1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO. 32 OF 2009 Ms. Usha B. Agarwal, carrying on business in the name and style of M/s. Pankaj Steel Corporation, as proprietor thereof, having his office at 32-B, Potia Industrial Estate, Kolsa Bunder, Darukhana, Mumbai 400 010 ... Appellant Versus The Commissioner of Central Excise, Mumbai – VII, CGO Complex, C.B.D. Belapur, Navi Mumbai 400 614 ... Respondent Mr. Prakash Shah with Mr. Jas Sanghavi i/by PDS Legal for the Appellant. Mr. P.S. Jetly for the Respondent. CORAM : FERDINO I. REBELLO & J.H. BHATIA, JJ. DATED : 16TH JUNE, 2009 Oral Judgment (Per Ferdino I. Rebello,J.): Admit on the following question : “Whether the Appellant Tribunal was right in holding that the appellant was not an aggrieved person and consequently had no locus standi to file the appeal against the order impugned before it?” 2. A few facts may be set out : 2 At the public auction held by MSTC Ltd. On behalf of Oil and Natural Gas Corporation Ltd, Mumbai for the sale of various materials listed in the schedule to the auction notice and belonging to ONGC, the appellant participated in the public action and was declared the successful purchaser. The material purchased by the appellant was at Sr. No. 9 of the schedule to the auction notice which contained a clause as under : “Iron and Steel Scrap arising out of 7 Nos. of Temporary Decks and 4 Nos. of Helidecks (cutting permission is allowed to facilitate easy loading.” The Petitioner bid in the price of Rs.59,92,480/-. In the excise duty column appearing in the delivery order, it was indicated as “--” meaning no duty was payable. The Appellant took delivery of the goods. O.N.G.C. The purchased goods were the temporary decks and helidecks from Mazgaon Docks Ltd. and Hindustan Shipyard Limited. Classification declaration had been filed classifying the decks under heading 89.05 attracting Nil rate of duty. The department however, classified the decks under the heading 84.31 of the Tariff and demanded differential duty from these two units. The issue of correct classification of these decks is pending with the CESTAT. After the sale of the scrap to the Appellant, ONGC vide letter amended the release order incorporating clauses relating to payment of excise duty on the scrap sold by them. There was an exchange of correspondence between the appellant O.N.G.C., in the matter of demand raised by excise department. On 3 11.2.2000 the appellant executed a bank guarantee for Rs. 8 lacs. in favour of O.N.G.C., in which there was a condition that if the excise department demands duty within one year, then O.N.G.C., was entitled to invoke the bank guarantee. The bank guarantee was renewed from time to time. 3. While the appellant was in the process of taking delivery of the material from O.N.G.C., summons was issued to the appellant in connection with some of the material sold by the O.N.G.C. On 30.3.2000 pursuant to summons dated 28.2.2000 the appellant requested the Additional Commissioner to release the material to enable them to take delivery of the goods. They also contended that no duty is payable, the appellant being S.S.I. Unit. A show cause notice was issued on O.N..G.C. On 23.5.2000. According to the department the decks sold were classifiable under Heading 89.08 of the Central Excise Tariff attracting duty @ 16% adv. After due adjudication process, the Additional Commissioner passed order confirming the duty on O.N.G.C., and also imposing penalty on them. O.N.G.C. filed an appeal before the Commissioner (Appeals). The appeal was rejected. On the appeal being rejected O.N.G.C., encashed the bank guarantee furnished by the appellant on the appellant becoming aware of the O.N.G.C. not challenging the order passed by the Commissioner (Appeals) filed an appeal along with the stay application before CEGAT. On 25.2.2004 the appeal was dismissed on the ground that the appellant had no locus standi to file an appeal before the tribunal. The appellant being aggrieved preferred writ Petition No. 563 of 2005 before this court. The Petition came to be disposed of by order dated 15.4.2005 and the matter was remanded with directions as set out therein. On 24.7.2007 the appellant filed Misc. Application before the Appellate Tribunal seeking leave of the appellate tribunal to 4 file an appeal., By an order dated 6.11.2007 the appellant tribunal was pleased to dismiss the appeal on the ground that the appellant herein not being “person aggrieved” had no locus standi to file an appeal. The present appeal is against that order. 4. At the hearing of this appeal on behalf of the appellant, their learned counsel submits that considering the language used in section 35(b) of the Central Excise Act, the appeal filed by the appellant was maintainable. On the other hand on behalf of the respondent revenue, it is submitted that no fault could be found with the order passed by the tribunal and consequently the appeal as filed ought tobe dismissed. 