ORDER
K.K. Usha, J. (President)
1. The question raised for the consideration of the Larger Bench is as follows :-
“Whether an order of review which has been passed under Sub-section (1) of Section 35E of the Central Excise Act by the Board within one year from the date of the order of the Commissioner (adjudicating authority) and has been issued to the Commissioner (executive authority) beyond the said period of one year for the purpose of preferring appeal to the Tribunal against the latter order is hit by time-bar under Sub-section (3) of the said section.”
The reference was required since conflicting views are expressed by Benches Coordinate jurisdiction. In Commissioner of Customs, Mumbai v. Fujitus India Telecom Ltd. – 2001 (138) E.L.T. 878 (Tri-Mumbai) and Commissioner of Customs (Import), Mumbai v. Vardhaman Acrylic Ltd. – 2002 (148) E.L.T. 360 (Tri-Mumbai) the West Zonal Bench of the Tribunal has taken the view that it is not the date on which order is passed under Sub-section (1) of Section 35E but the date on which order was issued is relevant for the purpose of computing the period of limitation of one year under Sub-section (3) of Section 35E. On the other hand, in GTC Industries v. CCE – 2002 (144) E.L.T. 632 (T) Northern Bench took the view that it is the date on which the review order was passed is the relevant date. It is submitted before us that the decision in GTC Industries was taken in appeal by the assessees before the Supreme Court. After condoning the delay special leave petitions were dismissed in Kanpur Cigarette Ltd. v. Commissioner – 2003 (157) E.L.T. A41 (S.C.) and Tamil Nadu Tobacco Co. Ltd. v. Commissioner – 2003 (156) E.L.T. A214 (S.C.).
2. In the present case, the order-in-original was passed by the Commissioner of Central Excise, Chennai-II on 31-12-1997. Central Board of Excise & Customs reviewed the Commissioner’s order on 29-12-1998. The order of review was issued on or after 11-3-1999 and the same was received by the Commissioner on 26-4-1999. The appeal was filed by the Revenue on 21-5-1999. It was contended on behalf of the assessee-respondent that the appeal of the Revenue is not maintainable on account of the fact that the review order was issued beyond the period of one-year from the date of the Commissioner’s order. Reliance was placed on the above mentioned two decisions of West Zonal Bench of the Tribunal. The learned SDR contended that Board’s order of review ‘was made’ within one year from the date of the Commissioner’s order. Since the order ‘was made’ within the period of limitation prescribed under Sub-section (3) of Section 35E, the appeal filed cannot be held as not maintainable.
3. The relevant provisions of the Statute are as follows :-
“SECTION 35E. Powers of Board or Commissioner of Central Excise to pass certain orders. – (1) The Board may of its own motion, call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order.
(2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order.
(3) No order shall be made under Sub-section (1) or Sub-section (2) after the expiry of one year from the date of the decision or order of the adjudicating authority.
(4) Where in pursuance of an order under Sub-section (1) or Sub-section (2) the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Commissioner (Appeals) within a period of three months” from the date of communication of the order under Sub-section (1) or Sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 35B shall, so far as may be, apply to such application.
In Commissioner of Customs (Import), Mumbai v. Vardhman Acrylic Ltd. the Bench followed the ratio of the earlier decision in Commissioner v. Fujitus India Telecom Ltd. In Fujitus India Telecom the Tribunal after referring to provisions contained under Sub-section (2) and Sub-section (3) of Section 129D of the Customs Act held as follows :-
“6. In terms of the aforesaid provisions, the exercise of powers by the Commissioner is reflected in the direction made to the particular authority to make an application. Now the word ‘direct’ is the significant. It is not sufficient for the Reviewing Commissioner to make an order in file and say that was the date on which the direction was made. For fulfilling the condition, a communication must be made to the officer who is to make an application to the Commissioner (Appeals) in other words, the direction is deemed to be made on the date of issue of the decision of the Reviewing Commissioner.
The date of issue of the decision of the Commissioner as we have stated above was 10-6-1998. From the date of issue of the Asstt. Commissioner’s order i.e. 16-5-1997, this order was clearly passed beyond the period of one year. Therefore, it suffers from the limitation laid down in Sub-section (3) of Section 129D.”
