Case Note & Summary
The Commissioner of Central Excise filed an appeal under Section 35G of the Central Excise Act, 1944 against the order dated 21st September 2004 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai. The CESTAT had set aside the order of the Commissioner of Central Excise (Appeals), which had confirmed the rejection of refund claims by the respondent, M/s Cable Corporation of India Ltd. The appeal was admitted on 16th January 2006 on two substantial questions of law: (1) whether the CESTAT was correct in allowing the appeal when central excise duty is recoverable on declared assessable value as per price lists under Rule 173C in accordance with Section 4 of the Central Excise Act, 1944, and (2) whether the CESTAT was correct in relying on the decision in GKN Drive Shafts Inds. Ltd. v. CCE Delhi (2004(62) RLT 389) when no price list was submitted for the period 1998-99. During the hearing, the appellant's counsel, Mr. Vijay Kantharia, argued that the impugned order was in breach of principles of natural justice for want of recording reasons, making it impossible to understand why the reasoned orders of both lower authorities were set aside. He submitted that before answering the substantial questions, the order should be set aside and the matter remanded to the Tribunal for a reasoned decision. The respondent's counsel, Mr. M.H. Patil, fairly conceded and expressed no objection to the remand. The Court considered the submissions and found that the impugned order was liable to be quashed for lack of reasons. The Court observed that the Tribunal is expected to know that its orders are subject to judicial review and that while reversing findings of lower authorities, it must deal with them and record reasons. Citing State of West Bengal v. Atul Krishna Shaw & Anr. (AIR 1990 SC 2205), the Court held that giving reasons is an essential element of administration of justice and a right to reasons is an indispensable part of a sound system of judicial review. Accordingly, the Court set aside the CESTAT order and remanded the matter to the Tribunal for fresh consideration and disposal by a reasoned order in accordance with law, without expressing any opinion on the merits of the case.
Headnote
A) Administrative Law - Natural Justice - Reasoned Orders - Requirement of Recording Reasons - The Tribunal's order was set aside for want of reasons, as it failed to deal with findings of lower authorities and did not record reasons for reversal, violating principles of natural justice and the right to reasons as an essential part of judicial review (Paras 5-6). B) Central Excise - Refund Claims - Assessable Value - Section 4 of Central Excise Act, 1944, Rule 173C - The appeal involved the question whether duty is recoverable on declared assessable value as per price lists under Rule 173C, but the Court did not decide the merits due to the procedural defect (Paras 1-2).
Issue of Consideration
Whether the CESTAT order was valid when it set aside the Commissioner's order without recording any reasons, and whether the appeal should be remanded for fresh consideration.
Final Decision
The impugned order of CESTAT dated 21st September 2004 is quashed and set aside. The matter is remanded to the Customs, Excise & Service Tax Appellate Tribunal, Mumbai for fresh consideration and disposal by a reasoned order in accordance with law. The appeal is disposed of accordingly with no order as to costs.
Law Points
- Principles of natural justice
- requirement of reasoned orders
- judicial review of tribunal decisions
- duty to record reasons while reversing lower authorities
