By TIOL News Service

CHENNAI, AUG 18, 2015: NETIZENS may recall the Interim order reported in 2015-TIOL-1659-HC-MAD-CUS wherein the High Court prima facie held that there was no need for the Tribunal to refer the matter to the Larger Bench on the issue of classification of imported coal. The High Court has now finally decided the issue and dismissed the appeals by revenue and directed the Tribunal to constitute Larger Bench and decide the issue within two months.

Interestingly, the High Court held that the order of Tribunal referring the matter to the Larger Bench in not an appealable order under Section 130 of the Customs Act, 1962. The High Court held:

The scheme of the Act makes it clear that the provisions for a first appeal to the Commissioner (Appeals) and a further appeal to the Appellate Tribunal are intended for the benefit of persons aggrieved. After the dismissal of the appeal by the Tribunal, there are two alternatives open to an aggrieved person. One is under Section 130 where an appeal is maintainable to the High Court and another is under Section 130-E where an appeal would lie to the Supreme Court.

It is clear that unless a person is aggrieved by an order of the Tribunal, an appeal cannot be maintained. A reference made by one Bench of a Tribunal to a Larger Bench, on the ground that two Benches of coordinate jurisdiction had come to different conclusions on the same issue, is not a decision, on which one or the other party can be stated to be aggrieved.

The question as to whether there was a conflict or not and the question as to whether the situation warranted a reference or not, are questions that could be answered very well by the Larger Bench. When the issue is still left open for the Larger Bench to come to a conclusion as to whether there is a conflict of opinion and whether it warranted a reference, it is not open to this Court, in an appeal under Section 130(1), to pre-empt a decision on those issues. The right of appeal under Section 130(1) is restricted only on a substantial question of law. The question as to whether one Bench of the Tribunal was right in making a reference of certain issues to a Larger Bench cannot even be considered as a substantial question of law.

However, with regard to waiver of pre-deposit granted in the impugned order of the Tribunal, the High Court held:

In these appeals, the Tribunal has proceeded to follow its own precedents, where, whenever a reference is made to a Larger Bench, they have granted a total waiver. The exercise of discretion by the Tribunal need not be interfered with. The second question of law is answered in favour of the assessees.

The High Court further held "As a matter of fact, the order of the Tribunal under appeal is dated 18.11.2014. Had not these appeals been filed, the reference itself would have been answered one way or the other and a decision in favour of either of the parties could have been arrived at. The Tribunal is directed to constitute a Larger Bench at the earliest and dispose of the appeals within a period of two months from the date of receipt of a copy of this order".

(See 2015-TIOL-1874-HC-MAD-CUS)