V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by M/s. Rohit Pulp & Paper Mills Ltd. is whether they are aggrieved person within the meaning of Section 35 of the Central Excise Act for filing an appeal before the Collector (Appeals)?
2. Shri R. Parthasarthy, learned Advocate submitted that the appellants had purchased centrifuge machine from M/s. Penwalt India Ltd. for the purpose of pollution control on payment of central excise duty @ 15.75%; that in terms of Notification No. 78/90 duty payable was only 5% as it was intended for use in pollution control plant; that the Assistant Collector rejected the refund claim filed by M/s. Penwalt India Ltd., under adjudication order dated 14-7-1992, as the condition of possessing of a certificate from a specified officer to the effect that the goods were intended for pollution control purpose was not satisfied. The certificate was produced much after clearance of the goods. The learned Advocate further submitted that M/s. Penwalt India Ltd. did not file appeal in view of the amendment made in Section 11B incorporating the unjust enrichment principle; that the appellants being aggrieved person filed an appeal before the Collector (Appeals), who under the impugned order rejected the appeal holding that the appellants had no right under the law to dispute the adjudication order against which the assessee himself had no grievance. The learned Advocate mentioned that Section 35 of the Central Excise Act provides that any person aggrieved by any decision or order passed by a Central Excise Officer lower in rank than Collector of Central Excise may appeal to the Collector (Appeals); that the words used are ‘any person aggrieved’ and not ‘party to the dispute aggrieved’; that the phrase ‘any person aggrieved’ is much wider in scope than the ‘party involved’; that as the incidence of duty has been borne by them they have interest in the refund of the duty by the Department and as such they are aggrieved person; that M/s. Penwalt India did not pursue the refund claim in appeal as principle of unjust enrichment was applicable to them since incidence of duty was passed on to the appellants; that Section 11B also empowers a buyer to get the refund, if he had not passed on the incidence of such duty and as such the appellants are covered by the phrase ‘any person aggrieved’ mentioned in Section 35 of the Central Excise Act. He further mentioned that the issue regarding person aggrieved has come up before the Hon’ble Supreme Court in the case of Northern Plastics Ltd. v. Hindustan Photofilms Mfg. Co. Ltd., 1997 (91) E.L.T. 502 (SC) wherein it was held that phrase ‘person aggrieved’ is wider than the phrase ‘party aggrieved’ and a third party may be treated to be legally aggrieved, if he is able to show that he has a direct interest in the goods involved in the adjudication. He also referred to the decision in the case of Tamil Nadu Newsprint and Paper Ltd. v. U.O.I., 1993 (66) E.L.T. 562 (Madras), wherein it was held that petitioner who is ultimately to bear the burden of duty has right to challenge the order in the writ petition. Learned Advocate submitted that applying the ratio of these two decisions the appellants have locus standi and are the person aggrieved in terms of Section 35B of the Central Excise Act and the order passed by the Collector (Appeals) is liable to be set aside.
3. Countering the arguments, Shri Ashok Kumar, learned D.R., submitted that in the present matter claim for refund of duty was filed by M/s. Penwalt India Ltd. and not by the appellants; that once the refund claim was rejected by the Asstt. Collector, the right course was that M/s. Penwalt India Ltd., being aggrieved person, must have filed the appeal; that the appellants herein who may have interest in the refund of the duty from the Department does not become aggrieved person. Section 11B of the Act only provides that a buyer can get refund of the duty, if they have not passed on incidence of the duty and accordingly they may file a refund claim. Section 11B of the Central Excise Act does not empower buyers to directly go in appeal against an order rejecting the refund claim which was not filed by them; that the appellants are seeking to enlarge the scope which is not possible; that they could not have filed the refund claim when the Section 11B was amended as it was time-barred and by process of filing the appeal they want to make time-barred refund claim alive.
4. We have considered the submissions of both the sides. The well known judgment which laid down the definition of the phrase ‘aggrieved person’ is James, L.J. in Re Sidebotham; Ex.j. Sidebotham (1818) 14 Ch.D 458CA, wherein it was observed that the words ‘person aggrieved in Section 71 of the Bankruptcy Act of 1869 meant “Not really a person who is disappointed of a benefit which he might have received, if some other order had been made. A ‘person aggrieved’ must be a man who had suffered a legal grievance, a man against whom a decision has been pronounced which had wrongfully deprived him of something; or wrongfully refused him of something, or wrongfully affected his title to something.” As per Corpus Juris Secundum, Vol. IV, “Broadly speaking a party or a person is aggrieved by a decision when, only when, it operates directly and injuriously upon his personal pecuniary or proprietory rights. Hon’ble Supreme Court in Adi Pherozshah Gandhi v. H.M. Seervai, Advocate General of Maharashtra, 1970 (2) SCC 484 observed that any person who feels disappointed with the result of a case is not ‘a person aggrieved’. He must be disappointed of a benefit which he would have received if the order had gone the other way. The order must cause him a legal grievance by wrongfully depriving him of something. It is no doubt a legal grievance and not a grievance about material matters but his legal grievance must be a tendency to injure him.”
5. Hon’ble Supreme Court in the case of Northern Plastic has held that “in order to earn a locus standi as ‘person aggrieved’ other than the arraigned party before the Collector of Customs as an adjudicating authority it must be shown that such a person aggrieved being third party has a direct legal interest in the goods involved in the adjudication process.” The Supreme Court explained the situation when a third party may get legitimately aggrieved by the order of the adjudicating authority “if it is contended by such a third party that the goods imported really belonged to it and not to the purported importer or that he had financed the same, and therefore, in substance he was interested in the goods and consequently the release order in favour of the purported importer was prone to create a legal injury to such a third party which is not actually arraigned as a party before the adjudicating authority and was not heard by it.” In the present ma no legal injury has been caused to the appellants by the order of the Assistant Collector rejecting the refund claim. They have their legal right to claim the excess duty paid by them from their supplier. Their legal right has not been affected by the adjudicating order passed by the Assistant Collector. In the absence of any legal grievance they cannot be considered to be ‘aggrieved person’ within the meaning of Section 35 of the Central Excise Act. Similarly the decision of the Madras High Court in Tamil Nadu Newspaper case is not applicable to the facts of the present matter as the petitioner therein intervened at the original stage by writ petition and not at the appeal stage. We, therefore, hold that the Collector (Appeals) was right in holding that the Appellants had no right to dispute the adjudicating order passed by the Assistant Collector. Accordingly, the appeal filed by them is rejected.