Question regarding Point of Difference to be mandatorily framed in case of difference of opinion among two members.

PJ/Case Laws/2012-13/1531

Case:- AMOD STAMPINGS PVT. LTD. V.COMMISSIONER OF CUSTOMS

Citation:-2013 (289) E.L.T. 421 (Guj.)

Brief facts:- In this case There is difference that arose between Hon'ble Member (Judicial) who ordered for the matter to be remanded to examine the questions of limitation, applicability of the benefit of alternate Notification and consideration of deemed exports to be counted towards export obligation and the Hon'ble Member (Technical) who has ordered the rejection of the appeal in toto.The opinion of the third Member would form part of majority decision. In the facts of the instant case, when the learned third Member of the Tribunal before whom the matter went, the differing Member had not framed the point of difference of opinion. When the matter was being heard by learned third Member, in his judgment, in para-15, he recorded his finding as under :
"I find that no specific point of difference has been placed before me. It appears from 'DIFFERENCE OF OPINION' framed by the regular Bench that I have to concur with one of the Members.".

Therefore, following issues were made before the High Court:-

1.    Can any order be passed by a majority, which includes the third member, when the third member admittedly holds that there is difference of opinion and he has to concur with one of the member?
2.    Whether the third member to consider all the aspect or only concurring simpliciter with the one member if there is any difference arise between both the members of division bench of Tribunal?
3.    Are not the judicial precedents on like issue required to be followed?

Reasoning of Judgment:- The Hon’ble High Court heard both the parties and considered that the facts are not disputed that there was difference of opinion between two learned Members of Division Bench. In view of Section 129C(5) of the Customs Act, 1962 ('the Act' for sake of brevity) in case of difference of opinion between two Members of the Tribunal, the point of difference of opinion was required to be stated by the Members and thereafter the matter was to be decided by a third Member.

To be precise, the relevant part of Section 129C(5) of the Customs Act, 1962 reads as under :

"129C(5). If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority; but if the members are equally divided, they shall state the point or points on which they differ and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of these members of the Appellate Tribunal who have heard the case, including those who first heard it."

The High Court further finds that the opinion of the third Member would form part of majority decision. In the facts of the instant case, when the learned third Member of the Tribunal before whom the matter went, the differing Member had not framed the point of difference of opinion. When the matter was being heard by learned third Member, in his judgment, in para-15, he recorded his finding as under:

"I find that no specific point of difference has been placed before me. It appears from 'DIFFERENCE OF OPINION' framed by the regular Bench that I have to concur with one of the Members."

The High Court considered that once the learned third member found that point of difference of opinion has not been formulated by the two Members of the Bench then thelearned third Member was required to send the matter back to the DivisionBench for formulating the point of difference of opinion and only after the pointof difference of opinion was formulated, decide that question. The learned thirdmember could not say that though difference of opinion has not been framed, he has to agree or disagree with the Member and accordingly he has agreed withthe judicial Member. In our opinion, the approach of the learned third Member was not correct in law and he was required to send the matter back to the Bend of the two Members who had differed, for formulation of the point of difference of opinion afresh so that question can be considered and decided by the learned third Member.

A Division Bench of this Court in Colourtex v. Union of India [2006 (198) E.L.T. 169 (Guj.) = 2008 (9) S.T.R. 426 (Guj.)]has held that exact differences has to be formulated by members of the Division Bench of the Tribunal and it is not open to them to formulate a question as to whether the appeal is to berejected or remanded for a fresh decision for determination of duty, confiscation and penalty etc. In the present case it is seen that the question formulated by the Division Bench does not specify the requirement of sub-section (5) of Section129C of the Act. Therefore, the order passed by learned third Member as well as the difference of opinion expressed, generally, by differing member without precise formulation of the point of difference of the Tribunal cannot be entertained In the result, this appeal succeeds and is allowed. The orders of the learned thirdmember as well as the difference of opinion formulated by the differing Member of the Division Bench are set aside.

The High Court remanded back the matter to the differing Member of the Tribunal formulate point of difference in a manner required under the law and thereafterthe matter to learned third member for decision. As contemplated in on 129C(5), after the point of difference of opinion is formulated by Division bench, it may sent the matter to the President who may either decide or refer matter to learned third Member as per provisions of Section 129C(5) of the Customs Act, 1962. We make it clear that we have not entered into the merits of the case.

This tax appeal is accordingly disposed off.

Decision:-Appeal allowed.

Comment:- The analogy drawn from this case is that whenever the matter is referred to a third member for consideration, the differing member is required to properly frame the question of Point of Difference and the third member cannot be asked to accept decision of any one of the member.

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PJ/Case Laws/2012-13/1531

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