A.C.C. Unni, Member (J)
1. By Final Order No. M-337/CAL/95, dated 30-5-1995, a two Member Bench of the Eastern Regional Bench (ERB) of this Tribunal proposed reference to a Larger Bench of the Tribunal, the question presently raised before us. In the said case the Bench took a contrary view to the view taken by a two Member Co-ordinate Bench of the Southern Regional Bench (SRB) of the Tribunal in M.I. Metal Sections (P) Ltd. v. C.C.E. reported in 1994 (74) E.L.T. 869. Pursuant thereto by administrative order dated 26-10-1999, the Hon'ble President has directed hearing of the said matter by a Larger Bench as presently constituted.
2. The matter was listed for hearing before this Larger Bench on 1-11-1999 after notices were issued to M/s. Alliance Mills (Lessees) Ltd. (appellant in the appeal heard by the ERB) and to M/s. Eicher Motors Ltd., Pithampur, Distt. Dhar (M.P.) in whose Appeal [No. E/1291/95-NB (DB)] also a similar issue had arisen. These two matters were therefore taken up together for disposal.
3. None appeared for M/s. Alliance Mills (Lessees) Ltd. despite notice issued to them on 1-10-1999. M/s. Eicher Motors Ltd. were represented by Shri S. Madhavan, ld. Chartered Accountant. The Department was represented by Shri Sanjiv Srivastava, JDR.
4. Shri S. Madhavan, ld. Chartered Accountant submitted that M/s. Eicher Motors Ltd. had filed an Appeal [No. E/1291/95-NB (DB)] before this Tribunal (Delhi Branch) against the Order-in-Original of the Commissioner of Central Excise, Indore dated 31-12-1994 by which the Commissioner had disposed of duty demands arising from 32 show cause notices issued to the assessee involving common questions. When this appeal was listed before the Tribunal on 28-7-1997, according to the ld. Chartered Accountant, the Hon'ble Bench had on a suo motu basis, directed the appellants to file as many appeals as there were show cause notices which had culminated in the single adjudication order passed by Commissioner, though bearing multiple numbers. Ld. Chartered Accountant has contended that this direction of the Bench was passed notwithstanding the fact that the point relating to filing of multiple appeals had not come up at any stage of the proceedings before the Tribunal prior to 28-7-1997. No such direction had been passed by the Bench while hearing and disposing of the Stay Application filed by the appellants against the single Order-in-Original of the Commissioner. It is contended by the ld. C.A. that since the said direction of the Bench was passed on a suo motu basis, appellants were not in a position to argue the point as to whether multiple appeals were at all required to be filed under the provisions of the Central Excise Act against a common and combined order passed by the Commissioner with regard to numerous show cause notices. It is contended on behalf of the appellant that a single appeal was perfectly in order and valid when the order of the Commissioner was a single order disposing of multiple SCNs. Appellants maintain that there is no requirement in law that multiple appeals, equivalent to the number of SCNs with regard to which the combined order of the Adjudicating Authority has been passed, should be filed before the Tribunal.
5. Ld. Chartered Accountant then referred to the ERB decision in Alliance Mills (Lessees) Ltd. v. C.C.E., Calcutta [1996 (81) E.L.T. 615]. He submitted that the said decision is directly on the point and holds that filing a single appeal would be sufficient compliance of the provisions of Section 35B of the Central Excise Act, 1944 even if the impugned order had disposed of more than one SCN. He submitted that the contrary view taken by the SRB of this Tribunal in M.I. Metal Sections (P) Ltd. v. C.C.E. (supra) was not correct and the view taken by ERB in the case of Alliance Mills (Lessees) Ltd. was the correct view and therefore the same may be upheld and the contrary view taken in M.I. Metal Sections case over-ruled. In support of his contentions, he cited and relied on the following decisions, viz: -
(a) C.I.T. v. Hansa Agencies (1980) 121 ITR 147 - Mumbai High Court.
(b) Patel & Co. v. C.I.T. (1986) 161 ITR 568 - Gujarat High Court.
(c) C.I. T. v. K.H. Pandeya (1992) 202 ITR 705 - Patna High Court.
He submitted that though these judgments rendered by the three High Courts related to provisions in the Income Tax Act, the principles enunciated therein would fully apply to cases under the Central Excise Act also.
