Editorial - 8th Aug ELT Issue

EXCISE LAW TIMES 8th August 2011 69

CESTAT DROWNING “To keep the stream of justice clean and pure, the Judge must be endowed with sterling character, impeccable in-tegrity and upright behaviour. Erosion thereof would un-dermine the efficacy of the rule of law and the working of the Constitution itself. The chosen higher echelons, there-fore, should not be mere men of clay with all frailties and foibles, human failings and weak character which may be found in those in other walks of life.”

— Supreme Court in C.R. Iyer v. Justice A.M. Bhattachar-jee

The CEGAT (now CESTAT) was inaugurated on 11-10-1982 with great pomp and show, hoping that it would provide speedy and eco-nomical justice to the assessee and the revenue department by quick and fair dissolution of tax disputes from an institution in which they have trust and confidence. These hopes were expressed in the following Inaugural Messages given by various dignitaries and in the speech of the Hon’ble Finance Minister.

I hope that the setting up of this Tribunal will… provide a bridge of understand-ing between the tax payers and tax collectors. SHRI ZAIL SINGH

PRESIDENT OF INDIA

We expect the Tribunal to provide speedy justice to assessee without harassment while keeping in view the importance of Government revenue.

SMT. INDIRA GANDHI

PRIME MINISTER OF INDIA

I am sure that the Tribunal will acquire high reputation in the matter of its deci-sion and that the litigants will look upon it as an independent forum to which they can turn in trust and confidence. JUSTICE Y.V. CHAN-DRACHUD

CHIEF JUSTICE OF INDIA

The Constitution of Benches of the Tribunal having one judicial and one Techni-cal Member is bound to give very successful results....

JUSTICE PRAKASH NARAIN

CHIEF JUSTICE, DELHI HIGH COURT

I have every hope that the Appellate Tribunal....consisting of Technical and Judi-cial Members drawn from service as well as from the professions will dispense Justice in such a way as to command confidence of the litigant public.”

SHRI J.N. KAUSHAL

( A53 )


A54 EXCISE LAW TIMES [ Vol. 270

MINISTER OF LAW & JUSTICE

In fact the establishment of the CESTAT was itself taken as an achievement as the Government nearly for 25 years had been disre-garding demand of the trade and industry for creating an independent Appellate Tribunal for dealing with Excise, Customs cases, inspite of the recommendations by the expert committees.

Since then, 29 years have gone into history and the CESTAT, be-traying such hopes, is still struggling to achieve the very objective for which it was constituted, i.e. speedy justice to the tax payers, if one looks at its ever increasing pendencies and the dwindling rate of dis-posal of appeals. The CESTAT is presently passing through crisis due to total failure of managerial control, judicial and administrative indisci-pline, delayed decisions, contradictory orders, out of turn listing of cases, malfunctioning of the Registry, etc. This is also putting a ques-tion mark on the institutional integrity of the CESTAT. The present con-dition is so bad that Hon’ble High Courts, one after another, are pass-ing strictures on the orders of the CESTAT. Recently, even Hon’ble Supreme Court has recorded deep concern on the conduct of the two Benches of the CESTAT for passing conflicting orders on identical is-sues [2011 (269) E.L.T 289 (S.C.)]. The Bangalore Bench of the CESTAT attracted adverse comment from the Hon’ble Karnataka High Court for passing contradictory orders by the same Bench within 24 hours for same consignment involving duty of Rs. 2.19 crores. In this case on the appeal of the importer, Bangalore Bench held no collusion or fraud was involved, whereas on the next day, same Bench on the appeal of foreign supplier of same consignment, recorded a finding of fraud and collusion [2011 (269) E.LT. 218 (Kar.)].

The present alarming state of affairs in the CESTAT is also due to the casual attitude of its present President, Hon’ble Mr. Justice R.M.S. Khandeparkar. His absence from the CESTAT HQ for most of the time, being on tour to his hometown or elsewhere and inaction for years on important files and matters is generating all round frustration, including in the workforce. This has brought CESTAT on the point of to-tal collapse as is apparent from the following :

Disposal of Appeals down by 1/3rd — Pendency of Appeals up by 60% and Stay Applications up by 250% — 2 years waiting for hearing of stay applications and 5-6 years for appeals

The CESTAT is crumbling under the weight of pendency of ap-peals & stay applications, which is now all time high since its inception. Mr. Justice R.M.S. Khandeparkar joined the CESTAT as its President in March 2009, at that time, the pendency of appeals in the CESTAT was 40889 and of the stay applications 3688. This has now (As on 30-6-2011) grown to 64205 appeals and 13088 stay applications. As per Official version an amount of more than ` 40,000 crores is blocked in cases pending before CESTAT. The pendency of the Appeals has in-creased by more than 60% and for the stay applications by more than 250%, which points to a very alarming situation. The disposal rate of


2011 ] CESTAT DROWNING A55

appeals and stay applications in CESTAT is dwindling year by year since Mr. Justice R.M.S. Khandeparkar took over as Head of the CES-TAT. The disposal figures of the CESTAT, released by the Ministry of Finance in its Annual Reports during last four years, are as under :

DISPOSAL OF APPEALS IN CESTAT

Period Appeals Dis-posed

Rate of Dis-posal

(per month)January 2007 to November 2007

126141 1147

January 2008 to March 2009 157572 1050April 2009 to November 2009

79673 995

April 2010 to November 2010

61284 766

The above table shows that rate of disposal of appeals in the year 2010, during the tenure of Mr. Justice R.M.S. Khandeparkar, has gone down by 1/3rd, if compared to the disposal rate for the year 2007. The worst hit are the stay applications, which at some Benches take 2-3 years time in getting listed and the parties have to take extra legal steps for getting them listed. The present dismal condition of the CES-TAT as stated earlier, is also due to the frequent tours of Mr. Justice R.M.S. Khandeparkar, mostly to his hometown at Goa and unwanted tours of the Members, lack of work culture, malfunctioning of the Reg-istry and rampant corruption.

Absence of President due to frequent tours, adversely affecting working of CESTAT

The absence of Mr. Justice R.M.S. Khandeparkar, Hon’ble Presi-dent of the CESTAT from the CESTAT HQ because of his frequent tours is adversely affecting the working of the CESTAT. Most of these tours are made to his hometown Goa, declaring them to be official while CES-TAT has no Bench or Office at Goa and it has let loose the entire admin-istration from the hands of the Hon’ble President as the CESTAT ma-chinery is being misused in presenting his personal tours to Goa, as Of-ficial Tours. This is also having a telling effect on the administration of the CESTAT and many of the important decisions have to wait for long time because of his non-availability at Headquarters. Sudden cancella-tion of fixed hearings for undertaking tours is also causing extreme ha-rassment and financial loss to the litigant public as well as to the Rev-enue Department. For example, as per Cause List of 4-4-2010 and 5-4-2010, all cases listed before the Bench presided over by Mr. Justice

1 As per Annual Report of the Finance Ministry 2007-2008.2 As per Annual Report of the Finance Ministry 2008-2009.3 As per Annual Report of the Finance Ministry 2009-2010.4 As per Annual Report of the Finance Ministry 2010-2011.



