Central Board of Excise and Customs vs Ashok Leyland, Madras

Ramanujam, J.—This appeal is directed against the order of Mohan, J in W.P. No. 7472 of 1975 quashing the order, dated 25-7-1975

passed by the Central Board of Excise and Customs, New Delhi, rejecting a revision petition filed by the respondent u/s 130 of the Customs Act,

1962, and remitting the matter to the Central Board of Excise and Customs for deciding the case on merits.

The facts which led to the filing of the said writ petition are as follows - There was an order passed by the Deputy Collector of Customs,

Madras (4th appellant herein) on 21-12-1972, u/s 14(1)(a) of the Customs Act. Against that order, the respondent filed an appeal to the

Appellate Collector (second appellant). That appeal was, however, rejected as barred by limitation on 24-4-1974. Thereafter, the respondent

filed a revision petition, calling it a review petition, to the Central Board of Excise and Customs (the 1st appellant). The first appellant rejected the

same on 25-7-1975 on the ground that since the original order had merged with the appellate order, the revision could not be entertained. A

against the said order, the respondent filed the writ petition. The learned Single Judge, who heard the writ petition, felt that the first appellant was

not justified in refusing to exercise power of revision on the facts and circumstances of this case as the revisional powers had been invoked within

two years from the date of the original order and therefore, it should have passed an order on merits in the revision filed by the respondent. It is in

that view, he set aside the order passed by the first appellant refusing to entertain the revision and remitted the matter to the first appellant for

consideration of the revision on merits. The view taken by the learned Single Judge has been questioned in this appeal.

According to Mr. Narasimhan, Central Government Standing Counsel, the order of the original authority, viz., the Deputy Collector of Customs,

has merged with the order of the appellate authority and as such, the respondent cannot file a revision against the order of the original authority to

the Central Board of Excise and Customs. Alternatively, it is contended by him that even assuming that the theory of merger is not applicable to

this case, since the original order has been the subject matter of an appeal before the appellate authority, the order of the original authority cannot

be revised by the revisional authority, the Central Board of Excise and Customs, under S. 130 of the Customs Act. According to the learned

counsel, since Section 108 excludes an order passed in appeal u/s 128 from the purview of Section 130, the Board cannot exercise its powers of

revision in this case, as the appellate authority has passed an order in the appeal filed u/s 128. The question is whether the two contentions

advanced by the learned counsel for the appellants could be accepted as tenable.

So far as the first question as regards the application of doctrine of merger is concerned, it is seen that, in this case, the respondent has no doubt

filed an appeal against the order passed by the original authority to the appellate authority. But the appellate authority did not entertain the appeal,

but rejected the same on the ground that it had been filed out of time. Thus, there is no effective appeal before the appellate authority against the

order of the original authority. It is only when the appellate authority entertains the appeal and deals with it on merits, the order of the original

authority should be taken to have merged in the order of the appellate authority, and only in such cases, the party cannot file a revision against the

order of the original authority ignoring the order passed by the appellate authority. But, in this case, there has practically been no effective appeal

before the appellate authority and the order passed by the appellate authority is merely a rejection of the appeal on the ground that it is time

barred. Thus, on the circumstances of this case, we are inclined to hold that the principle of merger cannot come into play. Even assuming that the

principle of merger can be applied, then the revision petition filed by the respondent against the order of the original authority should be taken to be

an appeal against the order of the appellate authority, for the order of the original authority should be taken to have merged with the order of the

appellate authority, in which case the revision is entertainable.

Coming to the second question as to whether the revisional authority, acting u/s 130 of the Customs Act, could entertain a revision filed by an

appellant, we are of the view that the revision is entertainable by the Board u/s 130. According to Mr. Narasimhan, learned Central Government

Standing Counsel, the expression ""not being an order passed in appeal u/s 128"", occurring in Section 130, will exclude all orders passed in appeal

u/s 128 and as, in this case, an order has been passed by the appellate authority u/s 128, no revision should be entertained by the Board under that

section directly against the order of the original authority. For the purpose of appreciating the said contention, we have to consider the scope and

ambit of S. 130(1) of the Customs Act, which is as follows -

Section 130(1) : Any person aggrieved by any decision or order passed under this Act may, within three months from the date of the

communication to him of such decision or order -

(a) where the decision or order has been passed by a Collector of Customs, appeal to the Board;

(b) where the decision or order has been passed by an officer of the Customs lower in rank than a Collector of Customs, appeal to the Appellate

Collector of Customs :

Provided that, the Appellate Authority may, if it is satisfied that the appellant has been prevented by sufficient cause from presenting the appeal

within the aforesaid period of three months, allow it to be presented within a further period of three months...