A reference was made to the decision of the Hon’ble Supreme Court in CCE v. M.M. Rubber Co. – 1991 (55) E.L.T. 289 (S.C.) (wrongly referred as UOI v. Mahendra & Mahendra Ltd.) and it was observed that the Apex Court made is a conscious distinction between the acquisition of knowledge of a particular order made by an officer of Customs. Where the question of limitation comes up as for the department is concerned, it is the date on which the order is made and not the date on which the communication is made. As far as the affected person is concerned, it is not the date of the decision on file but the date on which it is communicated.
4. In GTC Industries Ltd. Northern Bench took a different view taking into consideration the language used in Sub-section (1) of Section 35E and also Sub-sections (3) and (4). While coming to the conclusion that it is the date on which the order is passed is relevant for computing the period of one year under Sub-section (3), it was observed as follows :-
“8. On the question of limitation also we are not inclined to accept the submission made on behalf of the respondent. Sub-section (1) of Section 35E provides that the Board shall by order direct the Commissioner to apply to the Appellate Tribunal in the matter of challenge of the order passed by the adjudicating authority. Sub-section (3) provides that no such order shall be made after the expiry of one year from the date of the decision or order of the adjudicating authority. Sub-section (4) provides that once order is thus passed the appeal has to be filed within a period of three months from the date of communication of the order (emphasis supplied). Thus, it is clear from the language of the three sub-sections that legislature has taken care to provide for period of limitation for different stages of the proceedings. The contention raised by the learned Counsel for the respondent is that the provisions contained under Sub-section (1) regarding passing an order and directing the Commissioner to file an appeal takes in not only mere passing of the order or issuing a direction but communication of the same also. If that be so, the further contention raised is that the communication of the order shall be within one year from the date of the impugned order passed by the adjudicating authority. We find it difficult to accept this contention since under Sub-section (4) there is a specific provision regarding filing of an appeal within three months from the date of ‘communication of the order’. If the provision under Sub-section (1) itself takes in the concept of communication also then there is no need to make a further reference to the date of communication in Sub-section (4). Sub-section (4) would have been worded as ‘from the date of direction.’
9. The decision relied on by the learned Counsel, according to us, is of no help to interpret the provisions with which we are concerned. The question came up for consideration before the Delhi High Court was whether the application for refund filed under Section 27(1)(ii) of the Customs Act, 1962 is barred by limitation provided under Sub-clause (b). An application for refund has to be made before the expiry of six months from the date of payment of duty. Interpreting the terms of Section Delhi High Court took the view that when it is provided that an application has to be made within six months, it means that the application has to be received within a period of six months. It is not sufficient that the application prepared and posted under certificate of posting within six months. We do not think that similar interpretation can be given to the provisions contained under Sub-sections (1); (3) and (4) of Section 35E in the scheme of the section as well as in the light of the wording contained therein. We, therefore hold that the appeals of the Revenue are not barred by limitation. We reject both the preliminary objection raised on behalf of the respondent and hold that the appeals filed by the Revenue are maintainable.”
