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TMI Blog1984 (2) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The amendment inserted a new Chapter VIA containing a series of Sections 35, 35A to 35P and 36 in the Act in substitution of the previous Sections 35, 35A and 36 of the old Act. We will first extract the relevant amended provisions of the said Act. They read as follows :- Section 35 Appeals to Collector (Appeals). - (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer lower in rank than a Collector of Central Excise may appeal to the Collector of Central Excise (Appeals) [hereafter in this Chapter referred to as the Collector (Appeals)] within three months from the date of the communication to him of such decision or order : Provided that the Collector (Appeals) may if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months allow it to be presented within a further period of three months. Every appeal under this section shall be in the prescribed(2) form and shall be verified in the prescribed manner. Section 35B(1) Appeals to the Appellate Tribunal. - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Collector (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Collector (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue. Section 35L Appeal to Supreme Court. - An appeal shall lie to the Supreme Court from - any judgment of the High Court delivered on a reference made(a) under Section 35G in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved immediately after the passing of the judgment, the High Court certifies to be a fit one for appeal to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Board or the Collector of Central Excise, as the case may be, as if the said section had not been substituted. Any person who immediately before the appointed day was authorized to appear in any appeal or proceeding transferred under sub-section (1) or sub-section (2) shall, notwithstanding anything contained in Section 35-O have the right to appear before the Appellate Tribunal in relation to such appeal or proceeding. 3.The principal argument on behalf of the appellant is that the right of appeal is a substantive right and not merely a matter of procedure Reliance is placed on : (i)Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh, 1983 (13) E.L.T. 1277 (S.C.) = AIR 1953 S.C. 221; (ii)Garikapati v. Subbiah Choudhary, AIR 1957 S.C. 540; State of Bombay v. Supreme General Films Exchange, AIR 1960(iii) S.C. 980; and (iv)Collector of Customs v. A.S. Bawa, 1978 (2) E.L.T. (J 333) (S.C.) = AIR 1968 S.C. 13. 4.The first judgment of the Supreme Court we shall be dealing in detail later and the second and third judgments referred to above are on the same lines and they leave an exception about express provision or necessary intendment. The judgment of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in view of the clear legal position which we are discussing hereinafter. 7.First of all, we must make it clear that we do not intend to rule upon the vires or otherwise of the amendment carried out by the Finance Act of 1980 or of the Act as amended. To us the amendment appears to be squarely intra vires, but this Tribunal being itself a creature of the amended Act, cannot go into vires of the Act. We therefore decline to rule upon the constitutionality or otherwise of the Act as amended and proceed on the basis that the Act and the amendment are all constitutional and that we are only to construe the provisions as they stand. 8.The main-stay of the submission by the appellant has been the dictum of the Supreme Court in "M/s. Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh", AIR 1953 S.C. 221 = 1983 (13) E.L.T. 1277 (S.C.) wherein it was observed that :- "A right of appeal is not merely a matter of procedure. It is a matter of substantive right. This right of appeal from the decision of an inferior tribunal to supreme Tribunal becomes vested in a party when proceedings are first initiated in and before a decision is given by the inferior Court". The Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal arising out of the proceedings under the old Act lay to the Central Board of Excise and the Appellate Collector under the old Act. This right has been taken away from the appellants and the appellants have been told that their appeals would lie to the Tribunal only and not to the Appellate Collector and the Central Board of Excise. Thirdly, under Section 35B(d) appeals against the order before or after the appointed day under Section 35A as it stood immediately before that day, namely, before the amendment, are also to be heard by the Tribunal. This is another provision which expressly treats the pending proceedings in the same way as those which are initiated under the amended Act. Fourthly, Section 35B(2) empowers the Collector to file an appeal against an order made under Section 35 as it stood immediately before the appointed day, or an order passed under Section 35A to file an appeal to the Tribunal. This again is a provision affecting the pending proceedings and is therefore retrospective. Fifthly, Section 35E(4) enables an appeal to be filed before the Tribunal in respect of the cases which would have been otherwise heard by the Central Government in exercise of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unamended Act stands abolished. (Jose Da'Costa v. Bascora Sadasiva Sinia - AIR 1975 S.C. 1843) Para 28 relying upon AIR 1957 S.C. 540 and 1905 AC 369 already referred to above. 