2007 (10) TMI 477 - AT - Central Excise

Tribunal affirms power to remand cases under Section 35-A(3) despite Revenue's challenges

The Tribunal upheld the Commissioner (Appeals)'s power to remand cases under Section 35-A(3) of the Central Excise Act, 1944, despite challenges raised by ... Remand powers of Commissioner (Appeals) - there is no substance in the challenge against the power of remand exercised by the Commissioner (Appeals) Issues Involved:1. Violation of the principles of natural justice.2. Power of the Commissioner (Appeals) to remand cases under Section 35-A(3) of the Central Excise Act, 1944.Detailed Analysis:1. Violation of the principles of natural justice:The Revenue appealed against the order of remand made by the Commissioner (Appeals) on the grounds of violation of the principles of natural justice. The respondent, engaged in the manufacture of 'Textured Yarn', was issued a show cause notice for confiscation and recovery of Central Excise Duty on clandestinely removed ROTO yarn. The adjudicating authority found the goods liable to be confiscated and duty payable, imposing penalties on both noticees. However, the Appellate Commissioner found that the respondent was not provided with copies of relevant documents despite repeated requests, which were only given after the order-in-original was made. Consequently, it was held that the respondent should be given an opportunity to defend their case properly.2. Power of the Commissioner (Appeals) to remand cases under Section 35-A(3):The Department's representative contended that the Commissioner (Appeals) lacked the power to remand cases under Section 35-A(3) of the Act, which was amended on 11th May 2001. Reliance was placed on the High Court of Punjab & Haryana's decision in Commissioner of Central Excise, Jalandhar v. B.C. Kataria, and the Larger Bench of the Tribunal in CCE v. Oripol Industries, which held that the power of remand was removed by the Finance Act 14 of 2001.The judgment delved into the history of Section 35-A(3) and the corresponding Section 128-A(3) of the Customs Act, 1962. Prior to 1980, the provisions did not specifically empower the appellate authority to remand cases. However, the Supreme Court in Union of India v. Umesh Dhaimode interpreted similar provisions under Section 128(2) of the Customs Act, 1962, to imply the power of remand by necessary implication, as an order of remand necessarily annuls the decision under appeal.The Tribunal noted that the amended Section 35-A(3) post-11th May 2001, which is almost identical to the pre-1980 provisions, should be construed similarly. The Supreme Court's interpretation in Umesh Dhaimode confirmed that the power to remand existed by necessary implication, despite the absence of explicit wording.The Tribunal found that the Division Bench of the Gujarat High Court correctly applied the Supreme Court's ratio in Umesh Dhaimode, affirming that the Commissioner (Appeals) retained the power to remand under the amended provisions. The Tribunal was bound by the Supreme Court's judgment, not by the Larger Bench's decision in Oripol Industries.Conclusion:The Tribunal dismissed the appeal, upholding the Commissioner (Appeals)'s power to remand cases, as the challenge against this power lacked substance. The decision was dictated and pronounced in open court on 5-10-2007.