R.M.S. Khandeparkar, President were adjourned showing “No Court” in the Cause List itself. On number of occasions listed cases are not taken up due to cancellation of Bench sitting due to sudden proceeding on tour by the President.

The manner in which the Hon’ble President, CESTAT has been undertaking official tours to his hometown Goa, even while on leave or on the pretext of non-existing official meetings, use of official car of Goa Customs to various destinations not related to the working of the CESTAT and issue of large number of questionable protocol messages by Shri S. Chandran, Registrar, CESTAT to the Goa Government de-scribing personal visits of Mr. Justice R.M.S. Khandeparkar as official tours so as to avail State Guest facilities on false pretext, were brought to fore in our earlier Editorials, “CESTAT - Is it a Tribunal for Tours and Travels?” [E.L.T. for 18-7-2011] and “CESTAT - A Kingdom without King” [E.L.T. for 1-8-2011].

The further information reveals that for the tours of Mr. Justice R.M.S. Khandeparkar, Protocol requests have not only been sent to the State Government, but also to the Customs Department. Once the Hon’ble President is a Guest of the State Government, it is not graceful to demand similar facilities from the Customs Department also.

The Hon’ble President had gone on tour to Bangalore from 23-5-2010 to 27-5-2010. The Registrar, CESTAT sent a letter dated 20-05-2010 to the Jt. Secy., Protocol, Govt. of Karnataka for according “State Guest” status to the Hon’ble President for the said Official Tour, which was accorded by the Karnataka Govt., by their letter dated 22-5-2010. Mr. Justice R.M.S. Khandeparkar was provided vehicles by Karnataka State as per the logbook dated 23-5-2010 to 28-5-2010 and he was also provided boarding and lodging at Kumara Krupa Guest House of the Karnataka Government. Inspite of these facilities made available to Mr. Justice R.M.S. Khandeparkar, by the State Govt., the CESTAT, Banga-lore vide its letter dated 12-5-2010 also requested to the Chief Commissioner, Central Excise, Bangalore to provide the following facilities to Mr. Justice R.M.S. Khan-deparkar for the said tour :

(i) Customs Guest House for stay of the Hon’ble President from 23-5-2010 to 28-5- 2010.

(ii) Protocol Officer

(iii) Air-conditioned car with Red Light

(iv) Receiving and seeing off his Lordship at Bangalore Airport and other places

(v) Pilot Vehicle



(vi) Protocol vehicle

(vii) Escort vehicle

(viii) Security by Customs Department

The President, CESTAT before seeking such facilities from the Customs Department should realize that the Customs and Excise De-partment is a litigant party before it in every case and most of the Com-missioners of Customs/Central Excise are eligible candidates for ap-pointment to the CESTAT and the Hon’ble President, CESTAT is a Member of Selection Committee for such appointment. Demand for fa-cilities such as listed above not only tends to effect the independence of the CESTAT but also affects its image, particularly when the State Gov-ernment is providing these facilities to Mr. Justice R.M.S. Khande-parkar.

The consumption of foods and beverages such as upto 25 cups of coffee/tea, 5 breakfast, 5 lunches and 5 dinners in a day, at the Kar-nataka Govt. Guest House by Mr. Justice R.M.S. Khandeparkar is in-dicative of many visitors to the Hon’ble President, which can also be a cause of concern for the Govt., as generally the Judges avoid socializing to insulate themselves.

Illegal payment for Household expenses such as Cooking Gas and Tata Sky recharge coupons for Mr. R.M.S. Khandeparkar

There has been a gross misuse of government funds inasmuch as the CESTAT had been making payments for household expenses of Mr. Justice R.M.S. Khandeparkar such as the cooking gas and Tata Sky re-charge coupons used at his residence at C-1/4, Humayun Road, New Delhi, as is evident from the following Bills, sanction letter. The amount paid by the CESTAT for the household expenses of Mr. Justice R.M.S. Khandeparkar is required to be recovered with interest. Disciplinary action is required to be taken for misuse of government funds.





Frequent modification of Rosters and abrupt cancellation of Benches

The monthly roster issued by President CESTAT, Mr. Justice R.M.S. Khandeparkar notifying composition of Benches is generally modified atleast 10 to 15 times during the month thereby changing the composition and jurisdiction of the Benches. Besides this, Benches are abruptly cancelled for accommodating the tours of the Hon’ble Presi-dent and Hon’ble Members or otherwise also. This is adversely effect-ing the performance and image of the CESTAT.

The deplorable condition prevalent at CESTAT, Delhi during the month of July 2011 was brought out in our last Editorial showing how the Excise regular Bench was abandoned on 18th, 19th and 22nd July 2011 on the basis of oral orders issued by Mr. Justice R.M.S. Khande-parkar from Goa, while on LTC. This resulted in adjournment of 131 listed cases without any hearing or without any intimation about fur-ther date.



The inconvenience and harassment being caused to the litigants by adhoc decisions of Mr. Justice R.M.S. Khandeparkar, Hon’ble Presi-dent of the CESTAT taken from Goa and communicated orally, is re-flected in the following minutes of the meeting between the Chief De-partmental Representative and the Registrar, CESTAT, New Delhi. It gives a true account of the disgusting state of affairs in the CESTAT and gives a feeling that there is no authority in the country to adminis-ter the CESTAT and it is being run as a private property.



Wholesale Tour orders for Members continue unabated — Half of Tribunal on tour during August 2011 also

In our last two Editorials, it was illustrated as to how Mr. Justice R.M.S. Khandeparkar has been issuing wholesale tour orders for the Members of the CESTAT, interchanging their cities or otherwise, for no justifiable reason or public interest. For quite sometime, it is noticed that every month, 8-10 Members of the CESTAT are sent on tour, out of total strength of 18 Members. Thus half of the Tribunal Members gen-erally are sent on tour for no apparent or justifiable reason. Such tours are resulting in frequent changing of the composition of Benches, thereby destabilizing them. Frequent change of composition of Benches, dislodges the mental equilibrium amongst the Members of the Division Bench and directly affects the quality and quantity of their de-cisions. Rotating the Members like a musical chairs, through the instru-mentality of the tour orders, is not a prudent administrative action and by any means, is not in the interest of the CESTAT. The analysis of the Member’s tour orders for the months of May 2011 and July 2011 and their adverse affect were detailed in our previous write-ups. Hereun-der, we are analyzing the recent Tour Order No. 25/2011, dated 29- 7-2011, which reads as under :

Tour Order No. 25 of 2011

The Hon’ble President is pleased to order the following tour pro-gramme to the extent given below :-

1. Hon’ble Ms. Jyoti Balasundaram, Vice-President will be on official tour from CESTAT, Chennai to CESTAT, Delhi w.e.f. 15-8-11 to 3-9-11.

2. Hon’ble Mr. S.S. Kang, Vice-President will be on official tour from CESTAT, Bangalore to CESTAT, Mumbai w.e.f. 31-7-2011 to 3-9-11.



3. Hon’ble Ms. Archana Wadhwa, Member (Judicial) will be on official tour from CESTAT, Ahmedabad to CESTAT, Delhi w.e.f. 31-7-2011 to 3-9-2011.

4. Hon’ble Dr. C. Satapathy, Member (Technical) will be on official tour from CESTAT, Chennai to CESTAT, Delhi w.e.f. 31-7-2011 to 6-8-11.