12.These exceptions are also satisfied in the present case. Firstly, the right of appeal as it existed before is expressly taken away from the appellants in so far as they cannot now file the appeal before the Central Board of Excise & Customs. This is why the present appellants have not filed their appeals before those authorities. This is an admission on the part of the appellants that their previous right of appeal under the old Act has been taken away from then by the amendment. The second exception also applies because the Central Board of Excise & Customs acting as Appellate authority has been abolished by the amending Act. The abolition of these bodies as appellate authorities is material and significant, even if these bodies continue to do work other than the hearing of appeals. Hence by this test also the amending Act is retrospective and applies to these appeals. Section 35F is a part of the amending Act and it cannot be argued that only Section 35F does not apply while the rest of the amendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the Court held that : "A litigant has no right to contend that a Tribunal before whom he should have taken an appeal when he instituted the suit should not be abolished. The Legislature has full power to enact a law of that kind and it is not contended before us that the repeal of the previous Act was unconstitutional. It would, therefore, follow that whatever rights may have vested in the party in the matter of filing an appeal were abrogated by competent legislature. New rights were conferred in place of those which were taken away and it is only the new rights which could be availed of. After the new rights were conferred even they were modified in one respect and that was with regard to the hearing of certain kinds of appeals by a Full Bench. The rights to have the appeal heard by a Full Bench by virtue of a new provision never vested in any of the parties to the present litigation. Therefore, their abrogation by a later law cannot entitle them to make a complaint." 16.These observations aptly apply to the present case. In accordance with them, the right to have the appeal heard by the Central Board of Excise and Customs has been repealed and in its place a new ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 17-8-1983 on the Stay Application of M/s. Piya Pharmaceutical Works, Ghaziabad, which was recorded by my learned brother Shri S.D. Jha and concurred in by my learned brother Shri H.R. Syiem, I had occasion to apply my mind even earlier to the present issue. As would be evident from the Order in the Piya Pharmaceutical Works case, the arguments centred on the Supreme Court judgment in the case of Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh & Ors. (Reported in AIR 1953 S.C. 221 1953 SCR 987 = 1983 (13) E.L.T. 1277), referred to for convenience henceforth as "The Hoosein Kasam Dada case." During the hearing of the Piya Pharmaceutical case, most of the points raised in the case of M/s. Amin Chand Pyarelal (in which the learned Vice-President and my learned brother Shri A.J.F. D' Souza took the view—which apparently was not shared by the other learned Member of that bench Smt. V.S. Rama Devi - that the provisions of Section 35F were applicable even to a first appeal in all cases) and during the very extensive hearings before the present Larger Bench, were not raised and there was no occasion for that bench to consider those points. Similarly, that bench did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty, if any, in respect of which the appeal has been preferred." The important findings in the judgment, in the context of the present case, are as follows :- A right of appeal is not merely a matter of procedure, but a matter of substantive right (para 9); It becomes vested in a party when proceedings are first initiated in, and before a decision is given by the inferior Court (ibid); Such a vested right cannot be taken away except by express enactment or necessary intendment, and an intention to interfere with or impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication (ibid); The right that the amended Section gave is certainly less than the right which was available before. A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant's pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure (para 11); For the purpose of the accrual of the right of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Bolimuddin (supra), namely, that after the amendment the Court had no authority to entertain an appeal without a certificate from the Single Judge. Rankin C.J., repelled this argument with the remark at p. 643 : "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants' right." In our view the above observations is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of the right of appeal and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a subsequent enactment. That case related to a suit for a value exceeding Rs. 10,000 but below Rs. 20,000. The suit was instituted on 22-4-1949, before the coming into force of the Constitution, when there was a right of appeal to the Federal Court in such a case. On the coming into force of the Constitution the Federal Court was abolished and replaced by the Supreme Court, and the valuation necessary for appeal to the Supreme Court was raised to Rs. 20,000. An application to the High Court of Andhra for leave to appeal to the Supreme Court was dismissed on the ground, inter alia, that the value of the property involved was less than Rs. 20,000. Against this dismissal the petitioner made an application to the Supreme Court for Special Leave to appeal under Article 136 of the Constitution. The Supreme Court by a majority of 4 to 1 held