ORDER
C. Satapathy, Member(Technical)
1. The common issue raised in these appeals is whether Commissioner (Appeals) continues to have powers to remand cases to the original adjudicating authority after legislative changes made in the customs and excise laws by the Finance Act, 2001. It is not disputed that initially laws did not provide for specific power of remand to the appellate authority, a specific provision providing such a power was whitch into the law in 1982, which has since been deleted in 2001. It is also not in dispute that the present legal text after the 2001 amendment is similar to the pre 1982 text. This has been acknowledged by the Larger Bench of the Tribunal in CCE, Bhubaneshwar Vs. Oripol Industries & Ors.- 2003-TAXINDIAONLINE-09-CESTAT-DEL by noting in para 8 as follows:-
“It is true that wording of the present section after the amendment under the Finance Bill 2001 is more or less similar to pre 1982 position”.
It is also true that the Parliament has stopped half way bringing the legal position back to the pre 1982 stage and has not proceeded further to specifically amend the law to say that the Commissioner (Appeals) shall not exercise the power of remand.
2. The pre 1982 legal text was specifically by the Division Bench of the Honourable High Court of Andhra Pradesh and the Honourable Supreme Court in the following cases:-
1) Timmasamudram Tobacco Co. Vs. ACCE, AIR 1961 (Andhra Pradesh) 324
2) UOI Vs. Umesh Dhaimode -1998 (98) ELT 584 (SC) After noting that the law does not have specific provision enabling the appellate authority to remit the matter to the original authority in Timmasamugram cited supra, the Honourable Andhra Pradesh High Court has ruled, “We do not think that the absence of such provision disables the appellate authority from sending the matter back to the officer that passed the order.” The Honourable High Court also ruled that without such power it is difficult for the appellate authority to dispose of an appeal satisfactorily as he has to either allow or dismiss the appeal without directing any fresh inquiry even where a prescribed procedure has been violated by an officer. The Honourable High Court also opined that this cannot be regarded as a satisfactory state of affairs.
3. The Apex Court, after noting in Umesh Dhaimode cited supra that the law vests the appellate authority with power “to pass such order as it deemed fil confirming, modifing or annulling the decision appealed against” has ruled that, “An order of remand necessarily annuls the decision which is under appeal before the appellate authority. The appellate authority is also invested with the power to pass such order as it decmed fit. Both thses portions of the aforesald provision, read together, necessarily imply that the appellate authority has the power to set aside the decision which is under appeal before it and to remand the matter to the authority below for fresh decision.
4. After the 2001 amendment, the law new vests the appellate authority with powers to “pass such order as he thinks just and proper, confiming, medifying or annulling the decision or order appealed against”. with such striking similarity between the pre 1982 provision which was examined by the Apex Court, on the one hand and the post 2001 provision on the other, what better guidance can one look for to decide the issue at hand than to respectfully follow the Apex Court decision in the matter? The learned J.D.R., however, points out that the Larger Bench of the Tribunal has ruled in the case of Oripol Industries (supra) that Commissioner (Appeals) does not have the power of remand under the post 2001 provision. With great respect to the Larger Bench, I am unable to follow its decision which is contrary to the decision of the Apex Court cited supra (as also contrary to the decision of the Division Bench of the Honourable High Court of Andhra Pradesh cited supra). In my opinion, the Apex Court’s decision has been rendered in respect of a strikingly similar provision of law and is, therefore, binding on all subordinate authorities including this Bench as discussed below.
5. In Oripol Industries cited supra, the Larger Bench has cited two sentences from para 16 of the Apex Court’s decision rendered in the case of Shashikant Laxman Kale V/s U.O.I. – AIR 1990 SC 2114 to support its finding that it is permissible to look into the Notes on Clauses to ascertain the intention of the amendment and that the Notes on Clauses would clearly show that the intention was to take away the power of remand the appellate authority. To understand the true import of the Apex Court’s ruling in Shashikant (supra), one has to necessarily read paragraphs 14, 15, 16, 17 and 18 of the decision (and not just two sentences from paragraph 16 forming the head note), in which the Apex Court has extensively dealt with the clear distinction between:-
(i) the purpose or object of an enactment which relates to the mischief to which the enactment is directed and its remedy, and
(ii) the legislative intention which relates to the legal meaning of the enactment.
After quoting from Francis Bennion’s Statutory Interpretation, the Apex Court has furhther clarified that, “While the purpose or object of the legislation is to provide a remedy for the malady, the legislative intention relates to the meaning or exposition of the remedy as enacted.” In the said case, while seeking to discern the purpose or object of the mpugned enactment in order to examine the validity of the classification made therein between public and private sector employees, the Apex Court has ruled that “when determining the purpose or object of the legislation as distinguished from the meaing of the enacted provisior”, it is permissible to use larger material such as “the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law”; “the statement and objects and Reasons accompanying a Bill”; and “even matters of common knowledge; the history of the times; and every conceivable state of facts existing at the time of legislation which can be assumed”. In paragraph 17, the Apex Court has made it amply clear that for the purpose of construing the meaning of the enacted provision, it is not permissible to use these aids. It has further stated therein as follows:-
“The distinction between the purpose or object of the legislation and the legislative intention, indicated earlier, is significant in this exercise to emphasize the availability of larger material to the court for reliance when determining the purpose or object as distinguished from the meaning of the enacted provision.”