5. We have heard the learned counsel for the parties and have also considered the judgments which have been relied upon in support of their respective submissions. We may firstly reproduce the relevant portion of the order of this court remanding the matter back to CEGAT. The relevant portion of the order reads as under : “By consent of parties, the impugned order dated 215th February, 2004 rejecting appeal of the Petitioner for the reasons stated herein is set aside since the order was passed by the Tribunal without considering the issue of grant of leave to file appeal. In pursuance of the law laid down by the Apex Court in the case of Smt. Jatankanwar Vs. Golcha 5 Properties AIR 1971 SC 374, it was obligatory on the part of the petitioner to seek leave of the Court or Tribunal demonstrating prejudice suffered by it. Upon such demonstration, it is for the Tribunal to consider the prayer to grant or refuse to grant leave. Once leave is granted, the merits of the challenge can be done into in the appeal. Since this procedure or formalities have not been complied with by the Tribunal, we remit this matter back to the Tribunal with liberty to the petitioner to move to seek appropriate leave from the Tribunal in the same appeal. In the event of such application being made, the Tribunal shall consider the same on its own merits without being influenced by the reasons recorded in the impugned order.” (emphasis supplied) It thus is clear that this court placing reliance in the case of Golcha Properties (supra) held that it was obligatory on the part of the Petitioner to seek leave of the tribunal demonstrating prejudice suffered by it if leave was not granted to file the appeal. This court also observed that it is for the tribunal to consider the prayer of grant or refuse to grant relief. In other words, the right of the appellant to move an application to seek leave to file appeal was accepted. In other words, appellant’s locus standi was accepted. The appellant only had to satisfy the Tribunal about the prejudice that would be occasioned if leave was not granted to file the appeal. 6. We have perused the impugned order of the tribunal. The tribunal by the impugned order totally misdirected itself in law in re-examining the issue as 6 to whether the appellant had locus standi to prefer an appeal. That matter had been concluded before the matter was remanded to the tribunal. If the appellant herein in terms of the order of remand on applying for leave to file appeal had to show the prejudice that the appellant would suffer it was within the jurisdiction of the tribunal to grant leave, consequent upon which the appeal could be preferred. The appellate tribunal in our opinion completely lost sight of the order of remand in proceeding with the matter in the manner which it has done. We also find that the learned tribunal totally misread the judgment of the Supreme Court in Northern Plastics Ltd. Vs. Hindustan Photo Film Mfg. Co. Ltd. 1997 (91) E.L.T. 502 (S.C.) while holding that the Supreme Court has held that only parties to the proceeding before the adjudicating authority could prefer an appeal to the tribunal. The learned tribunal also misdirected itself in law in holding that under the provisions of Central Excise Act it is only the manufacturer who could maintain an appeal. On this count itself, the order is liable to be set aside and the matter remanded back to the tribunal. In our opinion, however, if we adopt the course of remanding the matter, it will only result in further delaying the proceedings and as all the material is on record, we are addressing ourselves to the question as to whether leave ought to be granted to file the appeal and in that context who can be said to be the person aggrieved under section 35(b) of the Central Excise Act. 7. For that purpose, we may gainfully refer to section 35(b) which reads as under : 7 “35B. Appeals to the Appellate Tribunal – (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order - (a) a decision or order passed by the Commissioner of Central Excise as an adjudicating authority; (b) an order passed by the Commissioner (Appeals) under section 35A; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) hereafter in this Chapter referred to as the Board) or the Appellate Commissioner of Central Excise under section 35, as it stood immediately before the appointed day; (d) an order passed by the Board or the Commissioner of Central Excise, either before or after the appointed day, under section 35A, as it stood immediately before that day;............................” The legislature thus has used the expression any person aggrieved and not the word “manufacturer”. If it was the intention of the legislature that the expression any person has to be read as only “manufacturer” then there was no reason for the legislature to use the expression “any person”. Once the legislature has used an expression which has received judicial interpretation then that interpretation will 8 have to be followed to find the object and the reason for using the expression “any person aggrieved”. The Supreme Court in Northern Plastics (supra) itself has noted that the phrase “person aggrieved” has wider meaning than the phrase “party aggrieved”. We may gainfully reproduce some dictionary meanings of the expression “aggrieved” and “person aggrieved”. 1. Collin’s English Dictionary : Aggrieved – To ensure unjustly especially by infringing a person’s legal rights. 2. Webster’s Comprehensive Dictionary, International Edition at page 28. Aggrieved person subject to ill treatment feeling an injury or injustice. 3. Stroud’s Judicial Dictionary, 5th Edn. Vol 1 Pages 83-84 Person aggrieved – Person injured or damaged in a legal sense. 