5. Hon’ble Mr. P.G. Chacko, Member (Judicial) will be on offi-cial tour from CESTAT, Mumbai to CESTAT, Bangalore w.e.f. 31-7-2011 to 3-9-2011.

6. Hon’ble Mr. M.V. Ravindran, Member (Judicial) will be on official tour from CESTAT, Bangalore to CESTAT, Delhi w.e.f. 2-8-11 to 6-8-11.

7. Hon’ble Mr. M.V. Ravindran, Member (Judicial) will be on official tour from CESTAT, Bangalore to CESTAT, Ahmed-abad on 1-8-11 and w.e.f. 7-8-11 to 3-9-11.

8. Hon’ble Mr. D.N. Panda, Member (Judicial) will be on offi-cial tour from CESTAT, Delhi to CESTAT, Kolkata w.e.f. 22-8-2011 to 3-9-2011.

9. Hon’ble Mr. B.S.V. Murthy, Member (Technical) will be on official tour from CESTAT, Ahmedabad to CESTAT, Kolkata w.e.f. 22-8-11 to 3-9-11.

10. The tour order of Hon’ble Mr. S.K. Gaule, Member (Tech-nical) from CESTAT, Kolkata to CESTAT, Mumbai is ex-tended upto 2-9-2011.

By OrderSd/-

(S. Chandran)Registrar

As per this Tour Order, 9 out of 18 Members of CESTAT shall be on tour during the Month of August 2011, completely dislodging the composition and jurisdiction of Regular Benches. A perusal of this tour order shows that Shri S.S. Kang, Vice President shall be on tour to Mumbai from 31-7-2011 to 3-9-2011 and hence there will be no Divi-sion Bench at Kolkata from 1-8-2011 to 22-8-2011. To accommodate the above tour of Mr. S.S. Kang to Mumbai, the regular Judicial Mem-ber of Mumbai, Mr. P.G. Chacko has been sent on tour to Bangalore w.e.f. 31-7-2011 to 3-9-2011. To make room for Mr. P.G. Chacko at CE-STAT, Bangalore, Mr. M.V. Ravindran has been sent on tour to Ahmed-abad from 1-8-2011, 7-8-2011 to 3-9-2011. Shri Gaule has been on tour from Kolkata to Mumbai for more that last six months and to accommo-date him further at Mumbai, Mr. B.S.V. Murthy, is being sent on tour from Ahmedabad to Kolkata. Mrs. Archana Wadhwa, Member (Judicial)



shall be on tour to Delhi from 31-7-2011 to 3-9-2011. To run the Kolkata Division Bench, Mr. D.N. Panda, Member (J) shall be on tour from Delhi to Kolkata from 22-8-2011 to 3-9-2011.

The above tour order issued for sending Members from one Sta-tion to another mostly for a month for no apparent reason cannot be justified. It would have been a different matter if some Member is on long leave and Bench at a particular location is not functional for con-siderable period or there are some similar circumstances. But appar-ently no such situation exits for issue of such a whole sale Tour order.

The above shows that there is lack of any rationale for issuing such massive tour order and it seems to be against the public interest and need to be checked by the Ministry of Finance and responsibility be fixed for such colossal waste of public money.

Roasting the Reversed orders — Signed order not released in ` 377 crores case - 134 Cases repeatedly listed 3-7 times for pronouncement of orders

The Hon’ble Supreme Court time and again warned that unrea-sonable delay between the conclusion of argument and delivery of judg-ment is highly undesirable as delayed delivery of justice results in de-nial of justice. What is most important is that the litigant must have full faith in the result of litigation. This confidence tends to shake if there is excessive delay in delivery of the judgment. But there have been hun-dreds of Reserve Orders pending before the Bench of Hon’ble President from March 2009 and onwards. A list of such Reserved/Pending orders before the Bench of Hon’ble President as on November 2010 giving de-tails of 107 bunches of matters (covering 316 Appeals/Stay matters) was published at page A133 of E.L.T. dated 25-4-2011.

As per CESTAT Order No. 4 of 2009 dated 17-4-2009, the Re-serve orders which have not been pronounced within a period of 6 months, are to be listed for fresh hearing. But the Bench of the Hon’ble President has been keeping the Reserve orders pending even for upto 2 years as is evident from the above referred list. Besides this, the Hon’ble President has been pronouncing orders even after the period of 6 months, flouting his own orders. The orders signed by the other Members on the Bench of Mr. Justice R.M.S. Khandeparkar, are kept pending even for more than a year and recently two orders signed in the year 2009 were issued in May 2011. The details of such acts of the Bench of Mr. Justice R.M.S. Khandeparkar were given in our Editorial – Is President CESTAT flouting his own orders? [See page A60 of E.L.T. dated 20-6-2011]. Now after the publication of the said Editorial, the President was compelled to release 62 pending Reserve orders for rehearing in two installments vide list dated 21-6-2011 and 4-7-2011. Even the Excise & Customs Department has been complaining about delayed passing of orders by Mr. Justice R.M.S. Khandeparkar as is ap-parent from following letter dated 24-6-2011 of the CESTAT Registrar itself.



As stated above, the Bench of Mr. Justice R.M.S. Khande-parkar has been keeping hundreds of Reserve Orders pending since 2009 and onwards. Most of these cases involve huge amount of revenue. It is learnt that after the hearing is over and order is reserved so as to be pronounced at a later stage, people start contacting the parties offering their help in getting a favourable treatment. There are instances when the cases in which orders are reserved have repeatedly been listed 3-7 times in the Cause List for Pronouncement of Orders. A list of 134



such cases of the Bench presided over by Mr. Justice R.M.S. Khandeparkar is given below. Such repeated listing of cases for pronouncement of order, 3-7 times is highly unusual and is in-dicative of the ongoing malady in the CESTAT.Sl. No.

Appeal No. No. of times

Pronoun-cement

of Order

Listed in Cause List

Dates on which

Pronoun-cement of Order Listed in

Cause List

1 E/S/2004/10 E/2094/10

3 21-Jan-1117-Feb-1115-Mar-

112 E/S/3288/09

E/3209/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

103 E/2548/09

E/S/2622/094 22-Dec-10

20-Jan-1103-Feb-1117-Feb-11

4 E/773/08 E/M/742/09

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

5 E/374/04 3 14-Jun-1014-Jul-1006-Aug-

106 E/2345/09

E/S/2422/094 22-Dec-10

20-Jan-1103-Feb-1117-Feb-11

7 E/COD/17/10 E/S/82/10 E/98/10

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

108 E/S/173/10

E/180/103 05-Jul-10

26-Jul-1001-Nov-

109 E/143/05 7 26-Nov-

0930-Nov-

0907-Dec-0908-Jan-1015-Jan-10

Sl. No.


Pronoun-cement

of Order


Dates on which


Cause List

01-Feb-1002-Mar-

1010 E/1838/08 4 29-Apr-10

07-May-10

18-Jun-1023-Jul-10

11 E/1839/08 4 29-Apr-1007-May-

1018-Jun-1023-Jul-10

12 E/S/3282/09 E/3203/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1013 E/200/05 3 10-Dec-09

24-Dec-0911-Jan-10

14 E/3261/05 4 27-Oct-1022-Nov-

1018-Jan-1121-Mar-

1115 E/S/3286/09

E/3207/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1016 E/141/05 7 26-Nov-

0930-Nov-

0907-Dec-0908-Jan-1015-Jan-1001-Feb-1002-Mar-



Sl. No.