In the cited case, the Apex Court placed reliance on the Notes on Clause appended to the statement o Objects and Reasons only to discern the purpose or object of the legislation in order to examine the validity of the classification made therein and not for determining the meaning of the enacted provision. The Apex Court has infact pointed out the destinction between the two atleast 5 times in paragraphs 14, 15 and 17 of its decision cited supra and it is difficult to miss the same. Incidentally, it is a decision rendered by a Bench of three Judges of the Apex Court in the year 1990. In the instant case, there is no dispute in determining the purpose or object of the amendement. The issue relates to discerning thelegal meaning of the enacted provision.
6. In Oripol (supra), the Larger Bench of the Tribunal has also cited an earlier decision of the Apex Court (K.P. Verghese V/s ITO, Ernakulam – AIR 1981 SC 1922) rendered by a Bench of two Judges in 1981, which does refer to the speech made by the Finance Minister while moving the amendment introducting Section 52(2) of the Income Tax Act, 1961 as it throws considerable light on the objct and purpose ofth enactinent. However, while interpreting the said Section 52(2), the Apex Court takes into account several vital factors such as the need to avoid literal interpretation which produces manifestly absurd and njust result; income that never accrued or received canot be taxed; the use of the word ‘declared’ in the said Section 52(2); the placement of the provision under Section 52; the marginalnote to Section 52 and also the need to avoid a construction that takes the said Section 52(2) outside the legislative power of Parliament or renders it violative of fundamental right of an assessee. These factors are absent in the present case. On the contrary, interpretation of the post 2001 provision in a manner similar to the way the pre 1982 provision was interpreted by the Apex Court in Umesh Dhaimode (supra), does not produce any absurd or unjust result. It does not take the provision outside the legislative power of the Parliament nor does it render the provision violative of the fundamental rights.
7. Applying the ratio of K.P. Verghese and Shashikant cited supra as also the mischief rule (extracted from Heydon’s case referrd to in Verghese) to the extent these can be applied to the case athand, it is certainly possible to discern the purpose or object of the 2001 amendment. The earlier legislative history and the circumstances that prevailed at the time of 2001 amendment clearly show that the appellate authority enjoyed the power to remand on two counts : –
(i) Under the ore 1982 law itself, as interpreted by the Apex Court in Umesh Dhaimode cited supra, and
(ii) Also under the specific legal provision inserted in 1982.
The purpose or object of the 2001 amendment, as can be seen from the Notes on Clauses t the Finane Bill, 2001, ws to provide a ‘remedy’ to this exsting ‘malady’ in as much as it sought to “withdraw the powers of the Commissioner (Appeals) to remand matters back to the adjudicating authority for fresh consideration”. Howerver, the enacted legislation merely addressed (ii) above by delating the specific provision inserted in 1982. It did not address (i) above in as much as it left the amended text much the same way as it as prior to 1982 amendments. The inescapable conclusion is that the 2001 enactment did not provide the intended remedy and that there is no option but to interpret the resultant post 2001 text the same way the Apex Court had interpreted the pre 1982 text in Umesh Dhaimode cited supra. It would have been a different story if the law was expressly amended to say that the Commissoner (Appeal) shall not have any power of remand. In the absence of such an amendment, the Apex Court’s ruling cited supra cntinues to hold good.
8. Finally, it must be stated that ‘Notes on Clauses’ are distinct from the law enacted by the Parliament. They do provide a clue to ascertaining the object or purpose of the amendment. But they can not be of helf if the expressed object or purpose is not translated into an appropriate legal text while drafting the Bill. We are concerned here with the interpretation of the words used in the legal text which remain after theamendment andnot of the words hat have been deleted. Given the striking similarity between the pre 1982 text and the post 2001 text, it is perfectly legitimate o draw a paralel between the two and to interpret the words in the latter text in the clear and unambigous manner in which the Apex Court has interpreted the former text. As pointed out earlier, the Apex Court has interpreted the former text. As pointed out earlier, the Apex Acourt held that an order of remand annuls the decision under appeal. The appellate authority is also invested with the power to pass such as he thinks just and proper unde the amendded law. Hence reading both portions of the amended law together, as the Apex Court did in Umesh Dhaimode cited supra, one can not but conclude that the appellate authority has the power to set aside the order under appeal and to emand the matter for fresh decision.
9. In the light of the foregong, I am of the view that the Apex Court’s decision rendered in teh case of Umesh Dhaimode (Supra) is binding on this Bench and the same has to be preferred to the contrary decision of the three Member Bench of the Tribunal. Respectfully following the said decision of the Apex Court, I old that the Commissioner (Appeals) continues to have the power of remand under the post 2001 provisions. Consequently, I dismiss these appeals alongwith the stay applications filed by the Department.
10. Before parting with these appeals, it is necessary to point out that the decision of the Division Bench of the Honourable High Court of Andhra Pradesh cited Supra contains an implicit suggestion for the law makers that doing away with the power of remand may result in an unsatisfactory state of affairs. Public revenue and public interest will also be in great jeopardy if, for example, in the absence of the power of remand, a Commissioner (Appeals) merely sets aside an order confirming a duty demand eithe because the original autority has not followed the principiles of natural justice or has made a wrong computation which is not possible to rectify at the appellate stage.