that since the suit had been instituted before the date of the Constitution the parties thereto had, from the date of the institution of the suit, a vested right of appeal upon terms and conditions then in force. Consequently, even after the commencement of the Constitution and the replacement of the Federal Court by the Supreme Court and the raising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not apply retrospectively in the absence of express enactment or necessary intendment. This principle has been repeatedly stated, but a few instances will suffice : Privy Council judgment in(a) Delhi Cloth and General Mills Co. Ltd. v. Income Tax Commissioner, Delhi, 54 Ind. App. 421 : ILR of Lah 284 (AIR 1927 PC 242 (C). This has been cited with approval by the Supreme Court in Garikapati's case (para (6) at page 546) :- "the principle which their Lordships must apply in dealing with this matter has been authoritatively enunciated by the Board in 1905 AC 369 (A), where it is in effect laid down that, while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." (b)Anant Gopal v. State, AIR 1958 S.C. 915 at p. 917 :- "A change in the law of procedure operates retrospectively and unlike the law relating to vested right is not only prospective." Syndicate Bank, New Delhi v. Rallis In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e new enactment, the proper approach is not to enquiry if the new enactment has by its new provisions kept alive the rights and liabilities under the repealed law but whether it has taken away those rights and liabilities. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive of the question." (AIR 1971 S.C. 1193 in the case of Jayantilal Amratlal v. Union of India & Ors., following AIR 1955 S.C. 84 in the case of State of Punjab v. Mehar Singh, and AIR 1969 S.C. 79 in the case of T.S. Baliah v. Income-tax Officer, Central Circle VI, Madras). The same principle has been followed in a recent judgment of the High Court of Assam, reported in AIR 1980 Gauhati 3. The relevant paragraph from this judgment is extracted below :- Whenever there is a repeal of an enactment the consequences"5. laid down in Section 6 of the General Clauses Act will follow unless a different intention appears in the repealing statute. The principles of Section 6 are that unless a different intention appears in the repealing Act, any legal proceeding can be instituted and continued in respect of any matter pending under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment and not otherwise. This is how the principle has been set out in the Garikapati Judgment. However, sometimes another contingency is also included, namely where the Court to which the appeal lay at the commencement of the suit stands abolished. For instance, this has been stated as a second exception (in addition to the one set out above) in the judgment of the Supreme Court in Jose da Costa and Another v. Bascora Sadashiva Sinai Narcornin and Others, reported in AIR 1975 S.C. 1843 (para 28 at page 1850). The inclusion of this second "exception" led to some argument before us as to when an appellate Court or Tribunal can be said to be "abolished". 37.The authority cited in Josa da Costa for this second exception is also the Garikapati case. One would, therefore, have to go back to that judgment for illumination. However, before doing so, it would be useful to refer to a slightly earlier judgment of the Supreme Court, namely that in Daji Sahab and Others v. Shankar Rao Vithalrao Mane and Another, reported in AIR 1956 S.C. 29. It will suffice to reproduce two of the Head Notes prefixed to the report :- "A party to a suit has, on the cause being decided by the Court and when al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was held to be incompetent was not that the court to which an appeal lay at the date of the institution of the suit had been abolished and, therefore, the right of appeal ceased to exist nor that the court was abolished and a new court was set up in its place and nothing was mentioned about the vested right of appeal but that the new court which took the place of the court to which the appeal originally lay was given jurisdiction in all cases "unless otherwise provided by this Act" and that that very Act having declared the whole of the sections of the Code in which the provisions relating to the Circuit Court and rights of appeal found place to be replaced by other provisions and those other provisions relating to the appeal from the Circuit Court, it was held that the statute "had otherwise provided." In other words this case illustrates that the matter really came within the first exception, namely that the vested right of appeal had been taken away expressly or by necessary intendment rather than within the second exception where the court to which the appeal lay had been abolished simpliciter. This case, therefore, can give no support to the conclusions of the Full Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of undue hardship, but this being a matter of discretion would not materially affect the interpretation of the Section, in the same way as the similar proviso to the old Section 129 of the Customs Act did not make any difference in the situation covered by the A.S. Bava case). If the affect of this provision is examined, it will be seen that :- in terms of the(a) Hoosein Kasam Dada and A.S. Bava judgments, it is clearly calculated to whittle down the previously unfettered right of appeal; and there is no express provision stating that this requirement(b) shall apply in respect of appeals filed after the coming into force of this