Holding

The President cannot constitute a bench with fewer members than the bench that passed the original order; rectification applications must be heard by the same bench or a bench of equal size.

Summary

ELPRO International Ltd., a manufacturer of X‑ray components, obtained a final order from a three‑member bench of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) which was later rectified by another three‑member bench. Subsequent applications for further rectification were heard by a two‑member bench constituted by the President of CEGAT. The appellant challenged the constitution of this bench, arguing that Rule 31‑A requires the same bench (or one of equal size) that passed the original order to hear rectification applications. The Tribunal majority held the two‑member bench was valid, while a dissenting member disagreed. The Supreme Court held that the President cannot form a bench with fewer members than the original bench, and that rectification applications must be heard by the same bench or a bench of equal size, setting aside the Tribunal’s order and allowing the appeal.

Issues considered

Whether the President of CEGAT may constitute a bench of fewer members than the bench that passed the original final order for hearing rectification applications under Rule 31‑A.
Whether a rectification order can be validly passed by a bench of fewer members than the bench that passed the original order.
Whether a rectification application can be filed to rectify an order that itself was passed on a prior rectification application (left open).

Legislation cited

Central Excise and Salt Act, 1944s. 350, s. 35-C, s. 35-D
Customs Act, 1962s. 129-C

Subjects

Rule 31-Arectification of mistakebench compositionCustoms Excise Gold Appellate Tribunaljudicial decorumappealtribunal procedureCentral Excise and Salt ActCustoms ActGold (Control) Act

Judgment

A M/S. ELPRO INTER>IATIONAL LTD.
v.
COLLECTOR OF CENTRAL EXCISE, PL:NE

MAY 2, 1996

B (B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.j

Customs, Excise and Gold (Co11tro/) Appellate Tribunal (Procedurej
Rules, 1982: Rule 31-A.

C Constitution of Bench to hear applications for rccttjication of nzis-
takes~Jurisdiction uf President-Scupe of-Held : President did not hai·e
jtuisdictiun to constitute bench consisting uf lesser 11un1ber of ,'\fcn1bers than
(niginal Bench 1vhich passed j/'Jull ordcl'--(jo/d (control) Act, J96R, S.OJ-
A(2}.

D Central Excises· and Sult Act, 1944: Sections 35-C und 35-D---Rectificu-
tion apjJ/ication to rectijj' order passed 011 rer.:tification applicution--J\fain-
tainability of-Question left u11en.

The appellant was engaged in the tnanufacture of cfnnponents and
parts of X-Ray machines. A special Bench of three members of the Central
E Customs, Excise and Gold (Control) Appellate Tribunal passed final order
remanding the matter to the Collector for examining \rhether the appellant
and another company (IGE) \\'as a related person .

..\n order of rectification was passed by a Bench comprising of three
F members directing the rectification of the final order. A direction was given
to recall the final order. The appellant lile further rectification applica-
tions \\'hich came up before a Bench of the Tribunal consisting of ffi'o
111embers. The appellant raised the plea that the said rectification applica-
tions could not be heard by a Bench con111rising of less than three J\lem-
bers since the final order in the appeal as also the earlier rectification
G order were 11assed by a Bench comprising of three J\'le1nbers. The Tribunal
by a maj°Ority repelled the said plea and held that the applications for
rectification of mistake in the facts and circumstances, could be heard by
a Bench of two Members as constituted by the President for the purpose.
Being aggrieved by the said order the ap1iellant preferred the present
H appeal.
246
ELPRO INTERNATIONAL LTD. v. COLLECTOR OF C.E. 247

A.llcnring the appeal, this Court A

HELD : I.I. It is evident from Rule 31-A of the Customs Excise and
Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 that the same
Bench which passed the final order, should hear the application for
rectification of nlistakes. Due to subsequent events, a situation may emerge B
\\'hen o~e or 1nore of the Members who pronounced the order may cease
to hold the ofiice as a Member of the Tribunal. In such a situation, it is
certainly open to the President to direct that the application may he heard
by a Bench consisting: of a .l'vlember/l\ lembers '''ho did not originally hear
1

the appeal and passed the order. The Members who constitute the
Tribunal for hearing the rectification proceedings, may be different. To C
this extent, the President can direct othernise. Normally, it will not enable
the President to constitute entirely a new and different Bench, even if one
or more of the Me1nbers who heard the appeal and rendered the order
originally, are available. In any view of the matter, Rule 31-A of the CEGAT
(Procedure) Rules, 1982 will not clothe the President with jurisdiction to D
constitute a Bench consisting of lesse.r number of Members, than the
original Bench which heard the appeal and rendered the final order. This
vie\v is in accord with judicial 4ecorum, discipline and fairness. Any other
interpretation will bring about a situation to clothe the President of the
Tribunal with arbitrary po\\'ers. Such an intention cannot be imputed in
framing Rule 31-A. [251-B-F] E

1.2. Moreover, the order passed under Rule 31-A will have the impact
of altering, amending or modifying the final order. A final order passed
by a Bench of three Members cannot be modified or altered or amended
by a Bench consisting of lesser Members. However, the question whether F
a rectification application \Vould lie to rectify an order passed on rectifica~
tion application is left open. [251-G, 252-C]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 8267-68
of 1s;0.
G
From the Jmlgment and Order dated 5.9.95 of the Central Customs,
Excise and Gold (Control) Appellate Tribunal, New Delhi-in Misc. Order
No. 04/95A and 205/95A.

