By TIOL News Service

MUMBAI, SEPT 01, 2016: THE Commissioner (A) invoked section 80 of the FA, 1994 and set aside the penalties imposed on the respondent u/s 76 &78 of FA, 1994.

This was in the year 2011. Unhappy with this largesse, a committee of Commissioners reviewed the impugned order and consequently an appeal came to be filed on 16.12.2011.

Thereafter, the jurisdictional authorities ‘discovered' that it was a wrong Committee which passed the review order meaning to say that the Committee should have comprised of the jurisdictional Commissioner, CE, Raigad and Commissioner of Service Tax-II, Mumbai but erroneously had included Commissioner of Central Excise, Belapur.

Again, an order was passed in July 2012 and the same officer was re-authorised to file the appeal.

So, the CCE, Raigad filed a Miscellaneous Application on 28.08.2012 before the CESTAT and prayed that the latter authorization be taken on record in lieu of the one issued on 8th December 2011 and that the appeal filed on 13th December 2011 should be deemed as having been filed with this, the later authorization.

Perhaps, because the deadline for filing appeal was 23rd December 2011, a fresh appeal would have required to pass the hurdle of condonation of delay and so this request for substitution, the Bench noted.

In the words of the CESTAT - Effectively, the appellant-Commissioner seeks that the appeal filed ahead of the authorization issued by the competent Committee be accepted for hearing by the Tribunal.

The matter was heard in February this year and an order was issued recently.

The Revenue submits that this is a curable defect. Case laws cited in support are Coromandel Fertilizers Ltd. - 2009-TIOL-781-HC-MUM-CX and Lloyd Insulation (I) Ltd. - 2007-TIOL-1397-CESTAT-DEL-LB.

The respondent assessee challenges the maintainability of this Miscellaneous Application on the ground that compliance with section 35B(2) of Central Excise Act, 1944 is a necessary pre-requisite to authorizing a designated Central Excise Officer to file an appeal. The decision in Elegan Enterprises - 2015-TIOL-1635-HC-P&H-CX is cited.

After considering the submissions made, the Member (T) writing for the bench, in his trademark style, observed thus -

+ We areperturbed that the direct method of filing a fresh appeal is being attempted to be by-passed and, more particularly, on an issue that does not entail such far-reaching consequences as to warrant tacit approval to an unauthorizedly filed appeal. We are also concerned about the circumstances and the manner in which this is attempted as it is on a rare occasion that delay in filing an appeal is not condoned.

+ In this day and age, we are fortunate that the enacted guarantees under the constitution and of the law protect citizens from whimsical and arbitrary exercise of powers by tax administrators. Law, however, can continue to retain its potency only to the extent the rigours of the safeguards are not sacrificed at the altar of expediency and technicality.

+ In disposing off miscellaneous applications in which the prayer is out of the ordinary, the Tribunal should move with deliberate caution lest there be outcomes that are prejudicial to the safeguards enjoyed by the citizenry.

+ The decisions cited on behalf of Revenue are,severally, only a tiny chink in the bastion erected by the wisdom of the supreme legislative organ to ensure that rule of law prevails over rule of men.

+ Review of adjudication and appellate orders is, and should be, a task undertaken with utmost discernment by the empowered authority to endorse their legality and propriety.

+ An appeal by Revenue is not a burden to them but ties up the assessee in legal wrangles despite having been held as compliant by lower departmental authorities.

+ The decision to continue the adversarial relationship and to prolong litigation is not in our hands but, to the extent that our discretion may abet such uncertainty, we would have to be convinced that the circumstances are not such as to cause doubts about the bona fides of the prayer for departure from the normal.

+ The common thread in all these decisions (cited) was the curability of the defects by the reviewing authority without revisiting the review itself.

+ In the matter before us, a committee, believing itself to be empowered, has undertaken the responsible task of review enjoined by the statute. It is also inevitable that the authorized committee could not but have been influenced by the decision of the unauthorized committee. That, by itself, is not sufficient cause for alarm provided the obligation to review is substantively complied with. These include the grounds on which the appeal is to be preferred, ascertaining causes for delay, if any, to justify any condonation that may be required and authorizing appropriate authorities to seek pertinent relief from the appellate authority.

+ We do accept that lapses of jurisdiction can and do occur in the increasingly complex world of administration. These, however, must be subject to a purification process with full responsibility and foreknowledge. We observe that the original authorization and review order are undated. The authorization and review order of the authorized committee are dated. The new authorization, which cannot be questioned on any score, directs the authorized officer to file the appeal. The analysis of the impugned order is eloquently elaborate and the relief articulated in the prayer is specific. Oddly, it does not include a plea for condonation of the manifest delay. It would appear that the committee was not made aware of the inordinate delay in filing the appeal in consequence of the fresh review. This glaring lapse can be rectified only by the authorized committee and rectificatory action sought by the authorized officer.

+ The plea for substitution by new authorization and deemed acceptance of earlier appeal has been made by the appellant-Commissioner. Without doubt, he is the appellant but with the authorized committee having designated a specific officer to handle the appeal, a plea entered by one not authorized by the committee for a decision that was not placed specifically before the authorized committee for a decision is a unilateral act beyond the scope of the powers of a Commissioner.

+ These flaws are severe enough for us to be displaying diffidence in applying the decision in re Coromandel Fertilisers that procedure should not be allowed to come in ‘the way of justice and it is not meant to trip justice' to the present application.

The Miscellaneous Application was dismissed. In parting, the Bench informed that it refrains from “imposing costs”.

Imposing, Costs! - Please see DDT 2860 & 2315.

(See 2016-TIOL-2287-CESTAT-MUM)