Pronoun-cement

of Order


Dates on which


Cause List

1017 E/1038/2006 3 21-Jun-10

26-Jul-1025-Oct-10

18 E/1039/2006 3 21-Jun-1026-Jul-1025-Oct-10

19 E/1040/2006 3 21-Jun-1026-Jul-1025-Oct-10

20 E/1197/05 4 29-Jul-1006-Aug-

1027-Aug-

1001-Nov-

1021 E/5499/04 3 21-May-

1026-Jul-1006-Aug-

1022 E/4144/04 3 05-Jul-10

16-Jul-1030-Aug-

1023 E/4181/04 3 05-Jul-10

16-Jul-1030-Aug-

1024 E/1040/05 3 05-May-

1021-Jun-10

25 E/4687,4740 /04

3 05-Jul-1016-Jul-1030-Aug-

1026 E/1313/05 3 03-Aug-

1030-Aug-

1021-Jan-11

27 E/2197-2198/02

3 08-Mar-10

22-Mar-10

19-Apr-10

Sl. No.


Pronoun-cement

of Order


Dates on which


Cause List

28 E/1030-1031/05

3 03-May-10

21-Jun-1016-Jul-10

29 E/S/1635/10 E/M/869/10 E/1639/10

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

30 E/2821-2822/08 E/M/870/10

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

31 E/3892/04 3 09-Aug-10

18-Aug-10

30-Aug-10

32 E/S/05/10 E/07/10

3 28-May-10

26-Jul-1006-Aug-

1033 E/206/05 6 06-Nov-

0916-Nov-

0930-Nov-

0907-Dec-0908-Jan-1015-Jan-10

34 E/S/3283/09 E/3204/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1035 E/S/2435/09

E/2354/094 03-May-

1021-Jun-1016-Jul-1030-Aug-

1036 E/3256/05

E/M/144/104 27-Oct-10

22-Nov-10

18-Jan-11



Sl. No.


Pronoun-cement

of Order


Dates on which


Cause List

21-Mar-11

37 E/S/3339/09 E/3257/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1038 E/2405-

2406/034 14-Jun-10

14-Jul-1020-Jul-1006-Aug-

1039 E/S/3290/09

E/3211/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1040 E/S/23/10

E/29/104 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1041 E/S/2546/09

E/2466/093 08-Jan-10

15-Jan-1001-Feb-10

42 E/S/1762/09 E/1688/09

3 08-Jan-1015-Jan-1001-Feb-10

43 E/S/1763/09 E/1689/09

3 08-Jan-1015-Jan-1001-Feb-10

44 E/S/3280/09 E/3201/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1045 E/S/3279/09

E/3200/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1046 E/1093/08 4 29-Apr-10

07-May-

1018-Jun-1023-Jul-10

47 E/S/3291/09 E/3212/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1048 E/S/139 &

141/10 E/149-150/10

4 09-Aug-10

18-Aug-10

30-Aug-10

13-Dec-1049 E/S/2384/09

E/2299/093 08-Jan-10

15-Jan-1001-Feb-10

50 E/1294/05 3 03-Aug-10

30-Aug-10

21-Jan-1151 E/2988/07 4 29-Apr-10

07-May-10

18-Jun-1023-Jul-10

52 E/S/1087/10 E/1040/10

4 20-Sep-1020-Jan-1103-Feb-1117-Feb-11

53 E/1929-1930/08

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

54 E/COD/96/10 E/S/609/10 E/596/10

4 19-Jul-1020-Jan-1103-Feb-1117-Feb-11

55 E/1615-1616/08 E/M/742/2009

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

56 E/S/3281/09 E/3202/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1057 E/S/171/10

E/178/103 05-Jul-10

26-Jul-1001-Nov-

1058 E/S/1393/10 3 20-Jan-11



E/1362/10 21-Feb-11 28-Apr-11



59 E/S/2205-2206/09 E/2133-2134/09

3 08-Jan-1015-Jan-1001-Feb-10

60 E/3258/05 4 27-Oct-1022-Nov-

1018-Jan-1121-Mar-

1161 E/2612/03 3 14-Jun-10

14-Jul-1006-Aug-

1062 E/560-574 &

902/063 17-Feb-11

25-Feb-1121-Mar-

1163 E/3259/05 4 27-Oct-10

22-Nov-10

18-Jan-1121-Mar-

1164 E/S/3382/09

E/3307/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1065 E2023/08 4 29-Apr-10

07-May-10

18-Jun-1023-Jul-10

66 E/S/1741-1742/09 E/1675-1676/09

3 18-Jun-1016-Jul-1030-Aug-

1067 E/2362/09

E/S/2441/094 22-Dec-10

20-Jan-1103-Feb-1117-Feb-11

68 E/1391/08 4 29-Apr-1007-May-

1018-Jun-1023-Jul-10

69 E/4987/04 3 22-Feb-1008-Mar-

1006-Aug-

1070 E/S/3284/09

E/3205/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1071 E/S/3340/09

E/3258/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1072 E/S/3289/09

E/3210/094 11-Jun-10

16-Jul-1030-Aug-

1001-Nov-

1073 E/S/3341-

3342/09 E/3259-3260/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1074 E/1728/09 5 15-Apr-10

