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TMI Blog2002 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-2000 holding that it is settled law that when there is no duty demand there could be no penalty. The Central Board of Excise & Customs in exercise of its power under sub-section (1) of Section 35E of the Central Excise Act, 1944 passed an order dated 24-4-2001 directing the Commissioner to apply to this Tribunal for correct determination of the question whether order passed by the Commissioner not confirming the demand of duty was erroneous in law and in the facts of the case. Pursuant thereto the above appeal was filed before this Tribunal on 13-7-2001. 2. When the appeal came up for hearing the respondent-assessee had filed a memorandum of cross-objection and took the contention that the appeal against the order of the Commissioner dated 27-4-2000 is not maintainable since the above order had already merged with the order of this Tribunal dated 29-6-2000 much before the Board of Revenue passed the proceedings under Section 35E(1) on 24-4-2001. Reliance was placed by the learned Counsel for the respondent in support of the above contention on the judgment of this Tribunal in CCE, Meerut v. Bajaj Carpet Industries [2001 (128) E.L.T. 474 (Tribunal) = 2001 (42) RLT 621 (CEGAT)]. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (3) provides that every appeal shall be filed within 3 months from the date on which the order sought to be appealed against is communicated to the Commissioner of Central Excise or as the case may be, the other party preferring the appeal. Sub-section (4) contains provision enabling the party against whom the appeal is preferred to file a memorandum of cross-objection within forty-five days of the receipt of the notice of the appeal. Such cross-objection will be disposed of by the Tribunal as if it were an appeal filed within the time specified under sub-section (3). Sub-section (5) enables the Tribunal to admit an appeal or permit filing of cross-objection after the expiry of the relevant period prescribed if it is satisfied that there was sufficient cause for presenting it within that period. 5. Sub-section (1) of Section 35E empowers the Board to call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under the Central Excise Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and then by order direct such Commissioner to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above contention the learned senior Counsel relied on the decisions of the Supreme Court in Sri Venkataraman Devaru & Ors. v. State of Mysore & Ors. - AIR 1958 SC 255, Krishan Kumar v. State of Rajasthan & Ors. - AIR 1992 SC 1789 and Sultana Begum v. Prem Chand Jain - AIR 1997 SC 1006. In AIR 1997 SC 1006 after referring to number of decisions on the issue, the Supreme Court laid down the principles to be adopted on the rule of construction when there is inconsistency between two sections. The principles are as follows: - "(1) It is the duty of the Courts to avoid a head on clash between two Sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonize them. (2) The provisions of one Section of a statute cannot be used to defeat the other provisions unless the Court, in spite of its efforts, finds it impossible to effect reconciliation between them. (3) It has to be borne in mind by all the Courts all the time that when there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is the ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow we will come to the contention raised by the respondent that, on the principles of merger, appeal by the Revenue is not maintainable. After the decision of the Supreme Court in S.S. Rathore v. State of Madhya Pradesh - 1989 (43) E.L.T. 790 (S.C.) it is now well established that the doctrine is applicable not only to courts but also to orders of Tribunals. In CCE Meerut v. Bajaj Carpet Industries Ltd. [2001 (128) E.L.T. 474 (Tribunal) = 2001 (42) RLT 621 (CEGAT)] this Tribunal considered the very same issue. Under an order dated 2-9-97 the Commissioner of Central Excise had confirmed the demand against an assessee only in respect of the duty liability for the period of six months. The appeal filed by the assessee challenging demand of duty for six months was allowed by this Tribunal under Final Order No. 523/98-D, dated 14-7-1998 [1999 (105) E.L.T. 235 (T)] setting aside the order of the Commissioner. Thereafter the Board reviewed the order of the Commissioner on 28-8-98 and directed to challenge that part of the order of the Commissioner which has given relief to the assessee. Tribunal took the view that when the order passed by the Commissioner was set aside by this Tribunal on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yammed v. State of Kerala - 2001 (129) E.L.T. 11 (S.C.). 1967 (XIX) STC 144 is a case which arose under the Madras Sales Tax Act (Act 9 of 1939). The dispute related to exercise of revisional power by the Board of Revenue. It was held that since the subject matter of the revision by the Board of Revenue was not the one which was considered by the Deputy Commissioner of Commercial Sales Tax at the instance of the assessee, the doctrine of merger cannot be invoked. It was held that since there was no merger of the first order passed by the Deputy Commercial Tax Officer in the order of the Deputy Commissioner of Commercial Taxes, the period of limitation has to be computed from the original order. It was then observed as follows :- "But the doctrine of merger is not a of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior Tribunal and the other by a superior Tribunal, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. In our opinion, the application of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger, the superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it. Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment, decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore, be applied to the former and not to the latter. (iv) ... ... ... ... (v) ... ... ... ... (vi) Once leav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Appellate Tribunal could not be examined by the Board of Revenue in exercise of its suo motu revisional power with a view to see whether the order against the Revenue and in favour of the assessee was correct in law or not. It was contended that since the assessee had no occasion to challenge that part of the order of the Appellate Assistant Commissioner which was in his favour, the Tribunal was not seized of any inquiry regarding the validity of that part of the order. Consequently the Board had ample power under Section 34 of the Act to examine that part of the order. The Apex Court took the view that on the scheme of the relevant provisions of the Act no exception can be taken to the view expressed by the High Court. 18. The power of review is given to the Board of Revenue under Section 34 which reads as follows :- "34. Special Powers of Board of Revenue. -(1) The Board of Revenue may, of its own motion, call for and examine an order passed or proceeding recorded by the appropriate authority under Section 4A, Section 12, Section 14, Section 15 or sub-section (1) or (2) of Section 16 or an order passed by the Appellate Assistant Commissioner under sub-section (3) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition in the High Court against such decision or an appeal in the Supreme Court against the order of the High Court thereon is pending, the Appellate Tribunal may defer the hearing of the appeal before it, till such revision petition in the High Court or the appeal in the Supreme Court is disposed of." After making reference to the effect of different sub-sections under Section 34 the Supreme Court observed as follows :- "But a possibility of Board and Tribunal being simultaneously approached by the Revenue and the assessee would arise if at all the order of the appellate authority is partly in favour of and partly against the assessee. However, even in such a case the fact that such order is partly against the assessee and partly in his favour will make no difference as the order as a whole would be available for scrutiny before the Tribunal or before the High Court in revision. Consequently, the bar of jurisdiction under Section 34(2)(b) would operate against the Board of Revenue qua such an order." 19. There is an elaborate consideration of the nature of the jurisdiction exercised by the Tribunal under Section 36 of the Act in the following manner - "When we turn to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order which is against it also reconsidered by the Tribunal in exercise of its jurisdiction under Section 36(3)(a)(i). Consequently it must be held that once the order of the Appellate Commissioner is brought on the anvil of scrutiny of the Appellate Tribunal by the dissatisfied assessee by filing appeal against the adverse part of that order, the entire order becomes open for scrutiny of the Appellate Tribunal and the entire controversy qua that order vis-a-vis both the contesting parties, namely, the assessee on the one hand and the Revenue on the other comes under the focus of scrutiny of the Tribunal. Once the entire Appellate order being partly in favour and partly against the assessee becomes subject to the jurisdiction of the Appellate Tribunal, the bar of Section 34(2)(b) against the revisional powers of the Board of Revenue would operate in its full swing and such an order of the Appellate Assistant Commissioner which is pending scrutiny before the Appellate Tribunal will go out of the ken of revisional jurisdiction conferred on the Board of Revenue under Section 34." 20. The principle evolved in the above decision can be applied to the case in hand also. In Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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