unimpaired and its decision is made without being influenced by Larger Bench advice or consultation at a premature stage. Any departure thereto defeats spirit of justice. Before reaching to a conclusion by its own, on the matter in controversy by a division Bench, no decision of Larger Bench should have been solicited by that Bench to decide the matter adopting Larger Bench advice. 35. A Larger Bench only derives its Power from the reference made to it by the Hon'ble President and it shall act according to the terms of reference. Reference is sole and absolute discretion of Hon'ble President and that is, of course, judiciously exercised. A direct reference to Larger Bench by the Division Bench is contrary to the provisions of the Act and beyond its jurisdiction. A direct reference lacks jurisdiction to seize over a matter even if sanctioned by President under compulsion by virtue of existence of a judicial order passed by a Division Bench. This goes agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintain decorum and comity. So also it is not meant to disrespect to the Division Bench in stressing the need for self-discipline on the part of the Division Bench while exercising its jurisdiction on interim application. Appeals pass through two stages i.e., stage of stay hearing and the stage of appeal hearing as noticed by Apex Court in the case of Alex Enterprises v. Union of India - 2009 (236) E.L.T. 10 (S.C.) in Para 8 of the judgment. Right Of appeal being conditional as held by Apex Court in the case of Vijay Prakash D. Mehta - 1989 (39) E.L.T. 178 (S.C.) = 1988 (4) SCC 402., the first stage is to cross the hurdle of hearing of pre-deposit. Only after that stage, subject to compliance to the interim order, if any, parties get right to be heard on appeal in full length and fair opportunity is granted to both sides to place their case while hearing the appeal on the contentious issues involved. In between there is no stage of consultative process for making reference and disposal of appeal on the outcome of consultation of Larger Bench. Benches of Tribunal exercising appellate jurisdiction is left absolutely free to decide an appeal according to law and decision of such Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Division is faced with a situation of having already delivered two different orders on the same issue taking by two different views by two different Benches, the Bench facing such a situation has to formulate the issue which is required to be referred to the Larger Bench and thereupon ask the registry to place the matter before the President to do the needful. 38. Aforesaid rulings made by the Hon'ble President in terms of judicial order uphold the majesty of law and serves useful purpose in justice delivery. These guide lines being in consonance with basics structure of law to maintain judicial discipline and judicial decorum, shall be strength of Tribunal 39. In view of aforesaid depiction of law and rules of justice, it has be come inevitable necessity for the Registry to place the matter before the Hon'ble President of the Tribunal to consider as to whether the Larger Bench shall proceed further in the matter or the matter shall revert back to the Division Bench for hearing of the appeal in entirety or any other proposition that the Hon'ble President may consider Just and proper in the fitness of the circumstances of the case and pass appropriate order to meet the end o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or Single Member Bench to do so nor there is any judicial pronouncement vesting such power upon the Division or the single Member Bench. This is essentially to maintain judicial discipline in the administration of justice by the Tribunal." 45. To sum up, reference of a matter to the Larger Bench or a third Member is entirely in the discretion of the Hon'ble President of the Tribunal. 46. In the present case, it is significant to note that the referral Bench is comprising of the Hon'ble Justice S.N. Jha, the then President and the ld. brother Veeraiyan, who is also Member of the present Larger Bench. So, the Hon'ble President sitting in Division Bench with another Member exercised his discretionary power to refer the matter Larger Bench, which is within the purview of the guidelines as recorded in Order dated 24th April, 2009. A question may raise as to whether the Hon'ble President may refer the matter directly, while sitting in Division Bench, without exercising his administrative power separately. The answer to the question, in my view, is yes. In this connection, I would like to quote the observation of the Larger Bench of the Tribunal in the case of Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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