29-Apr-1007-May-

1018-Jun-1023-Jul-10

75 E/1337/06 3 03-Aug-10

30-Aug-10

01-Nov-10

76 E/S/3285/09 E/3206/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1077 E/5113/04 4 06-Nov-

0916-Nov-

0930-Nov-

0907-Dec-09

78 E/S/61/10 E/60/10

3 12-May-10

25-Jun-1019-Jul-10

79 E/S/1636/10 E/1640/10

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

80 E/S/1794/09 E/1723/09

4 18-Jun-1016-Jul-10



E/M/819/2009

30-Aug-10

25-Oct-1081 E/S/1283/10

E/1248/103 16-Dec-10

21-Jan-1117-Feb-11

82 E/2214/02 6 27-Oct-1022-Nov-

1016-Dec-1021-Jan-1117-Feb-1110-Mar-

1183 E/181/04 6 27-Oct-10

22-Nov-10

16-Dec-1021-Jan-1117-Feb-1110-Mar-

1184 E/2820/05 6 27-Oct-10

22-Nov-10

16-Dec-1021-Jan-1117-Feb-1110-Mar-

1185 E/4370/04 6 27-Oct-10

22-Nov-10

16-Dec-1021-Jan-1117-Feb-1110-Mar-

1186 E/550/05 6 27-Oct-10

22-Nov-10

16-Dec-1021-Jan-1117-Feb-1110-Mar-

1187 E/1828-

1831/056 27-Oct-10

22-Nov-10

16-Dec-1021-Jan-1117-Feb-1110-Mar-

1188 E/3522/05 6 27-Oct-10

22-Nov-

1016-Dec-1021-Jan-1117-Feb-1110-Mar-

1189 E/494/06 6 27-Oct-10

22-Nov-10

16-Dec-1021-Jan-1117-Feb-1110-Mar-

1190 E/2024/08 4 29-Apr-10

07-May-10

18-Jun-1023-Jul-10

91 E/1079/08 4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

92 E/2304/09 E/S/2389/09

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

93 E/2535,2537/07

3 25-Jun-1019-Jul-1023-Nov-

1094 E/S/678/10

E/663/104 09-Aug-

1018-Aug-

1030-Aug-

1020-Dec-10

95 E/S/3292/09 E/3213/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1096 E/3978/03 3 14-Jun-10

14-Jul-1006-Aug-

1097 E/3260/05

E/M/146/104 27-Oct-10

22-Nov-10

18-Jan-1121-Mar-

1198 E/S/3293/09

E/3214/094 11-Jun-10

16-Jul-10



30-Aug-10

01-Nov-10



99 E/S/1315/09 E/M/191/10 E/1299/09

6 26-Mar-10

09-Apr-1007-May-

1018-Jun-1016-Jul-1018-Aug-

10100

E/2363/09 E/S/2442/09

4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

101

E/1770/05 3 03-May-10

21-May-10

26-Jul-10102

E/S/93/10 E/108/10

3 12-May-10

25-Jun-1019-Jul-10

103

E/S/60/10 E/59/10

3 12-May-10

25-Jun-1019-Jul-10

104

E/S/96/10 E/111/10

3 12-May-10

25-Jun-1019-Jul-10

105

E/S62/10 E/61/10

3 12-May-10

25-Jun-1019-Jul-10

106

E/3893/04 3 09-Aug-10

18-Aug-10

30-Aug-10

107

E/S/170/10 E/177/10

3 05-Jul-1026-Jul-1001-Nov-

10108

E/774/08 4 22-Dec-1020-Jan-1103-Feb-1117-Feb-11

109

E/3895/04 3 09-Aug-10

18-Aug-10

30-Aug-10

110

E/S/3335/09 E/3252/09

4 11-Jun-1016-Jul-10

30-Aug-10

01-Nov-10

111

E/S/94/10 E/109/10

3 12-May-10

25-Jun-1019-Jul-10

112

E/S/679/10 E/664/10

4 09-Aug-10

18-Aug-10

30-Aug-10

20-Dec-10113

E/S/172/10 E/179/10

3 05-Jul-1026-Jul-1001-Nov-

10114

E/S/2100/09 E/2036/09

3 04-Feb-1025-Feb-1009-Mar-

10

115

E/3894/04 3 09-Aug-10

18-Aug-10

30-Aug-10

116

E/S/3336/09 E/3253/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

10117

E/2177/98 3 25-Oct-1001-Nov-

1023-Nov-

10118

E/4676/04 3 26-Nov-09

30-Nov-09

07-Dec-09119

E/459/04 3 14-Jun-1014-Jul-1006-Aug-

10120

E/S/3338/09 E/3256/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

1012 E/144/05 7 26-Nov-



1 0930-Nov-

0907-Dec-0908-Jan-1015-Jan-1001-Feb-1002-Mar-

10122

E/S/3383/09 E/3308/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

10123

E/S/95/10 E/110/10

3 12-May-10

25-Jun-1019-Jul-10

12 E/207/05 6 06-Nov-

4 0916-Nov-

0930-Nov-

0907-Dec-0908-Jan-1015-Jan-10

125

E/S/3287/09 E/3208/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

10126

E/S/3334/09 E/3251/09

4 11-Jun-1016-Jul-1030-Aug-

1001-Nov-

10



The case of Salora International & Others is an exemplary one.

In this case, a bunch of 15 appeals involving an amount of ` 377 crores

was heard by the Bench of Mr. Justice R.M.S. Khandeparkar, President

CESTAT and Mr. Rakesh Kumar, Member (Technical) and after conclu-

sion of the hearing on 12-01-2010, the orders were reserved. On 02-02-

2010, this case was listed for Pronouncement of Orders, but order

was not pronounced. It again appeared in the Cause List of 11-3-2010

for Pronouncement of Orders, but still no order was pronounced by the

Bench of Hon’ble President. It is learnt that Department moved some

application for vacation of stay, but they were also not listed for months

together. The Chief Departmental Representative by his letter dated

30-3-2011 requested the Registrar, CESTAT to bring the matter to the

notice of the Hon’ble President, about the misuse of process of the Tri-

bunal in this case. The Registrar by his letter F. No. 01(02)/REG/

MISC/CESTAT/2010, dated 31-3-2011 responded to the CDR and stated

that as per Hon’ble President, “The order has been signed and will

be pronounced, as soon as they are ready”. The said letter of the

Registrar reads as

under :



This order of the Hon’ble President as circled above is very pe-culiar and raises many questions. Firstly, when the reserve order was already signed, then what remained to be ‘ready’; secondly, the day when the reserve order was signed and why it was not pronounced on that day; thirdly, who had signed the reserve order?; fourthly, why this signed order has not so far been pronounced, inspite of President’s as-surance for pronouncing it ‘soon’, rather the appeal files have now been released for fresh hearing on 21-06-2011 vide Sl. No. 22 of the note of the PS to the Hon’ble President and fifthly, the name of the Member who has written the reserve order and the date on which it was sent to the other Member.

The crucial question is when the reserve order was al-ready “signed” as per Hon‘ble President, then what prevented the Bench to pronounce that order. This case and 134 other cases, as referred to above and which have repeatedly been listed for “Pronouncement of Order” need to be investigated by an independent agency, preferably CBI and once an investiga-tion is undertaken, number of skeletons shall tumble out from the ‘Almirah of Reserve Orders’.

President, CESTAT usurping jurisdiction over ` 440 crores case — Repeated adjournments and non-listing of case by Mr. Justice R.M.S. Khandeparkar resulting in loss of ` 150 crores to Revenue

This is another case which also needs to be referred to the CBI for investigation about the questionable manner in which it has all through been handled in the CESTAT at Bangalore and New Delhi.

The facts of the case are that Bangalore Bench of the CESTAT granted unconditional waiver of pre-deposit of Rs. 440 crores to Bharti Airtel Ltd. & others by its order dated 22-10-2008 [2009 (237) E.L.T. 469] and case was fixed for out of turn final hearing on 25-11-2008, but the Bench of Shri T.K. Jayaraman, Member (Tech) and Shri M.V. Ravin-dran, Hon’ble Member (Judicial) adjourned it to 6-1-2009 and then to 15-1-2009. On 16-1-2009, the order was reserved in this case. But be-fore the order could be pronounced, the Hon’ble President by fax mes-sage dated 25-5-2009 directed not to issue the order in respect of cases pending for more than 4 months as evident from the following note of Member (Technical), Bangalore :

“NOTE



When I was on the point of giving my findings in respect of this (Bharti Airtel) reserved order, the fax message dated 25-5-2009 was received from the Hon’ble President not to issue or-ders in respect of cases pending for more than four months. This case was finally heard on 16-1-2009. Due to enormous records which had to be gone through, it could not be completed within a period of four months. In view of the instructions received, the ap-peals should be re-listed for hearing only after obtaining the per-mission from the President. Further it is recorded that the order was almost complete.” [Emphasis supplied]

