Appeals to Tribunal - Reference to Third Member - COMMISSIONER challenges CESTAT President's choice of Third Member - High Court declines to interfere
THIS is a strange case where the Commissioner of Central Excise has challenged the decision of the President of the CESTAT in his choice of the Third Member.
In SRJ PEETY STEELS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, AURANGABAD - , at the stay stage, there was a difference of opinion between the two Members of the Division Bench.
Mr. Ashok Jindal, Hon'ble Member (J) felt that the applicant has made out a case of 100% waiver of pre-deposit and accordingly he proposed waiver of pre-deposit of entire amount of duty and penalty and stay of demand thereof during the pendency of the appeal.
Mr. P R Chandrasekharan, Hon'ble Member (T) differed and directed a pre-deposit of 25% of the duty adjudged.
Mr. SS Kang, Hon'ble Vice President as Third Member agreed with the Hon'ble Member (Judicial) and waived pre-deposit of duty, interest and penalty.
The case came up for final hearing before the Bench of Mr. SS Kang, Hon'ble Vice President (as Member Judicial) and Mr.PK Jain, Hon'ble Member (T).
Mr. Kang allowed the appeal of the assessee and set aside the impugned order.
Mr.PK Jain differed and proposed to uphold the impugned orders and dismiss the appeals.
So, the matter has to go again to the Third Member and here it took an interesting turn.-
Revenue came to know that the Hon'ble President of CESTAT has nominated Mr. Ashok Jindal as Third Member. Revenue felt that it was necessary in the interest of justice to nominate a member who can consider the point of difference afresh, instead of nominating a member who has already formed a view about the matter at the time of hearing of stay Application. Therefore, it was inappropriate to nominate him. Therefore, to ensure the principles of natural justice and fair play, the Commissioner of Central excise, Aurangabad filed a Miscellaneous Application before the President, CESTAT to nominate the Third Member to resolve the difference of opinion to either the Hon'ble President or any Member, who has not earlier heard the matter. The President did not relent and stuck to his decision to nominate Mr. Ashok Jindal as the Third Member.
The aggrieved Commissioner took the matter in writ petition to the Aurangabad Bench of the Bombay High Court challenging the President's order nominating Mr. Ashok Jindal as Third Member as totally illegal, bad in law and inconsistent with the settled Judicial precedents, arbitrary and not in accordance with the principles of natural justice. The High Court by its order dated 14.03.2014 - directed that Mr Ashok Jindal to whom the matter is referred, shall defer the hearing till 26th March, 2014.
The High Court has now disposed of the petition observing that the Court cannot interfere in the matter. Without expressing its opinion, the High Court left the matter to the President of the Tribunal for passing appropriate orders. It would be open for the President to reconsider the issue for making reference of the matter to himself or to another learned Member for hearing and deciding the same. The learned President may take appropriate decision in the facts of the case.
So, the question whether a Member who had already formed an opinion at the Stay Stage can be the Third Member at the Final Stage is left undecided. Apparently it is not illegal - otherwise the High Court would have passed an order.
This would also raise a question whether those Members who were earlier associated with the case can be Members of the Larger Bench. In fact in one case, the two Members of the Division Bench which referred the matter to a Larger Bench constituted (along with a Third Member) the Larger Bench!
Ultimately it is all confusing and pretty costly for the assessee.
Please see