6. Ld. JDR appearing for the Revenue in the two Appeals argued for the upholding of the view taken by the SRB in M.L Metal Sections case (supra). He also relied on the Tribunal decision in Godrej & Boyce Mfg. Co. Ltd. v. C.C.E., Bombay-II reported in 1994 (71) E.L.T. 429.
7. We have considered the submissions and the case law cited before us and have perused the records of both the cases.
8. Relevant extracts (relevant for the present proceedings) of Order-in-Original passed by the Commissioner in Alliance Mills (Lessees) Ltd. case are as under :
"This is an appeal filed by the appellant against Order-in-Original of the Asstt. Collector confirming the demands raised through 36 Nos. of show cause notices on payment of cess duty on jute yarn, sacks and hessians captively consumed in the manufacture of jute bags. In course of adjudication the appellant argued that demands against serial No. 1 to 13 of the Annexure to the Order-in-Original related to cess on hessian and sacking cloth captively consumed in the manufacture of bags, which was not leviable m terms of CEGAT's judgment in the case of Chittavalarah jute Mills [1989 (30) E.L.T. 157A (Tribunal))]. They also argued that demands against Sl. No. 14 to 18 were time-barred and there was violation of natural justice in respect of demands against Sl. No. 19 & 20 of the said Annexure since they had not received the demand notices.
The Asstt. Collector had not accepted the appellant's plea in regard to incidence of cess duty on intermediate jute products relying on the Supreme Court's judgment in the matter of Baranagar Jute Factory Co. v. Inspector of Central Excise [1992 (57) E.L.T. 3]. He also ruled out the time-bar plea on the ground that the Hon'ble Supreme Court granted stay order and they also committed to abide by the Supreme Court's decision. In respect of non-receipt of the two show cause notices referred to hereinbefore the Asstt. Collector had not accepted their plea since they had obtained copies of all the documents on 30-7-1992 and furnished a certificate in this regard.
Being aggrieved the appellant filed the purported appeal repeating their earlier arguments. At the time of personal hearing on 4-1-1994 at 10.30 hrs. P.K. Das, Advocate submitted written submissions and also argued orally reiterating their previous submissions."
The Adjudicating Authority disposed of by a single order 36 SCNs issued to the assessee. In Appeal, Commissioner (Appeals) also disposed of the appeal against the Order-in-Onginal by a single Order-in-Appeal. Neither order gave numbers in relation to the number of SCNs. When the matter came up before the ERB in appeal, a preliminary objection was taken by the Departmental Representative against the filing of only one appeal before the Tribunal since the Order-in-Original had disposed of 36 SCNs. Reliance was placed by the DR on the SRB decision in M.I. Metal Sections directing filing of as many appeals as there were SCNs. The ld Counsel for the assessee had on the other hand contended that under Sections 35 and 35B of the Central Excise Act, 1944, only one appeal needs to be filed against one order. The filing of a single appeal was therefore fully maintainable, according to the ld. Counsel for the assessee. After considering the submissions made by the ld. Counsel for the assessee relying on various decisions of the High Courts dealing with the same question (though under the Income Tax Act), the ERB distinguished the decision in M.I. Metal Sections case on the ground that in the M.I. Metal Sections case 36 SCNs has been disposed of by one common order, though only one number had been given in the common adjudication Order. In the case of Alliance Mills (Lessees) Ltd., on the other hand, the adjudication order had individually dealt with and discussed each of the 36 SCNs though the order was a combined and consolidated one. Therefore, the ERB of the Tribunal had taken the view that one composite appeal would suffice and no separate appeals for each of the 36 SCNs need to be filed before the Tribunal.
