Whether Commissioner (Appeals) power to remand back appeal?

PJ/Case Laws/2012-13/1396

Case:- HAWKINS COOKERS LTD. Vs COMMISSIONER OF C. EX., ALLAHABAD

CITATION:- 2012 (284) E.L.T. 677 (Tri. – Del.)

Brief Facts:-The appellant has filed the instant application seeking stay of operation of the order of Commissioner (Appeals) which annuls the order of the adjudicating authority and directs to pass order again afresh.

Appellant Contentions:-The appellant has pleaded that the impugned order of remand passed by the Commissioner (Appeals) is without jurisdiction. Expanding on the argument, the appellant has drawn out attention to pre-amended Section 35A (3) which specifically conferred the power to remand the matter back to the adjudicating authority upon the Commissioner (Appeals). Learned Counsel submitted that the aforesaid power of remand has been taken away from the Commissioner (Appeals) by virtue of amendment in Section 35A(3) brought in by the Finance Act, 1995. Appellant contended that the dropping of the word 'remand' form Section 35A (3) clearly indicate that by way of amendment, the Commissioner (Appeals) has been divested of the aforesaid power. In support of this contention, learned Counsel has relied upon the judgment of the Supreme Court in the matter MIL India Ltd. v. C.C.E., Noida - 2007 (210) E.L.T. 188 (S.C.) as also the clarification issued by the Department vide Circular F.No. 275/34/2006- CX., 8A, dated 18-2-2010. Thus it is contended that the impugned order being without jurisdiction is liable to be stayed pending appeal. Countering the argument of the respondent learned Counsel of the appellant has submitted that judgment relied upon by the respondent is not applicable to the facts of this case as it is in relation to the interpretation of erstwhile Section 128A(2) of the Customs Act, 1962.

Respondent Contentions:-The Respondent has pleaded that the amendment of Section 35A by no means has taken away the power of the Commissioner (Appeals) to remand the matter. It is submitted that reading of Section 35A of the Act would show that this provision confers power on the appellate authority to confirm, modify or annul the decision or order appealed against and pass an order which is thinks to be just and proper. Ld. Counsel submits that an order of remand necessarily annul the decision and the appellate authority is also vested with the power to pass just and proper order. If both these aspects of Section 35A (2) are read together, it necessarily imply that appellate authority has power to satisfy the decision under appeal and to remand the matter for fresh decision. In support of this contention Id. Counsel for the respondent has relied upon in the matter of Union of India v. Umesh Dhaimode reported in 1998 (98) E.L.T. 584 (S.C.).

Reasoning of Judgment:-We have considered the rival contention and perused the relevant provisions of Customs Act, 1962 and the Excise Act as also the judgment relied upon by the parties. Erstwhile Section 128A (2) of the Customs Act, 1962 and Section 35A (3) of the Excise Act respectively deals with the powers of the Commissioner (Appeals). Both the sections defined the powers of Commissioner (Appeals) in similar language which is reproduced thus:-

"The Commissioner (Appeals) shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against".

Interpretation of above provision came up before the Supreme Court in the matter of U01 v. Umesh Dhaimode (supra) and the Supreme Court after analyzing the provision held that power to remand the matter to the authority below for fresh decision is inbuilt in the aforesaid provision. The relevant observation of Supreme Court is reproduced thus :-

"As the order under appeal itself notes, the aforesaid provision vested the appellate authority with powers to pass such order as it deemed fit con- firming, modifying or annulling the decision appealed against. An order of remand necessarily annuls the decision which is under appeal before the appellate authority. The appellate authority is also invested with the power to pass such order as it deems fit. Both these portions of the aforesaid provision, read together, necessarily imply that the appellate authority has the power to set aside the decision which is under appeal before it and to remand the matter to the authority below for fresh decision."
As regards the judgment in the matter of MIL India Ltd. (supra) relied upon by the department, we may note that issue before the Supreme Court in the said matter was entirely different. However, the Supreme court while dealing with the matter observed thus:-

"In fact, the power of remand by the Commissioner (Appeals) has been taken away by amending Section 35A with effect from 11-5-2001 under the Finance Bill, 2001. Under the Notes to clause 122 of the said Bill it is stated that clause 122 seeks to amend Section 35A so as to withdraw the powers of the Commissioner (Appeals) to remand matters back to the adjudicating authority for fresh consideration".

The aforesaid observation of the Supreme Court in the matter of MIL India Ltd. (supra) are in the nature of passing remark on the scope of powers of Commissioner (Appeals) during the appeal under Section 35A(3). Therefore, aforesaid observation of the Supreme Court can not take precedence over the finding of the Supreme Court in the matter of Union of India v. Umesh Dhaimode (supra) based on the analysis of the provision itself. The Gujarat High Court in the case of CCE, Ahmedabad v. Medico Labs reported in 2004 (173) E.L.T. 117 (Guj.) has also held that Commissioner (Appeals) continues to have power of remand even after the amendment of Section 35A(3) of the Central Excise Act, 1944 by Finance Act, 2001 w.e.f. 11-5-2001. In view of the above, prima facie we are of view that despite of amendment in Section 35A (3), the Commissioner (Appeals) continues to have power of remand. Thus, we do not find justification for staying impugned order as granting of stay would result in necessary delay in the adjudication process. Stay application is therefore, dismissed.

Decision:-Appeal Dismissed.

Comment:- It is observed that interpretation in case of section 35A(3) is being taken differently as even after removal of the word “remand” from the section conferring powers of Commissioner Appeals, it is being held by the highest court and the high court that deletion of such word does not takes away the power of remand from the Commissioner Appeals. The view is taken that Commissioner Appeals continue to have implied power of remand.

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PJ/Case Laws/2012-13/1396

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