4. Black Law’s Dictionary, 6th Edn;. Page 65. Aggrieved – Having suffered loss or injury dandified injured. Aggrieved person – One whose legal right is invaded by an act complained of or whose pecuniary interest is directly and adversely 9 affected by a decree or judgment. One whose right of property may be established or divested.” The Supreme Court has also held in a long line of judgments that an appeal is a creature of statute and that right to appeal has to be exercised by persons permitted by the statute to prefer appeals. It is not necessary for us to once again to refer judgments on the meaning of the expression “person aggrieved” considering the extensive discussion in Northern Plastics (supra). 8. The Supreme Court has also recognized the right of the party who is not party to the proceedings to prefer an appeal with the leave of the Court. In Smt. Jatan Kumar Golcha Vs. Golcha Properties (P) Ltd. 1970 (3) SCC 573 the Supreme Court observed thus : “It is well settled that a person who is not a party to the suit may prefer an appeal with the leave of the Appellate Court and such leave should be granted if he would be prejudicially affected by the judgment.” This has also been reiterated in Assistant G.M. Central Bank of India Vs. Commissioner of Municipal Corporation (1995) 4 SCC 696. 10 9. On behalf of the respondents, reliance was placed in the judgment in Northern Plastics (supra) as also in the judgment of Madras High Court in Lakshmi Vilas Bank Ltd. Versus Commissioner of Customs, 2007 (213) E.L.T. 166 (Mad). We find that Madras High Court has extensively referred to various judgments on the expression “any person aggrieved” and placed reliance on Northern Plastics Limited (supra). We may however reproduce the relevant portion in th judgment in Northern Plastics (supra) which will make it clear that even a party who was not party to the proceedings even under the provisions of Customs Act can be said to be person aggrieved and entitled to prefer an appeal. The following observations are relevant: “It is true that the phrase “person aggrieved” is wider than the phrase “party aggrieved”. But in the entire context of the statutory scheme especially sub section (3) of section 129A it has to be held that only the parties to the proceedings before the adjudicating authority Collector of Customs could prefer such an appeal to the CEGAT and the adjudicating authority under Section 122 can prefer such an appeal only when directed by the Board under section 129D (1) and not otherwise. It is easy to visualise than even a third party may get legitimately aggrieved by the order of the Collector of Customs being the adjudicating authority if it is contended by such a a third party that the goods 11 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 created 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. Under such circumstances such a third party might perhaps be treated to be legally aggrieved by the order of the Collector of Customs as an adjudicating authority and may legitimately prefer an appeal to the CEGAT as a “person aggrieved”. That is the reason why the Legislature in its wisdom has used the phrase any person aggrieved by the order of Colelcto4r of Customs as adjudicating authority in section 129A(1). But 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 level interest in the goods involved in the adjudication process. It cannot be a general public interest or interest of a business rival as is being projected by the contesting respondents before us.” 12 10. In the instant case as noted, the appellant had purchased goods on which earlier it was assumed that no excise duty was payable. Then a Bank guarantee was obtained from the appellant that in the event the excise duty was demanded then he will reimburse O.N.G.C. O.N.G.C. took up the matter in appeal upto the Commissioner (Appeals) and thereafter did not take any steps. It is the Petitioner who has to pay the excise duty. It is the Petitioner’s contention that classification as done by the Revenue is not correct and accordingly he is entitled to refund of duty paid. In our opinion, such person can be said to be person aggrieved as prejudice has been occasioned to him by O.N..G.C. in not preferring an appeal and the appellant having to pay the excise duty which in his opinion is not payable. Considering the scheme of Central Excise Act, the appellant would not have any other remedy as an application for refund would only be maintainable if the order of assessment is set aside and not otherwise. The appellant would therefore, be left with no remedy at law. The Appellant therefore, has demonstrated the prejudice that would be occasioned. It is in that context that this court rightly had directed the appellant to move an application to seek relief to prefer an appeal. The tribunal unfortunately misread the judgment of this court and proceeded to examine whether an appeal itself lies. It is true that the tribunal in its judgment has noted that conferring a right on the person other than manufacturer may create adverse impart on the ordinary claim of the revenue and fiscal administration. In our opinion, this can be met by holding that the person aggrieved who is allowed to prefer an appeal 13 would only be entitled to prefer appeal to the extent of the prejudice suffered by inaction of the original assessee through whom he claims the relief. This would rule out the possibility of matter going down the chain. 11. Considering the above, in our opinion, the impugned order of the tribunal is liable to set aside. The question of law as framed would have to be answered in the negative against the revenue and in favour of the assessee. (J.H. BHATIA,J.) (F.I. REBELLO,J.)