ORDER
S.K. Bhatnagar, Member (T)
1. This is a Reference Application under Section 35G(1) of the Central Excises and Salt Act, 1944 filed by the applicants in respect of Order No. 34(A)-CAL/1985-87-34(C) dated 28-5-1986 passed by the Tribunal in Calcutta on Stay Petition No. 45/85-Cal (relating to Appeal No. E/72/85-Cal).
2. It is the applicants’ contention that the following questions of law arise out of the order of the Appellate Tribunal :
(1) Whether in the facts and circumstances of the applicants’ case the Hon’ble Tribunal was correct in law in holding that the term “undue hardship” occurring in proviso to Section 35F of the Central Excises and Salt Act, 1944 would mean only financial hardship or immediate pecuniary hardship? Will liquidity of the firm be the only factor in determining the undue hardship?
(2) Whether in the facts and circumstances of the applicants’ case the Hon’ble Tribunal was correct in law in holding that existence of a prima facie case or the balance of convenience are not the factors to be taken into consideration for dispensing with the deposit in terms of proviso to Section 35F of the Central Excises and Salt Act, 1944?
(3) Whether in the facts and circumstances of the applicants’ case the minority view of the Hon’ble Tribunal holding that the “term -‘undue hardship’ – occurring in proviso to Section 35F of the Central Excises and Salt Act, 1944, should be construed to mean and include all the facts and circumstances which cause hardship” was the correct view in law?
(4) Whether in the facts and circumstances of the applicants’ case the minority view of the Hon’ble Tribunal was correct view in law in holding that prima facie case has also to be considered while deciding the application for dispensing with the condition of the pre-deposit under the proviso to Section 35F of the Central Excises and Salt Act, 1944?
3. During the hearing, the Counsel, Shri S.P. Kampani stated that the points of law raised by the applicants in the Reference Application, have already been settled by virtue of the decision of the Hon’ble High Court of Delhi in the case of Uptron Powertronics v. Collector of Central Excise, Meerut (1984-28-ELT-61) and by virtue of an order of the Tribunal in the case of 3ayashree Insulaters v. Collector of Central Excise passed by the Special Bench, Delhi [1987 (28)-ELT-279-Trib.]. Furthermore, in the Stay Order passed by this Bench on 15-9-1985 in their own case their point of view that the term – undue hardship – should be construed to mean and include all the facts and circumstances which cause hardship, has been accepted.
4. In view of the above position, it is apparent that the Tribunal had committed an error in passing the order in Stay Application No. 45/85-Cal. and therefore, they would now pray that in terms of Section 35C(2) of the Central Excises and Salt Act, 1944, the Tribunal may amend its own order and rectify the mistake.
5. The Bench observed that we were at present hearing the Reference Application filed in terms of Section 35G(1) and not an application for rectification of mistakes which was required to be filed under” Section 35C(2).
6. The learned Counsel thereupon stated that if their prayer for rectification of mistakes is not accepted, then the Reference Application may be considered on merits taking into account the cases cited by them.
7. He would, however, like to emphasise that the Tribunal has inherent powers to review its own acts and in this connection, he would like to draw attention to the case of I.T.O., Lucknow v. S.B. Singar & Sons and Anr. [75-ITO-646 (All.)] wherein it was held that “even when express power to review its orders is not conferred by a statute, a court or a Tribunal has inherent jurisdiction to rectify a wrong committed by itself when that wrong causes prejudice to a party for which that party is not responsible”.
8. He would also like to draw attention to the case of Commissioner of Wealth Tax, U.P. v. Rani Krishna Devi (84-ITR-page-94) wherein it was held that the Tribunals had power to review their interim orders and the Tribunals had jurisdiction to recall their orders.
9. The Hon’ble Supreme Court has also held in the case of Income Tax Officer, Cannanore v. M.K. Mohd. Kunhi (71-ITR-815-SC) that Income Tax Appellate Tribunal has inherent powers and ratio of this case would apply to CEGAT also.
10. They would like to draw attention to the case of R. Nagarajan & Company v. State of Kerala [34-STC-Vol. 65 (Kerala)], wherein it was held that if it is shown that a mistake or error was committed by the Appellate Tribunal, it is open to the Tribunal to correct the mistake.
11. In the instant case, the fact that a law point was involved, is apparent from the fact that it involves a question of correct interpretation of Section 35F and it has been held in the case of G. Venkataswami Naidu & Co. v. Commissioner of Income Tax [35-ITR-594 (SC)] that “if a point raised on reference relates to the construction of a document of title or to the interpretation of the relevant provisions of the statute, it is a pure question of law.” The same view was taken in the case of Commissioner of Income Tax, U.P. v. A. Tellery and Sons Pvt. Ltd. [63-ITR-288 (SC)]. Again in the case of Commercial Taxes Officer, Anti-Evasion, Jaipur v. Spencer and Co. Ltd. [62-STC-210 (Raj.)], it has been laid down as to what is a question of law arising out of the order. In the instant case, the issue of correct construction of the statute had been raised before the Tribunal and the Tribunal had also considered the same and recorded its findings. Therefore, a Reference Application lies in the instant case.