Section, notwithstanding that the original proceedings were instituted prior to that date. 42.No doubt the Section on the face of it appears to be mandatory, and to require that the condition of pre-deposit be applied in the case of every appeal filed after the coming into force of the Section. Such could have been the normal interpretation of this legal provision, but for the fact that the law as laid down by the Supreme Court in the cases to which reference has been earlier provides for an exception in those cases where the right of appeal is deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded provisions should be given retrospective effect. In my view this would go against the basic principle that procedural provisions would (unless such a construction is textually inadmissible) have retrospective effect, whereas provisions touching substantive vested rights even if contained in the same amending statute, would not have retrospective effect in the absence of express enactment or necessary intendment. This has been brought out in the judgment of the Delhi High Court in Syndicate Bank v. Rallis India Ltd. (vide para 31(c) supra). Such an approach would also be contrary to the third principle enunciated earlier (vide para 33 supra). 47.It could also be argued that, by filing his appeal in terms of the new provisions an appellant is bound by all those provisions. This argument pre-supposes that the intending appellant has a choice between resorting to the amended provisions and continuing to avail himself of the unamended ones. In fact, however, there is no such choice. If the intending appellant wishes to exercise his vested right of appeal on or after 11-10-1982, he has only a "Hobson's choice", namely to file his appeal to the authorities prescribed in the amended p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary intendment that it should apply retrospectively even to cases where the proceedings were initiated, or the lis arose, prior to the coming into force of that Section. And it is precisely for this reason that the Special Bench in the Piya Pharmaceutical Works case reached the decision that it did. 50.Another submission of Shri Lakshmi Kumaran, and a very interesting one, was that the interpretation given to Section 35F in the Piya Pharmaceutical Works case amounted to "reading down" that Section, and this was something the Tribunal was not competent to do. Shri Lakshmi Kumaran's submission would certainly be valid if the Tribunal of its own accord, and without any compelling reason, proceeded to "read down" a provision of law. However, applying the law as laid down by the Supreme Court in a relevant context when a litigant brings the interpretation of the Supreme Court to its notice is something the Tribunal, like any other quasi-judicial authority, is bound to do : and recognizing and enunciating the logical consequences of such an application of law cannot be regarded as a "reading down of the law" by the Tribunal itself. 51.The conclusion I have reached would also find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments before the Larger Bench, the learned Secretary of the Bar Association, Shri R.K. Jain, drew our attention to another judgment of the Supreme Court which would appear to have a bearing on the issue. This is the judgment in the case of Messrs. Hardeodas Jagannath v. State of Assam and Others, reported in AIR 1970 S.C. 724, and referred to for convenience henceforth as "the Hardeodas case." This was a case with reference to the Assam Sales Tax Act, which is in some respects similar to the case of Hoosein Kasam Dada, in that the said Act originally contained provisions similar to the unamended provisions of Section 22(1) of the Central Provinces and Berar Sales Tax Act, and amended provisions on the lines of the amended provisions in the Central Provinces and Berar Sales Tax Act came into force with effect from 1-4-1958. In this case also the question arose regarding the application of the amended provisions to an appeal filed after the date of amendment. The Supreme Court held as follows :- "It was contended that the amendment came into force with effect from April 1, 1958 and it cannot be given retrospective effect so as to apply to assessment period ending on Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sirable to indicate what exactly was decided in the Piya Pharmaceutical Works case. That was a case relating to a first appeal. (As was brought out at the hearing before the Larger Bench, the same Special Bench, in its earlier Order No. 199/1983C, in the case of Messrs. Nuchem Plastics Ltd., had not accepted the applicability of the Hoosein Kasam Dada judgment to the case of a second appeal, since it was held that the right of revision which was in existence prior to 11-10-1982 was not synonymous with a right of appeal. The Special Bench had accordingly held that the provisions of Section 35E would be applicable to all cases of a second appeal filed after 11-10-1982). Further, it was made clear in para 5 of the Piya Pharmaceutical Works decision that the decision was concerned only with the question of pre-deposit under Section 35F, and that the nature and scope of the incidental and ancillary powers of granting stay which the Tribunal possessed independent of Section 35F, did not arise for consideration and were not dealt with. Thus, the question before the Special Bench was strictly confined to the issue of pre-deposit of duty or penalty in terms of Section 35F, in relation to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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