9. Before proceeding further in the matter, it would be appropriate to refer to the relevant provisions of the Central Excise Act and Rules. The relevant provisions of the Central Excise Act, 1944 reads as follows :
"SECTION 35B. Appeals to the Appellate Tribunal. - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order -
(a) a decision or order passed by the [Commissioner of Central Excise] as an adjudicating authority;
(b) an order passed by the [Commissioner (Appeals)] under Section 35A;
10. As would be seen from the above, Section 35B(1) gives an aggrieved person a right to appeal to the Tribunal against orders passed by the authorities mentioned therein. The Section is basically intended to provide for a right of appeal to an aggrieved party before the Appellate Tribunal, as the right of appeal is a statutorily conferred right. Section 35B(1) thus spells out the said right and identifies the authorities whose orders are appealable and the types of orders passed by them. In this respect the provisions of Section 35B(1) are not different from the provisions of Section 246(1) of the Income Tax Act which had been considered by the Bombay High Court in C.I.T. v. Hansa Agencies case, Gujarat High Court in Patel & Co. v. C.I.T. and Patna High Court in CIT v. K.H. Pandeya, which have been relied upon by the ld. Chartered Accountant. In the Bombay High Court judgment, the Hon'ble High Court observed that unless there is express provision in the Act or in the Rules for the mandatory filing of two appeals, or a clear implication to that effect, two appeals are not required and a composite appeal could be filed (as was done in the said case), it was further observed that merely because appealable orders are separately indicated in separate clauses of Section 246(1), it wouid not follow that separate appeals have to be filed from each such order. In Patel & Co. case, the Gujarat High Court had observed that the right of appeal conferred by the statute has to be liberally construed and when the appeal lies to the same authority, it would be too technical an approach to adopt and to reject an appeal on the ground that separate appeals ought to have been filed instead of a composite one. The Hon'ble High Court had observed "The right of appeal is by way of a remedy provided by the statute and should not ordinarily be denied to the assessee unless the taw prohibits it". It further held that since neither the Act nor the Rules (under the Income Tax Act) prohibits a single composite appeal, the view taken by the Income Tax Appellate Tribunal that a composite appeal would not lie to the Tribunal and the assessee ought to have preferred separate appeals, was not sustainable. The Patna High Court in C.I.T. v. K.H. Pandeya agreed with the decisions of C.I.T. v. Hansa Agencies and Patel & Co. v. C.I.T. (among others) for the same reasons.
11. Ld. Chartered Accountant has relied on the said decisions as also the observations made by the ERB in the Alliance Mills (Lessees) Ltd. order [M-337/Cal/95 - 1996 (81) E.L.T. 615 (Tribunal)] in which case also the said decisions had been cited and relied upon. The earlier Full Bench (majority) decision of the Tribunal in Ekantika Copiers (P) Ltd. v. C.C.E. [1991 (56) E.L.T. 350 (T)] was distinguished on facts by the Bench. In Ekantika case it was held that as many appeals as there were Orders-in-Orignal have to be filed before the Tribunal under Section 35B of Central Excise Act. The ERB in the Alliance Mills case had distinguished the Larger Bench decision in Ekantika Copiers case on the basis of facts. In the Ekantika Copiers case there were 13 Orders-in-Original and 13 appeals had been filed before the Collector (Appeals). The Collector (Appeals) had disposed of all the 13 Appeals by a common order. When the matter came up before the Tribunal, the Tribunal took the view that the mere fact that a common order had been passed by the Collector (Appeals) on the 13 Orders-in-Original cannot be a ground for filing a single appeal before the Tribunal. Therefore, the majority of the Members of the Larger Bench took the view that the appellants should file as many appeals as the number of Orders-in-Original. The minority (two Members), however, held that following the Supreme Court decision in Narahari and Ors. v. Shankar and Ors. [AIR 1953 SC 419] and other decisions referred to in the order, that one single appeal before the Tribunal would suffice in a situation where the lower Appellate Authority had passed a common order disposing of more than one appeal filed before him. In the concurring but separate order recorded by the Member (Technical) in the Alliance Mills case, the ld. Member had also made the observation that the majority judgment in the Ekantika Copiers case had not noticed the Apex Court's observations in Narahari and Ors. v. Shankar and Ors. in which it was held that it was well settled that where there has been one trial, one finding and one decision, there need not be two appeals even though two decrees might have been drawn up.