The original records of this case were forwarded on 27-5-2009 by the Bangalore Bench to the CESTAT Headquarter at New Delhi for consideration and further necessary action by the Hon’ble President who did not take any action or decision in the matter for more than 1 year 3 months. Mr. Justice R.M.S. Khandeparkar issued directions to the CESTAT, Bangalore for listing these appeals for hearing on 7-9-2010 and then he went on tour to CESTAT, Bangalore. On 7-9-2010 this matter was listed at Bangalore Bench comprising of Mr. Justice R.M.S. Khandeparkar, Hon’ble President and Shri P. Kartikeyan, Member (Technical) and it was adjourned to 21-10-2010 and then same Bench again adjourned it to 5-1-2011. However, on 5-1-2011 and 6-1-2011, Hon’ble President along with Shri Rakesh Kumar, Member (Tech) of Delhi Bench went on tour to CESTAT, Bangalore and heard this matter for two days and by order dated 6-1-2011 adjourned it to 1st, 2nd, 3rd and 4th February, 2011, for completion of arguments with clear direc-tions that no further adjournment shall be granted under any circum-stances. The said order reads as under:

“Heard the learned Counsel for the appellants yesterday and to-day. Arguments have remained unconcluded on behalf of the ap-pellants. Matters adjourned for further hearing to 01st, 02nd, 03rd and 04th February, 2011 with a clear intimation that matters would not be adjourned any further under any circumstances”.

However, inspite of the above Bench Order that “matter would not be adjourned any further under any circumstances”, still Mr. Justice R.M.S. Khandeparkar, Hon’ble President, as per letter dated 21-1-2011 of the Registrar, directed for adjourning this part-heard matter from 1st to 4th February, 2011 to 14th to 18th March, 2011. The said direction reads as under :

“Hon’ble President has directed to inform you that matters listed before Hon’ble Mr. Justice R.M.S. Khandeparkar, President and Hon’ble Mr. Rakesh Kumar, Member (Technical) from 1st Febru-ary to 4th February 2011 stand adjourned to 14th to 18th March, 2011.”

The above direction of Mr. Justice R.M.S. Khandeparkar is ille-gal as the Bench order cannot be nullified by the President and ad-journment, if any, in the matter could only be granted by the part-heard Bench of the Hon’ble President and Shri Rakesh Kumar, Member (T). The letter dated 21-1-2011 gave no reasons for the said adjournment as



to whether it was at the request of any Party or for any other reason. This adjournment resulted in favour to the party who had been enjoying an unconditional stay of ` 440 crores. Surprisingly, on 14-3-2011, this part heard matter was listed before the Bench of Shri M.V. Ravindran, Hon’ble Member (Judicial), and Shri P. Kartikeyan, Member (Tech.), and they illegally assumed jurisdiction over this part-heard matter and adjourned it to 19th to 21st April 2011. On 19th of April, 2011, this matter was not listed in the Cause List for hearing and there are no records available of any proceedings of this date.

All of a sudden, notices were issued by the CESTAT, Bangalore for hearing the case of Bharti Airtel from 21st to 24th June, 2011 and as per the Roster order No. 105/2011, this matter was to be heard by the Bench of Mr. Justice R.M.S. Khandeparkar and Shri B.S.V. Murthy, Member (Tech). However, by fax message dated 14-6-2011 to the Hon’ble President, Shri B.S.V. Murthy, is learnt to have sought recusal from hearing the said case of Bharti Airtel. Subsequently, Shri B.S.V. Murthy was surprisingly transferred to Mumbai Bench in-stead of Bangalore Bench, though his request for transfer to Bangalore had the approval of the President, CESTAT and the Hon’ble Finance Minister.

The most curious aspect of this part-heard case is, as to how this matter was to be heard at CESTAT Bangalore from 21-6-2011 to 24-6-2011, by a different Bench also comprising of Mr. B.S.V. Murthy, Hon’ble Member (T). As per the terms of above Order dated 6-1-2011, this case was treated as part-heard. This is further collaborated by above letter dated 21-1-2011 of the Registrar wherein this matter is stated to be listed before Mr. Justice R.M.S. Khandeparkar, Hon’ble President and Shri Rakesh Kumar, Member (T) for further hearing on 1-2-2011, 2-2-2011, 3-2-2011 and 4-2-2011. As per our information this case has not so far been released by the Bench of Hon’ble President and Shri Rakesh Kumar, Member (T), therefore placing it for hearing before any other Bench was highly illegal and improper.

When this case was heard on 5th & 6th Jan 2011 at Bangalore, Mr. P. Karthikeyan, the regular Technical Member of Bangalore Bench was sent out on tour to Kolkata, thereby making room for Mr. Rakesh Kumar, Member (T) and when this matter was to be heard again at Bangalore on 21st to 24th June 2011, this time, Shri Rakesh Kumar, Technical Member of the part-heard Bench was also sent out on tour to Kolkata to make room for Shri B.S.V. Murthy, Member (T). It is perti-nent to mention here that earlier in April 2011, there had been a differ-ence of opinion between the Hon’ble President and Shri Rakesh Kumar, Member (Tech.) in a famous Gutka case of Kuber Tobacco at New Delhi.

A VIP reference to the Finance Minister, highlighted the extra-ordinary delay in disposing the appeal of Bharti Airtel, thereby, giving them the benefit of the stay at the cost of the Revenue Department. Regarding the delay in hearing of the case of Bharti Airtel and working



of the CESTAT, the said VIP reference stated as under :

“Sir, every day we are hearing of corruption in every aspect of our lives. When such blatant abuse of power is not being challenged, quite obviously there are certain forces within the Revenue De-partment who are conniving to ensure that there is delay in hear-ing so that the money can be retained by the Companies. I would urge you to direct immediate action in the matter especially since both the High Court and the Supreme Court have commented ad-versely on the functioning of CESTAT.”

The Minister of State for Finance, Mr. S.S. Palanimanickam, vide his D.O. Letter No. F.No. 390/Misc./VIP/186/2010-JC, dated 14-12-2010 responded to the aforesaid VIP reference stating that waiver of pre-deposit in the case of Bharti Airtel Ltd. was granted with a caveat that case would be listed for final hearing immediately and during hear-ing at CESTAT, Bangalore on 21-10-2010, the Party was given last op-portunity. The Minister further informed “that the matter would be finally heard and concluded on 5-1-2011”. Inspite of this assurance of the Minister of State for Finance, this case was adjourned from 1st, 2nd, 3rd & 4th Feb. 2011 to 14th to 18th March 2011, by Mr. Justice R.M.S. Khandeparkar without recording any reason. This has resulted in favor to the Party and continuation of unconditional stay. The acts and omissions of Mr. Justice R.M.S. Khandeparkar, Hon’ble President of the CESTAT has wiped out the effect of the caveat with which the stay order was granted, as nearly 3 years have gone into history and yet the matter has not been finally heard and disposed of at Tribunal stage. This is nothing shorter than judicial indiscipline resulting in mis-carriage of justice to Revenue Department.

