HC Quashes CESTAT Orders for Non-Compliance with Customs Act, Directs Division Bench to Specify Points of Difference.

The HC quashed CESTAT's order dated 6-12-2005 and the reference made on 12-8-2005, citing non-compliance with Section 129C(5) of the Customs Act, 1961. The Division Bench was directed to formulate specific points of difference and refer them to the President. The petition was allowed, with the rule made absolute, and no costs were ordered.

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Issues Involved:
1. Validity of the order dated 6-12-2005 by CESTAT.
2. Compliance with Section 129C(5) of the Customs Act, 1961.
3. Proper formulation and reference of points of difference by the Division Bench.
4. Jurisdiction and role of the Third Member and the President of CESTAT.
5. Procedural irregularities in handling the application by the Tribunal's Registry.

Detailed Analysis:

1. Validity of the order dated 6-12-2005 by CESTAT:
The petition challenges the order dated 6-12-2005 made by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Mumbai. The Division Bench of CESTAT expressed differing opinions on an appeal, leading to a reference to the President of CESTAT. The Third Member took up the hearing despite a pending Rectification of Mistake Application, leading to a challenge in the High Court. The High Court quashed the Third Member's order and directed compliance with Section 129C(5) of the Customs Act, 1961.

2. Compliance with Section 129C(5) of the Customs Act, 1961:
Section 129C(5) mandates that if members of a Bench differ in opinion, they must state the specific point or points of difference and refer them to the President. The High Court emphasized that this provision is substantive, not merely procedural. The Division Bench failed to comply, as their reference lacked specific points of difference, instead posing a general question on whether the appeals should be allowed or rejected.

3. Proper formulation and reference of points of difference by the Division Bench:
The Division Bench's reference was deemed invalid as it did not state specific points of difference. The High Court highlighted that the legislative intent is to ensure that appeals are disposed of by the original Bench, with the Third Member only resolving specific points of difference. The High Court directed the Division Bench to formulate and state specific points of difference and then refer them to the President.

4. Jurisdiction and role of the Third Member and the President of CESTAT:
The Third Member and the President derive their jurisdiction from the specific points of difference stated by the original Bench. They do not have the authority to decide the entire appeal. The High Court reiterated that the Third Member's role is limited to resolving the stated points of difference, and the appeal must be decided by the original Bench in accordance with the majority opinion.

5. Procedural irregularities in handling the application by the Tribunal's Registry:
The petitioner's application to the President of CESTAT was mishandled by the Tribunal's Registry, which directed the petitioner to file it in Mumbai. The High Court criticized this action, stating that the application should have been placed before the President. The Division Bench's subsequent order on the application was also invalid, as it was addressed to the President.

Conclusion:
The High Court quashed the order dated 6-12-2005 and the reference made on 12-8-2005, directing the Division Bench to state specific points of difference and refer them to the President as per Section 129C(5) of the Customs Act. The petition was allowed, and the rule was made absolute without any order as to costs.

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