Case Note & Summary
The appellant, a manufacturer of components and parts of X-ray machines, approached the Supreme Court by special leave against a majority decision of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) dated 5 September 1995. The dispute concerned the proper constitution of a Bench to hear applications for rectification of mistakes under Rule 31-A of the CEGAT (Procedure) Rules, 1982. The CEGAT had held that such rectification applications could be heard by a Bench of two Members, despite the fact that the main appeal and an earlier rectification order had been passed by a Bench of three Members. The appellant contended that a Bench of less than three Members could not hear the rectification applications because the final order sought to be rectified was passed by a three-member Bench. The respondent Collector of Central Excise did not object to the two-member Bench, relying on the President's power under Rule 31-A to direct otherwise. The Supreme Court examined Section 35D of the Central Excises and Salt Act, 1944 and Rule 31-A of the CEGAT (Procedure) Rules, 1982. Rule 31-A provides that an application for rectification of mistake shall be heard by a Bench consisting of the Members who heard the appeal giving rise to the application, unless the President directs otherwise. The Court observed that the dissenting Member of the Tribunal, Shri G.A. Brahma Deva, had correctly held that any order passed in rectification proceedings would modify, amend or alter the final order, and therefore should be heard by a Bench of at least three Members. The Supreme Court held that while the President may direct a different Bench if original Members are unavailable due to retirement, death or other reasons, Rule 31-A does not clothe the President with jurisdiction to constitute a Bench of lesser number of Members than the original Bench which heard the appeal. A final order passed by a Bench of three Members cannot be modified by a Bench of lesser strength. The Court emphasized that multi-member tribunals provide mature deliberation and that judicial propriety and fairness require the same number of Members to constitute the Bench for rectification proceedings as far as feasible. Accordingly, the Supreme Court set aside the CEGAT order dated 5 September 1995 and allowed the appeals. It directed that the President may constitute an appropriate Bench subject to the observations, but no applicant can insist on early hearing or priority. The Court left open the question whether a rectification application lies against an order passed on a rectification application.
Headnote
A) Central Excise - Bench Composition for Rectification Proceedings - Rule 31-A of CEGAT (Procedure) Rules, 1982 - Same Bench to hear rectification; President may direct otherwise only as to identity of Members, not to reduce number below original Bench - CEGAT (Procedure) Rules, 1982, Rule 31-A; Central Excises and Salt Act, 1944, Section 35D - The final order in appeal was passed by a three-member Bench; rectification applications were directed to be heard by a two-member Bench by the President. The Court held that Rule 31-A requires the same Bench which passed the final order to hear rectification, and while the President can direct a different Bench if original Members are unavailable, he cannot constitute a Bench of lesser number than the original Bench. Held that the President lacked jurisdiction to constitute a two-member Bench for rectification of an order passed by a three-member Bench (Paras 6, 8). B) Judicial Discipline - Hierarchy of Benches - Final Order Cannot Be Modified by Lesser Bench - Central Excises and Salt Act, 1944, Section 35C(2) - A final order passed by a Bench of three Members cannot be modified, altered or amended by a Bench consisting of lesser Members; Full Bench superior to Division Bench, Division Bench to single Member. The Court reasoned that multi-member tribunals allow mature deliberation and that judicial propriety and fairness require the same number of Members to hear rectification proceedings as far as feasible. Held that the majority CEGAT decision was erroneous and unsustainable (Paras 8-9). C) Practice and Procedure - Rectification Application against Rectification Order - Leave Open - Central Excises and Salt Act, 1944, Section 35C(2) - The Court expressly left open whether a rectification application lies to rectify an order passed on a rectification application, as this aspect was not argued. Also clarified that no applicant can insist on early hearing or priority for pending rectification applications; President has discretion to constitute appropriate Benches considering workload, availability of Members, and practicability. Held that appeals allowed and CEGAT order dated 5.9.1995 set aside (Para 9).
Issue of Consideration
Whether an application for rectification of mistake can be heard by a Bench of two Members when the main appeal was heard by a Bench of three Members, and whether Rule 31-A of the CEGAT (Procedure) Rules, 1982 empowers the President to constitute a Bench of lesser number.
Final Decision
Appeals allowed; CEGAT majority order dated 5.9.1995 set aside; held that a final order passed by a Bench of three Members cannot be modified by a Bench of lesser Members; President cannot constitute a Bench of lesser number than original Bench; no order as to costs; left open whether rectification application lies against rectification order; clarified no applicant can insist on early hearing.
Law Points
- Rule 31-A of CEGAT (Procedure) Rules
- 1982 does not allow President to constitute a Bench of lesser number than original Bench
- final order by three-member Bench cannot be modified by two-member Bench
- same Bench should hear rectification unless impossible
- President may direct different Bench but not fewer Members
- no priority hearing for rectification applications.