12. A question arose at this stage whether a Reference Application lies against an interim order? The learned Counsel stated that an interim order is also an order under Section 35C. It was his contention that in the instant case an order was passed with reference to Section 35F and therefore, it could also be treated as an order covered by Section 35C. In this connection, they would like to rely on the judgment in the case of S.S. Khanna v. F.J. Dhillon [AIR-1964 (SCM97-SC)] in which it was held that the expression – “case” – includes “part of the case”.
13. In view of the above position, they would like to submit that a Reference Application could be filed in terms of Section 35G(1), even in respect of an interlocutory order and the R.A. was maintainable.
14. They have raised points of law arising out of a Stay Order and therefore, strictly speaking, the matter could be referred to the Hon’ble High Court. However, as the issue involved has already been decided by the Delhi High Court as well as a larger Bench of this Tribunal and also adopted by this very Bench, all that was required under the circumstances was that the Stay Order in question, may be rectified or recalled and an appropriate order may be passed keeping in view the ratio of the judgments and orders cited by them.
15. Shri M.C. Thakur, the learned S.D.R., stated that rectification or recall of the Stay Order was a different matter. The application under consideration is a Reference Application and not a Rectification Application. A Reference Application is required to be filed in terms of Section 35G. This section refers to order passed under Section 35C and the order under Section 35C is a final order and therefore, only such an order was subject to reference to High Court in terms of Section 35G.
16. In other words, the Tribunal has to first pass a final order before request for reference could be made in terms of aforesaid section. Furthermore, in the case of interlocutory orders the rights of the parties are not affected and therefore, no reference is called for.
17. In was his contention that in these circumstances, the Reference Application was not maintainable.
18. It was also his contention that oral prayer for rectification or recall is also not acceptable and if the applicants wanted to make a prayer in this regard, it was open to them to file a written application in terms of Section 35C(2).
19. It was also his contention that the instant case was not a fit case for exercise of inherent powers as the said order had been passed after taking into consideration the applicants’ financial conditions and the balance of convenience.
20. Shri Kampani reiterated his request and emphasised that an oral prayer for rectification or recall can also be accepted.
21. We consider that the learned S.D.R.’s pleadings have a strong force.
22. The applicants have filed a Reference Application (and not a rectification application), in respect of the Stay Order in question. A Stay Order or an order under Section 35F is an Ad Interim Order passed in exercise of inherent powers and the powers vested in terms of Section 35F, respectively. It was not an order under Section 35C. An order passed by the Tribunal under Section 35C is a final order and as rightly pointed out by the Learned S.D.R., Section 35G required the Appellate Tribunal to refer to the High Court questions of law arising out of only such an order.
23. The contention of the learned Counsel that the Interim Orders are ultimately orders under Section 35C is not acceptable and the case of Major S.S. Khanna v. Brig. FJ. Dhillon (AIR-1964-SC-W) is distinguishable inasmuch as in the said case, it was held by the Hon’ble Supreme Court that a decision having a direct bearing on the rights of F.3. Dhillon to a decree for recovery of the loans was involved. It is in this context, that the Hon’ble Supreme Court had held that the expression ‘Case’ includes ‘a part of the case’ and the order of the Subordinate 3udge must be considered as a case which has been decided.
24. In the case before this Bench the Ad Interim Order passed in question does not determine the rights of the parties and has no direct bearing on the same. Therefore, the situation is different.
25. Furthermore, once there are specific provisions in this Central Excise Act itself and pre-deposit is required to be made unless waived in terms of Section 35F on one hand and on the other, reference application can be entertained only in terms of Section 35G, we have to take these express provisions of law into account and decide accordingly,
26. Even otherwise, no reference lies in cases where it can be shown that the point of law involved has already been settled, and the applicants have themselves stated that the points of law in question have already been settled by the Court judgment and the Tribunal orders cited by, them and this is indeed so.
27. Further, insofar as the question of rectification of error is concerned, we consider that rectification or recall of an order is a different matter and as rightly pointed out by the learned S.D.R., an application is required to be filed in this connection in terms of Section 35C(2). Although, in certain situations, the Tribunal may in its discretion entertain oral prayer if it so deems fit in exercise of its inherent powers, we consider that the present case is not one which calls for exercise of such inherent powers and it was open to the applicants to move a written application in terms of Section 35G(2) if they so choose.
28. With these observations the application is dismissed.