1990 (8) TMI 140 - SC - Customs

Supreme Court Upholds Customs Tribunal's Authority to Refer Cases to Larger Benches

UNION OF INDIA Versus PARAS LAMINATES (P) LTD.

The Supreme Court allowed an appeal against the High Court's decision setting aside two orders of the Customs, Excise and Gold (Control) Appellate ... Whether High Court was correct in setting aside Orders made by a Bench of two members of the Customs, Excise and Gold (Control) Appellate Tribunal and the President of the Tribunal? Held that:- It is true that sub-section (5) refers to difference of opinion arising amongst members of a Bench in a particular case, and not specifically where the members of a Bench doubt the correctness of an earlier decision. However, Section 129-C confers power of reference upon the President. That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree. In such cases, it is necessary for the healthy functioning of the Tribunal that the President should have the requisite authority to refer the case to a larger Bench. That is a power which is implied in the express grant authorising the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions. The Bench of two members acted within their power in stating the points of law which required clarification and the President acted equally within the bounds of his power in constituting a larger Bench to hear and decide those points - set aside the impugned judgment of the High Court - Appeal allowed. Issues:Appeal against setting aside of Tribunal's orders by High Court - Doubt on correctness of earlier decision - Reference to larger Bench - Jurisdiction of Tribunal to refer cases to larger Bench - Interpretation of Customs Act, 1962 - Powers and functions of Tribunal - President's authority to refer cases to larger Bench.Analysis:The appeal before the Supreme Court arose from the Delhi High Court's judgment setting aside two orders of the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal's Bench of two members doubted the correctness of an earlier decision and referred the case to the President for a larger Bench. The High Court struck down these orders, citing the need to follow precedent and judicial discipline.In the Bakelite Hylam case, a three-member Bench classified goods under Tariff Item 84.60, but Customs authorities classified them differently. The importer appealed, relying on Bakelite Hylam's decision. The Tribunal's actions were challenged, leading to the High Court's decision.The Union of India argued that the Tribunal has the power to constitute larger Benches under Section 129 C of the Customs Act, 1962, to resolve conflicts. They contended that restricting the Tribunal's jurisdiction would hinder legal growth and evolution.The importer's counsel argued that the Tribunal's powers are limited to statutory provisions and do not include the authority to refer cases to larger Benches based on doubts about earlier decisions. They emphasized the need to follow precedent and leave corrections to higher courts.The Tribunal's powers, as outlined in Section 129 of the Act, include the authority to regulate its procedure and refer cases in case of differing opinions. The Tribunal functions as a court within its jurisdiction, with powers granted by statute and implied powers necessary for effective execution.While a Bench should not disregard earlier decisions lightly, judicial freedom to doubt correctness is essential. The President's power to refer cases to larger Benches is crucial for effective functioning, even if not explicitly stated for doubts on earlier decisions.The Supreme Court held that the Tribunal acted within its powers by referring the case to a larger Bench. The Court set aside the High Court's judgment, allowing the appeal with costs.In conclusion, the judgment clarifies the Tribunal's authority to refer cases to larger Benches when doubts arise on earlier decisions, ensuring effective judicial functioning within statutory limits.