R.F. Nariman and K.J. John for the Appellant. H
248 SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A N.K. Bajpai, V.K. Verma and S.D. Sharma for the Respondent.

The Order of the court was delivered by

PARIPOORNAN, J. Special leave granted.

B 2. The appellants arc applicants in Misc. Orders No. 04/95-A and
205/95-A before the Customs, Excise and Gold (Control) Appellate
Tribunal (hereinafter referred to as 'the CEGAT'), New Delhi Special
Bench 'A'. This appeal by special leave is filed against the majority decision
of the CEGAT dated 5.9.1995 in the said proceeding.' holding that the
c application for rectification of mistake, in the fact' and circumstances, can
be heard by a Bench consisting of two Members, as constituted by the
President for the purpose.

3. The appellant is engaged in the manufacture of components and
parts of X-Ray machines. A special Bench of three Members of the CEGAT
D passed final order Nos. 7 & 8/91-A dated December 18, 1990/January 8,
1991 remanding the matter to the Collector for examining whether the
appellant and another company (IGE) is a related person. The appeal filed
from the said order of CEGAT under Section 35L of the Act is pending
before this Court.
E 4. An order of rectification was passed by a Bench comprising of
three members directing the rectification of the final order, in ROM No.
E/ROM/14/91-A in E/1500/88-A. A direction was given to recall the final
order. The appellant filed further rectification applications being ROM
No. E/ROM/06/93-A and E/ROM/42/93-A. The above two applications
F came up before a Bench of the Tribunal consisting of two members. The
appellant raised the plea that the said rectification applications could not
be heard by a Bench comprising of less than three Members since the final
order in the appeal as also the earlier rectification order were passed by a
Bench comprising of three Members. The Tribunal by a Majority (2:1)
G repelled the said plea and held that the applications for rectification of
mistake in the facts and circnmstances, can be heard by a Bench of two
Members as constituted by the President for the purpose. The said order
is assailed in these appeals.

5. We heard counsel It is seen that the final order dated 8.1.1991 in
H the appeals was passed by a Bench consisting of three Members - Shri U.
ELPRO INTERNATIONAL LTD. v. COLLECTOROFC.E. [PARIPOORNAN,J.]249

Rao, Technical Member (since retired), Ms. S.V. Maruthi, Judicial Mem- A
ber (since elevated to Andhra Pradesh High Court) and Sri GA. Brahma .
Deva, Judicial Member. The Rectification Applications were heard and
orders passed on 2.11.1992 by a Bench consisting of Ms. S.V. Maruthi,
Judicial Member (since elevated to Andhra Pradesh High Court), Shri
GA. Brahma Deva, Judicial Member and Sri N.K. Bajpai, Technical
B
Member (since retired). It is thereafter, the appellants filed the present
applications which came up for final hearing. It is common ground that the
President, CEGAT constituted the. Bench comprising of Sri· K.S.
Venkataramani, Technical Member and Sri GA. Brahma Deva, Judicial
Member to hear the applications. When the plea of improper constitution
of the Bench was taken, Sri K.S. Venkataramani, Technical Member, took C
the view that the Bench as constituted by the President i' competent to
hear the applications. On the other hand, Shri Brahma Deva, Judicial
Member took the view that the applications should be heard by a Bench
consisting of three Members. In view of the difference of opinion, the
following point was referred for decision of a third Member :
D
"In the facts and circumstances, whether an application filed by
the applicants for rectifying a mistake, can be heard by a Bench
consisting of two members as held by the Member (T) or it should
be heard by a Bench consisting of three members since the main
appeal was heard by a Bench consisting of three members, as E
proposed by Member(!)."

(emphasis supplied).

Sri G.P. Agarwal, Member (Judicial), the third Member, to whom the
matter was referred, held as follows : F

"that in the facts and circumstances of the present application filed
by the appellants for rectifying the mistake can be heard by a Bench
of two Members as constituted by the Hon'b/e President for this
pwpose.' G

(emphasis supplied)

6. During the course of arguments, Section 350 of the Central
Excises and Salt Act and Rule 31-A of the CEGAT {Procedure) Rules
1982 were highlighted before us. They are as follows : H
250 SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A "35-D. Procedure of Appellate Tribunal : (1) The provisions of
sub-sections (1), (2), (5) and (6) of Sec. 129-C of the Customs Act,
1962 (52 of 1962), shall apply to the Appellate Tribunal in the
discharge of the functions under this Act as they apply to it in the
d;scharge of its functions under the Customs Act, 1962.

B (2) Every appeal against a decision or order relating, among other
things, to the determination of any question having a relation to
the rate of duty of excise or the value of goods for purposes of
assessment, shall be heard by a Special Bench constituted by the
President for hearing such appeals and such Bench shall consist of
c not less than three members (two members) and shall include at
least one judicial member and one technical member.