12. We notice that neither side has brought to our notice any provision in the Central Excise Act or the rules made thereunder existing at the relevant period making the filing of more than one appeal before the Tribunal mandatory where the impugned order disposes of more than one SCN. There is only one Public Notice (No. 3 of 1986, dated 30-5-1986) wherein it has been mentioned (para 5) that there is a "practice" of filing an equal number of appeals where the lower authority passes a "multiplex order" disposing of a number of appeals. Attention was however drawn to the recent amendment to the CEGAT (Procedure) Rules, 1982 by which Rule 6A was incorporated making the position explicit. The said amendment dated 13-5-1999 reads as follows :
"6A. The number of appeals to be filed. - Notwithstanding the number of show cause notices, price lists, classification lists, bills of entry, shipping bills, refund claims/demands, letters or declarations dealt with in the decision or order appealed against, it shall suffice for purposes of these rules that the appellant files one Memorandum of Appeal against the order or decision of the authority below, along with such number of copies thereof as provided in Rule 9.
(1) In a case where the impugned Order-in-Appeal has been passed with reference to more than one Orders-in-Original, the Memoranda of Appeal filed as per Rule 6 shall be as many as the number of the Orders-in-Original to which the case relates insofar as the appellant is concerned.
(2) In case an impugned order is in respect of more than one persons, each aggrieved person will be required to file a separate appeal (and common appeals or joint appeals shall not be entertained)."
13. However, neither side raised the question of retrospective nature of the said amendment.
14. We observe that the view adopted in SRB decision in M.I. Metal Sections (P) Ltd. (and relied on by the ld. JDR) is to the effect that though it may be competent for the lower Authority for the sake of expediency - to pass one compendious order covering more than one show cause notice dealing with a number of different matters, the very fact that there were separate SCNs showed that lis lie in the context of separate parameters and the issues reflected in each of the SCNs need to be decided in the context of the parameters governing each SCN. Since each SCN culminates in an order or a decision -either in favour of the assessee or against him - the adjudicating/appellate authority passing an order on each of the SCNs has to apply his mind to the facts as set out in each of the SCNs, even if the authority chooses to pass a single order on a number of SCNs. Therefore, the common order has to be taken as consisting of several orders on each of the SCNs. It was therefore held that as many appeals as SCNs that have been decided in the order will have to be filed before the Tribunal.
15. We observe that the Supreme Court decision in Narahari and Ors. v. Shankar and Ors. to which a reference has been made in the Alliance Mills case considered the question of applicability or res judicata to a case where two appeals were filed from the same order but in relation to one of which the bar of limitation applied. The appeals were from a single order passed as a result of one trial, one finding and one decision. Only two decrees were drawn up. The question considered was whether failure of the plaintiff to file appeal against one of the decrees within the period of limitation would result in the other appeal also becoming non-maintainable. The observations made in the said Judgment about the maintainability of one appeal even if there were two decrees were made in that context. The observations of the Apex Court in Narahari and Ors. case appears to lend support (though indirectly) to the contention of the assessees before us that once a judicial or quasi-judicial authority passes a compendious order disposing of a number of SCNs, for purposes of filing appeal to a higher authority, there is no need to prefer as many appeals as there were SCNs. The fact that the compendious order was passed at the stage of Order-in-Original or the Order-in-Appeal does not really make any difference in principle. This principle would apply both in the case of Section 35 and 35B. The distinctions sought to be made on the basis of the number of orders passed at the stage of Order-in-Original or Order-in-Appeal would not in our opinion, make any difference. As has been observed by the Bombay High Court in Hansa Agencies case and Gujarat High Court judgment in Patel & Co. case, so long as the Act or the Rules do not bar filing of a single appeal before the higher Appellate Authority from a compendious order of the lower authority, there can be no objection to an appellant filing a single appeal before the Tribunal from the order of the Commissioner or the Commissioner (Appeals), as the case may be, from a single order disposing of more than one SCN. We are therefore unable to agree with the majority opinion in Ekantika Copiers case and the SRB decision in M.I. Metal Sections case. We are in agreement with the view taken in the Alliance Mills case that one Appeal to the Tribunal would suffice where the impugned order is one - irrespective of the number of SCNs. We are of the view that since there is no bar in the Act or in the Rules to the passing of consolidated orders by the adjudicating authority or the first appellate authority, a single appeal filed against such an order cannot be held to be irregular only for the reason that the impugned order had dealt with more than one SCN. Recent amendment to CEGAT (Procedure) Rules by way of insertion of Rule 6A further confirms the view taken by us.
16. The Reference Application to this Larger Bench is disposed of in the above terms.