As stated earlier this matter needs to be investigated by the CBI also on the following points :

(i) For keeping the original records of this case by Mr. Justice R.M.S. Khandeparkar from 27-5-2009 to 1-9-2010 and for his not taking any action or decision in the matter for a pe-riod of 1 year and 3 months, thereby blocking any pro-ceedings in the matter resulting in favour to the party for continuation of unconditional stay of ` 440 crores causing loss of interest of ` 150 crores to the exchequer.

(ii) For sending Shri P. Karthikeyan on tour to Kolkata during January 2011 so that Shri Rakesh Kumar, Member (T) from Delhi could be placed on the Bench by bringing him on tour from Delhi to Bangalore.

(iii) For granting adjournments on 7-9-2010 and 21-10-2010 for no valid ground.

(iv) For granting illegal adjournment in violation of Bench Or-der dated 6-1-2011, by Mr. Justice R.M.S. Khandeparkar while such adjournment can only be granted by the Bench.

(v) For allowing a part heard matter to be dealt with by Shri M.V. Ravindran, Hon’ble Member (Judicial), and Shri P.



Karthikeyan, Member (T) on 14-3-2011 and then to be a party to listing of this part-heard matter before the Bench of Mr. Justice R.M.S. Khandeparkar and Shri B.S.V. Murthy, Member (T), and for not making arrangements for hearing the matter on 1-2-2011 to 4-2-2011, 14-3-2011 to 18-3-2011, 19-4-2011 to 21-4-2011 and 21-6-2011 to 24-6-2011, resulting in favour to the party with the continuation of unconditional stay of Rs. 440 crores.

Inaction by President, CESTAT in ` 77 crores appeals — HC di-rection for disposal of Appeal in 4 weeks not complied even in 4 years

This is a classic case where Mr. Justice R.M.S. Khandeparkar, Hon’ble President of the CESTAT is holding the file for nearly a year in-spite of the Hon’ble High Court directions to dispose of the case in four weeks. Besides this there is also a request from Senior Member (Judi-cial), Shri P.G. Chacko to constitute same Bench for re-hearing of the case for quick decision. Inaction by the President, CESTAT is not only contemptuous but is also causing great damage to the cause of the rev-enue and reputation of the CESTAT. The officers of DRI and other agen-cies of the Excise and Customs Department risk their lives and book cases which are so casually dealt with in the CESTAT. The Preventive and Intelligence Officers would be disheartened to book good cases, if present trend continuous in the CESTAT.

The facts of this case are, the Commissioner of C. Ex., Thane-I, in the case of Shivarati Textiles Pvt. Ltd. and Others by orders dated 21-10-2005 confirmed demand and penalty of nearly ` 77 crores. How-ever, the Bench of Smt. Archana Wadhwa, Member (J) and Shri S.S. Sekhon, Member (T), granted unconditional full waiver of the said amount by their order dated 8-8-2006 as reported in 2006 (205) E.L.T. 817. The Order was challenged by Department before the Hon’ble High Court of Bombay, in Writ Petition No. 266 of 2007. By order dated 7-6-2007 the Hon’ble Bombay High Court directed CESTAT for disposing the pending appeal expeditiously and preferably within a period of four weeks and passed the following order :

“2. ……….. In the aforesaid facts and circumstances, we direct CE-STAT to expeditiously dispose of the aforesaid pending appeal as expeditiously as possible preferably within a period of four weeks from today.

3. Writ Petition stand disposed of accordingly. Both learned counsel for the petitioner and the respondents categorically state that they will not protract or seek any adjournment before CESTAT.” [Emphasis supplied]

After the above order of the Bombay High Court and assurance of the Counsels not to seek adjournment before the CESTAT, this mat-ter has been adjourned number of times on one or the other ground. Lastly, this matter was heard by the Bench of Mr. P.G. Chacko, Hon’ble Member (J) and Shri M. Veeraiyan, Hon’ble Member (Tech), CESTAT, for six days ending on 18-2-2010 and order was reserved. It is learnt



that even part of the order was dictated in the Open Court. Since the order was not likely to be finalized for pronouncement within six months, Mr. P.G. Chacko by his note dated 13-8-2010 requested for constitution of same Bench for rehearing of the matter as both the Members have already made some headway through telephonic discus-sion in thrashing out some of the issues in this case. This note of Shri P.G. Chacko was forwarded by the Asst. Registrar, CESTAT, Mumbai to the Hon’ble President on 13-8-2010. But as per our information, no ac-tion in the matter has been taken by Mr. Justice R.M.S. Khandeparkar, even though nearly a period of one year has already lapsed when the note of Senior Judicial Member, Shri P.G. Chacko was sent to him. It is unfortunate that in spite of directions of the Bombay High Court for de-ciding the appeal in four weeks the CESTAT has failed to decide it even in “four years”.

CESTAT DROWNING

The very purpose of bringing in a retired Judge of the High Court as President of the CESTAT is getting defeated by such happen-ings. The conduct of the Hon’ble President in neither allowing the same Bench to hear the matter nor releasing it to be decided by an-other Bench needs to be examined by the authorities because it shakes the confidence of the public in the CESTAT. The time lost can never be regained, a rehearing by the same Bench after a period of one year practically has no meaning. Had timely decision been taken by Mr. Jus-tice R.M.S. Khandeparkar, Hon’ble President of the CESTAT, the time and labour of two Hon’ble Members spent in hearing this matter for six days, could have been utilised. But it seems that the frequent tours of the Hon’ble President, CESTAT never gave him enough time to attend to the day to day affairs of the CESTAT. This is not the solitary case where the President had been withholding the file without any decision or action.

Dumping the Anti-dumping appeal — Inaction by President, CE-STAT resulting in automatic stay of ` 9 crores for 2 years — Fixation of responsibility for loss to Revenue

This is yet another case where because of the inaction of the President, CESTAT, there is an automatic stay of the recovery of nearly ` 9 crore for 2 years inspite of the adverse decision of the three Mem-ber anti-dumping Bench in the case of Nitco Tiles – 2006 (193) E.L.T. 17 and Division Bench decision of the Kerala High Court in the case of Commissioner v. Akash Trading Co. – 2010 (253) E.L.T 734, against the party.

In this case, the Appellants filed two appeals in the CESTAT challenging the levy of anti-dumping duty involving nearly Rupees 9 crores. The Stay applications along with COD were heard and orders were reserved on 10-7-2009 by the Bench of Ms. Jyoti Balasundaram, Hon’ble Vice President and Dr. C. Satapathy, Hon’ble Member (Techni-cal). As per Note dated 30-7-2009 of Ms. Jyoti Balasundaram, Hon’ble



Vice President, she is stated to have recorded an order proposing total waiver of pre-deposit on the ground that the case of Sheth Developers involving similar issue has been referred for Larger Bench. However, Hon’ble Technical Member, Dr. C. Satapathy recorded an order proposing direction for pre-deposit of entire amount as the request for referring the case of Seth Developer to Larger Bench had already been rejected by the Hon’ble President of the CESTAT. Ms. Jyoti Balasun-daram, Hon’ble Vice President by her another note dated 30-7-2009 di-rected for the fresh hearing of the matter but Dr. C. Satapathy, Hon’ble Member (Technical) by his another note dated 3-8-2009 disagreed with direction for relisting of the matter on the ground that since both the Members have already recorded separate orders containing difference of opinion, law requires that a reference should be made to the Hon’ble President in terms of Section 129C (5) of the Customs Act, 1962.