We will now consider whether the reasoning in GTC Industries is in any way contradictory to the ratio of the decision in CCE v. M. M. Rubber Co. referred in CC, Mumbai v. Fujitus India Telecom Ltd. On going through the decision of the Apex Court we find that the view taken in GTC Industries is strictly in accordance with the ratio of the above decision. The issue that came up for consideration before the Apex Court was whether it is the date of the order passed by the adjudicating authority i.e. starting point for computing the period of limitation under Sub-section (3) of Section 35E or the date on which the order was served on the assessee. The order-in-original was dated 28-11-1984. Copy of the order was received by the assessee on 21-12-1984. The Board after consideration of the order directed the Collector of Central Excise, Madras by order dated 11-12-1985 to apply to the Tribunal under the provisions of Section 35E(1) for correct determination of the points arising out of the aforesaid order. The contention taken by the assessee before the Tribunal was that the relevant date of the adjudicating authority’s order for the purpose of Section 35E(3) should be taken as 28-11-1984 and not 21-12-1984. If the relevant date is 21-12-1984 the Board’s order under Section 35E(1) dated 11-12-1985 was beyond the period of one year provided under Sub-section (3) of Section 35E. The Hon’ble Supreme Court took the view that the period of one year fixed under Sub-section (3) of Section 35E should be given its literal meaning and so construed the impugned direction of the Board was beyond the period of limitation prescribed therein and therefore invalid and ineffective. While coming to the above conclusion the Apex Court made reference to two decisions of Madras High Court under the Income Tax Act. In Muthia Chettiar v. CIT – ILR 1951 Mad. 815, Section 33A(1) of the Act came up for consideration. The above Section authorised the Commissioner to suo motu call for the records of any proceedings under the Act in which an order has been passed by any authority subordinate to him and pass such order thereon as he thinks fit. The proviso, however, stated that the Commissioner shall not revise any order under that Sub-section “if the order (sought to be revised) has been made more than one year previously”. Construing this provision the High Court of Madras held that the power to call for the records and pass the order will cease with the lapse of one year from the date of the order by the subordinate authority and the ratio of date of the knowledge of the order applicable to aggrieved party is not applicable for the purpose of exercising suo motu power. Similarly, in Vishwanathan Chettiar v. Commissioner of Income Tax, Madras 25 ITR 79 construing the time limit for completion of an assessment under Section 34(2) of the Income Tax Act, 1922 which provided (hat it shall be made within four years from the end of the year in which the income, profit and gains were first assessable, it was held that the time limit of four years for exercise of the power should be calculated with reference to the date on which the assessment or reassessment was made and not the date on which such assessment or reassessment order made under Section 34(2) was served on the assessee. After referring to the above decisions, the Hon’ble Supreme Court observed that if an authority is authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period of limitation prescribed therefor. The order or decision of such authority comes into force or becomes operative or becomes an effective order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made. It was further held that if it is a limitation for a competent authority to make an order the date of exercise of that power and in the case of exercise of suo motu power over the subordinate authorities’ orders, the date on which such power was exercised by making an order are the relevant dates for determining the limitation,
5. If we apply the above ratio, we have to hold that a literal meaning has to be given to the provisions under Sub-section (3) and that the relevant date is the date on which the order was made which in the present case is 22-12-1998 which is within one year from the date of the order of the adjudicating authority.
6. The learned Counsel appearing on behalf of the assessee contended that since there is a delay of three months in issuing the order it has to be taken that the order was made only when it was issued. In support of the above contention, he sought to rely on a decision of the Hon’ble Supreme Court in State of Andhra Pradesh v. M. Ramakishtaiah & Co. – 1994 (93) STC 406 and a decision of the Andhra Pradesh High Court in Ushodaya Enterprises Limited v. Commissioner of Commercial Taxes, Hyderabad – 1998 (111) STC 711. On going through the above mentioned decisions we find that the facts were entirely different. In State of Andhra Pradesh v. M. Ramakishtaiah & Co. there was an allegation that the order was in fact made after the expiry of the period of limitation but was anti-dated. There is a delay of more than ten months in serving the order on the assessee. Since there was no explanation coming from the Deputy Commissioner why it was so delayed, the Apex Court was inclined to presume that the order was not made on the date it purports to have been made. In Ushodaya Enterprises Limited also similar dispute was raised. Since there was no explanation for the inordinate delay in serving the revisional order, Court took the view that the order was not passed on the date on which it was purportedly passed. In the present case before us at no stage the assessee had a contention that the review order was not as a matter of fact passed on 29-12-1998 or that the order was pre-dated. It is their definite contention that it is not the date on which the order was passed that is relevant but it is the date of its receipt by the Commissioner that is relevant for the purpose of computing the period of limitation.
7. In the light of the above discussion, we are inclined to agree with the view taken in GTC Industries in preference to the view taken by the West Zonal Bench in Commissioner of Customs, Mumbai v. Fujitus India Telecom Ltd. It is relevant to note that special leave petitions filed by the assessee against the decision of the Tribunal in GTC Industries were dismissed by the Hon’ble Supreme Court.
8. We, therefore, answer the reference in favour of the Revenue and against the assessee. The appeals will be heard by the Regular Bench on merits.