(3) ..........................................................."

(emphasis supplied)
D Rule 31A of the CEGAT (Procedure) Rules 1982:

11
31A. Sanze Bench to hear applications for rectification of mistakes
- An application for rectification of mistake apparent from the
record, under sub-section (2) of section 129B of the Customs Act,
E or sub-section (2) of section 35C of the Central Excises and Salt
Act, or sub-section (2) of section 81A of the Gold (Control) Act,
shall be heard by a Bench consisting of the Members who heard the
appeal giving 1ise to the applicatio11 u11less the President dir~c.t!
othelWise. 11

F (emphasis supplied)

7. We perused the three different orders passed by the Members of
the Tribunal. The majority of the Members have stressed the language of
Rule 31-A in the CEGAT (Procedure) Rules of 1982, in holding that any
application for rectification of mistake can be heard otherwise than as
G prescribed under Rule 31-A if the President so directs. The dissenting
Member Sri Brahma Deva expressed the view that any order passed in the
rectification proceedings will have the effect of modifying, amending or
altering the final order and such rectified order becomes the final order in
the appeal. And so, there is logic and propriety in holding that when once
H an appeal was heard and decided by a Bench consisting of three Members,
ELPRO INTERNATIONAL LTD. v. COLLECTOR OF C.E. [PARIPOORNAN, J.] 251

the rectification proceedings which will have the effect of altering, amend- A
ing or modifying the final order should also be heard by a Bench consisting
of not less than three Member.

8. On hearing counsel, we are of the view that the dissenting order
passed by Sri G.A. Brahma Deva, Member (Judicial) is legal and proper.
B
.It is evident from Rule 31-A of the CEGAT (Procedure) Rules, 1982 that
the same Bench which passed the final order, should hear the application
for rectification of mistakes. Due to subsequent events, a situation may
emerge when one or more of the Members who pronounced the order may
cease to hold the office as a Member of the Tribunal - by retirement, death
or otherwise. Though, ordinarily, the rectification application should be c
heard by a Bench consisting of the Members who heard the appeal giving
rise to the application, the subsequent events or the change in situation or
altered circumstances, may render it impossible. In such a situation, it is
certainly open to the President to direct that the application may be heard
by a Bench consisting of a Member/Members who did not originally hear D
the appeal and passed the order. In other words, the Members, who
constitute the Tribunal for hearing the rectification proceedings, may be
different. To this·extent, the President can direct otherwise. Normally, it
will not enable the President to constitute efltirely. a new and different
Bench, even if one or more .of the Members who heard the appeal and
rendered the order originally, are available: In any view of the matter, Rule E
31-A of the CEGAT (Procedure) Rules 1982 will not clothe the President
with jurisdiction to constitute. a Bench consisting of lesser number of
Members, than the original Bench which heard the appeal and rendered
the final order. We are of the view that the above position follows from a
mere reading of Rule 31·A. This view is in accord with judicial decorum, F
discipline and fairness. Any other interpretation will bring about a situation
to clothe the President of the Tribunal with arbitrary powers. Such an
intention cannot be imputed in framing Rule 31·A.

9. The order passed under Rule 31:A will have the impact of G
altering, amending or modifying the final order. We are of the view that a
final order passed by a Benell of three M~tnbers cannot be modified or
altered or amended by a Bench. consisting
-
of lesser
.
Members.
t
A Full Bench
is superior to a Division Bench and a Division Bench to a single Member
Bench. The object for constituting a Division Bench or Full Bench, is the
fact that multi-Member tribunals create the opportunity for mature H
252 SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A deliberation which improves and enhances individual decision making by
adding perspective~ and excluding or at least minimising faulty reasoning.
Judicial property and fairness require, that so long as it is possible and
feasible, the same number of Members should constitute the Bench to hear
the rectification proceedings as well. It is also prudent and pragmatic and
will avoid chaos. In the above prospective, we hold that the majority
B
decision of the Customs, Excise and Gold (Control) Appellate Tribunal
appealed against, is erroneous in law and so unsustainable. We set aside
the orders so passed dated 5.9.195. The appeals are allowed. There shall
be no order as to costs.
,
c aspectBefore concluding, we would like to make clear two aspects. The first
is, whether a rectification application will lie to rectify an order
passed on rectification application. This aspect was not argued. We kave
this aspect open. The second aspect is more important. We are informed
that innumerable similar/rectification applications are pending before the
Tribunal. We should make it clear that no applicant can claim or insist for
D early hearing or priority hearing of such an application. Taking into ac-
count the overall pendency of such applications, the availability of Mem-
bers to dispose of such applications and the feasibility and practicability to
consti1ute appropriate Bench, it is for the President (subject to the obser-
vations contained in this jud!:,rn1ent) to constitute an appropriate Bench for
E hearing of the application. All that we want to state is that the applicant
cannot insist fur an ~arly hearing or for giving a p!'iority in the matter. It
is for thi; President, to pass appropriate orders in his discretion, by evalua-
tion of the volu1ne of \Vork, pend~ncy of the number of applications,
availability of Members and the practicability of constitution of Benches.

v.s.s. Appeal allowed.