This section enables the Central Board of Excise and Customer, to exercise revisional powers either suo motu or on the application of an

aggrieved person, in respect of any order passed by an officer of the Customs. Therefore, the order passed by the Deputy Collector of Customs,

as in this case, is a proceeding which could be revised by the Board u/s 130, but for the exclusion contained therein in respect of orders passed in

appeal u/s 128. But for such exclusion, the Board could entertain a revision petition against the order passed by the Deputy Collector u/s 14(1)(a)

and deal with the same on merits. Therefore, we have to consider whether the order which is made the subject matter of revision before the Board,

is an order passed in appeal u/s 128. It is, no doubt, true an appeal was filed u/s 128 to the appellate authority against the order of the original

authority, viz, the Deputy Collector. But that appeal was not entertained, but was rejected as out of time. The question is whether such an order

will come within the expression of ""an order passed in appeal u/s 128"". An order could be taken to have been passed in appeal u/s 128, only if the

appellate authority has passed an order either confirming, modifying or annulling the decision or order appealed against. An order dismissing appeal

as out of time cannot be said to be an order passed u/s 128. No doubt, even an order rejecting an appeal may be construed as an order passed

u/s 128, for the appellate authority has no other power except the power conferred u/s 128; when it rejects the appeal as time barred; but that will

not be an order in appeal filed u/s 128, for an order in appeal can only mean an appellate order on merits. Since the appellate authority has

rejected the appeal as time barred, it should be taken that there has been no effective appeal and as such, there is no order in appeal as

contemplated by the expression ''order passed in appeal u/s 128'' occurring in Section 130.

In more or less similar circumstances, this court in A. Vs. SREENIVASALU NAIDU v. COMMISSIONER OF Income Tax MADRAS.,

dealing with the scope of Section 33A of the Income Tax ACT, held that the expression ''made the subject of an appeal'' occurring in that section

should be understood as the subject matter of an effective appeal, and that if an appeal to the Appellate Tribunal is not admitted or is disposed of

on the ground that it is filed after the prescribed time, the order cannot be said to be the subject of an appeal as, Section 33A of the Income Tax

Act excluded, from the purview of revisional powers, orders which have been made the subject of an appeal before the Appellate Tribunal. There

also, an appeal was filed before the Tribunal, but that was rejected as out of time. The question was whether a revision could be filed u/s 33A of

the Income Tax Act, against the order of the Appellate Assistant Commissioner which has been made the subject of an effective appeal before the

Tribunal. The said decision squarely applied to the facts of this case. The principle of the said decision was applied by this Court in Erode Yarn

Stores Vs. The State of Madras, . In that case, the scope of Section 34(2)(b) of the Tamil Nadu General Sales Tax Act, 1959 was considered.

That decision also contained an exclusion in respect of orders which have been made the subject of an appeal. There also, it was held that where a

petition to condone the delay in filing an appeal is rejected by the Tribunal and the appeal is also rejected in limine, it cannot be said that the order

has been made the subject of an appeal to the Appellate Tribunal, within the meaning of Section 34(2)(b) of the Act.

A Full Bench of this court again, in Arunachalam Pillai and Sons v. State of Tamil Nadu - 45 STC 109 FB, had to consider the scope of suo

motu powers of revision contained in Section 32 of the Tamil Nadu General Sales Tax Act, 1959. Sect. 32 conferred on the Deputy

Commissioner a power of revision in respect of orders passed by any subordinate authority, except in respect of orders which have been made the

subject of an appeal before the Sales Tax Appellate Tribunal. In that case, there was an appeal to the Appellate Tribunal which was rejected on

the ground of limitation. The question was whether the affected party could file a revision against the original order notwithstanding the filing of an

appeal before the Sales Tax Appellate Tribunal which stood rejected. The Full Bench, while considering the scope of Section 32, held that an

appeal contemplated u/s 32(2)(b) must be an effective appeal and not one which was rejected or refused to be entertained on the ground of

limitation and that where an appeal before the Appellate Assistant Commissioner or the Tribunal against an assessment order was dismissed on the

ground of limitation, it cannot be said that the order of assessment had been the subject of an appeal to the Appellate Assistant Commissioner or

the Tribunal within the meaning of the said section and therefore, the Deputy Commissioner would have jurisdiction u/s 32 to entertain a revision

against the assessment order. This Full Bench decision squarely applies to the facts of this case.

We are, therefore, of the view that, in this case, since there was no effective appeal before the appellate authority u/s 128, there is no bar for the

application of Section 130. Therefore, on the facts and circumstances of this case, the Board should have entertained the revision petition filed by

the respondent. In this view, we are not in a position to interfere with the order of the learned single Judge directing the first appellant to entertain

the revision petition and deal with the same on merits. The writ appeal is, therefore, dismissed. There will be no order as to costs. Since the time

fixed by the learned Judge for the disposal of the revision petition had already expired, we grant three months time from the date of receipt of this

judgment for disposal of the revision petition by the first appellant.