Customs Tribunal's Third Member lacks jurisdiction, President's direction invalid. Appeals require majority opinion.

The High Court held that the Third Member of the Customs, Excise & Service Tax Appellate Tribunal lacked jurisdiction beyond resolving differences among original Bench Members. The President's direction for points of difference formulation by a single remaining Member was deemed invalid. Emphasizing Section 129C(5) of the Customs Act, the Court clarified that appeals must be decided by a majority opinion of the Bench. Following the retirement of one Bench Member, the President should have assigned the appeal to a new Division Bench. The Court set aside previous orders, directing a fresh hearing by a Division Bench and allowing the petition with no costs.

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Issues Involved:

1. Legality of the Third Member's jurisdiction to hear the matter.
2. Validity of the President's direction to the remaining Member to formulate points of difference.
3. Interpretation and application of Section 129C(5) of the Customs Act, 1962.
4. Procedural propriety following the retirement of one of the original Bench Members.

Issue-wise Detailed Analysis:

1. Legality of the Third Member's jurisdiction to hear the matter:
The petition challenges the opinion dated 7th March 2006 and the communication dated 28th March 2006 fixing the hearing before the Third Member of the Customs, Excise & Service Tax Appellate Tribunal. The High Court noted that Section 129C(5) of the Customs Act, 1962, stipulates that the Third Member is required to hear only the points on which there is a difference of opinion among the original Bench Members. The Third Member cannot derive any further jurisdiction, and the matter must be placed before the original Bench for disposal according to the majority opinion.

2. Validity of the President's direction to the remaining Member to formulate points of difference:
The President of the Tribunal directed the remaining Member, who was still in service, to formulate the points of difference arising from the two opinions. The High Court found this direction to be erroneous, as Section 129C(5) indicates that a difference of opinion can only exist between Members who constitute a Bench. In the absence of the original Bench due to the retirement of one Member, no such points could be recorded by the remaining Member alone.

3. Interpretation and application of Section 129C(5) of the Customs Act, 1962:
The High Court emphasized that Section 129C(5) comes into play only when Members of a Bench differ in opinion. If Members are equally divided, they must state the points of difference and refer the matter to the President. The President may then assign the matter to another Member or hear it himself. The appeals must be decided according to the majority opinion, including the Members who first heard the case. The Court clarified that a single remaining Member cannot state points of difference and make a reference to the President in the absence of a Bench.

4. Procedural propriety following the retirement of one of the original Bench Members:
The retirement of one Member of the original Bench complicated the situation. The High Court noted that upon the retirement of the Member (Technical), the original Bench ceased to exist. Consequently, the President should have assigned the appeal to a new Division Bench as required by Section 129C(2) of the Act. The entire exercise of directing the remaining Member to formulate points of difference was found to be contrary to statutory provisions.

Conclusion:
The High Court quashed and set aside the President's order directing the remaining Member to formulate points of difference, the opinion dated 7th March 2006, and the communication dated 28th March 2006. The Tribunal was directed to hear the appeals afresh without being influenced by the preceding proceedings. The President was instructed to ensure that the appeals are heard by a Division Bench in accordance with Section 129C(2) of the Customs Act, 1962. The petition was allowed, and the rule was made absolute with no order as to costs.

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