Dr. C. Satapathy, Hon’ble Member (Technical) by his letter dated 25-8-2009 to Hon’ble President of the CESTAT requested for necessary advice and direction. Subsequently by fax massages of 25-8-2009, the CESTAT headquarter called for original records of this case for perusal of the Hon’ble President. The CESTAT Chennai Bench by letter dated 26-8-2009 forwarded the said original case record of Ap-peals but till date Hon’ble President has not taken any decision in the matter.

It is most unfortunate that Mr. Justice R.M.S. Khande-parkar, Hon’ble President of the CESTAT is withholding this file for the last 2 years without any action or decision thereby result-ing in favour to the party with the automatic stay of ` 9 crores. By keeping the original records with him, the President has nei-ther taken decision himself nor is allowing the respective Bench to take the decision. Such inaction of the President is causing great prejudice to the interest of Revenue and reputation of the Tribunal.

Mr. Justice S.N. Jha, then president of the CESTAT by his order dated 30-4-2008 declined to refer the anti-dumping case of Seth Developers to the Larger Bench on the ground that conflict between the decision of Harsh International and Nitco Tiles is not real, as Nitco Tiles case was itself decided by Larger Bench and was binding on Division Bench. A Note dated 12-5-2008 was put up by the Assistant Registrar, Mumbai to Shri M.V. Ravindran, Hon’ble Member (Judicial), informing the afore-said decision of the Mr. Justice S.N. Jha. Shri M.V. Ravindran, on same day ordered the case of the Seth Developers to be listed before the Regular Bench. Subsequently on 5-6-2008, this case was listed before the Bench of Ms. Jyoti Balasundaram, Hon’ble Vice-President and Shri A.K. Srivastava, Hon’ble Member (Technical). At the said hearing the case was adjourned to 16-7-2008 by the following signed order of Ms. Jyoti Balasundaram and Shri A.K. Srivastava.



This shows that Ms. Jyoti Balasundaram, Hon’ble Vice-President on 5-6-2008 itself had dealt with the said appeal of Sheth Developers and thus was, in the know of the rejection of the reference to Larger Bench in the said case. Besides above, in the case of Sark International, the record of proceedings for 23-3-2009 shows that this case was originally adjourned to 5-5-2009 but subsequently this date has been scored off and hearing was prepounded to 30-4-2009 by a different ink, even this prepounded date of 30-4-2009 was further prepounded to 24-4-2009 by overriding with the different ink. Such deletion and overwriting in the records of proceeding has not been signed or initialed therefore such manipulation seems to have been done at any subsequent dates.

In relation to all above irregularities and illegalities, a detailed complaint dated 8-7-2009 was made by us to Mr. Justice R.M.S. Khan-deparkar, Hon’ble President of the CESTAT, which is still pending with him though 2 years have already lapsed.

A detailed enquiry into all aspect of this matter including tem-pering with the judicial records, proposed waiver of pre-deposit on the ground of reference to the Larger Bench being pending and inaction by the President CESTAT for nearly 2 years of summoning the original records thereby causing loss to the public revenue, is required.



Irregularity in listing & hearing of Gutka case of ` 40 crores

The Bench of Mr. Justice R.M.S. Khandeparkar, Hon’ble Presi-dent of the CESTAT and Rakesh Kumar, Member (Technical) by their order dated 15-1-2010 in the case of Pan Parag India v. CCE, Kanpur – Appeal E/365/2009, while accepting the compliance report for pre-de-posit of the amount in question also ordered that “… the Appeal is to be listed for regular hearing in due course”. Again while extending the stay, the said Bench by its order dated 19-2-2010 stated that the present appeals relate to the year 2009 and the Tribunal is presently hearing appeals of the year 2005-2007 and there is no possibility of the present appeal being taken up for hearing immediately or within next 6 months. However, the same Bench by order dated 6-8-2010 departing from its earlier orders, granted early hearing in this matter for 23-9-2010. But this appeal remained to be decided. Thereafter in the first week of July 2011, this matter was mentioned in the Open Court of the Hon’ble President CESTAT and direction was issued for listing it on 13-7-2011.

On 13-7-2011 this matter was listed on top of the list even though there was already another matter of Aquamali Water (Appeal No. E/3921/2005) ordered to be listed “Top on Board”. Though the ap-peal of Aquamali Water pertained to the year 2005 still it was pushed to second position. As per practice when on a day, two matters are or-dered on Top of Board they are to be listed in chronological order but it was not done. The Appeal of Aquamali Water as stated earlier was of the year 2005, while the appeal in the Pan Parag was of the year 2009. Thus the appeal of Aquamali Water should have been listed as Item No. 1, There is another irregularity in listing the appeal of Pan Parag as Item No. 1 on 13-7-2011, in as much as, the appeal of Haryana Acrylic Mfg. – (Appeal No. E/2648/1999) which was a remand matter from the High Court has been listed as Regular Matter No. 7, while as per prac-tice, the remand matters from High Court and Supreme Court are given priority and listed on top of the list. Moreover, the appeal in this High Court remand matter was of the year 1999.

The amount involved in the case of Pan Parag is around Rupees 40 crores and the order-in-original runs into nearly 1500 pages. In this matter the hearing had taken place on 13th and 14th July, 2011 and or-ders were reserved. It is noteworthy that the Bench of Hon’ble Presi-dent was already having large number of pending Reserve Orders waiting for pronouncement whereas Hon’ble President is retiring on 12th of August 2011, and most likely, reserve orders in such earlier cases may not at all be pronounced.

Judicial orders being ignored by President, CESTAT

The Bench of Shri D.N. Panda, Hon’ble Member (J) and Shri Rakesh Kumar Member (T), on 7-7-2011, after hearing the appellant in the part-heard matter of Batra Hospital v. CC New Delhi (Appeal No. C/359/2005) ordered it to be listed for 12-7-2011, for continuation of hearing. Similarly on 7-7-2011, the case of Sun International v. CC,



New Delhi (Appeal No. C/78/2006) was also adjourned to 14-7-2011 by the same Bench. On 7-7-2011, the Re-hearing matter of Navodya Fab-rics v. CC, Amritsar (Appeal Nos. C/592-593/2006) was also adjourned to 13-7-2011 by the Bench of Shri D.N. Panda, Hon’ble Member (J) and Shri Rakesh Kumar, Member (T).

The time bound Delhi High Court remand matter in the case of C.C., New Delhi v. Kamal Bajaj (Appeal No. C/59/2008), on 8-7-2011, was ordered to be further listed for 12-7-2011 by the Bench of Shri D.N. Panda, Hon’ble Member (J) & Shri Rakesh Kumar Member (T).

In spite of number of the judicial orders passed by the Bench of Shri D.N. Panda, Hon’ble Member (J) and Shri. Rakesh Kumar Member (T), directing the listing of part-heard matter, rehearing matter and High Court time bound remand matter on the adjourned dates, neither the said Bench was constituted by the President for those days nor the CESTAT Registry listed these matters in the Cause List. It is learnt that the Registry has put up a note for hearing of these cases on the ad-journed dates by the said Bench but no action was taken by the Hon’ble President. The Chief Departmental Representative, in this respect, has lodged a strong protest with the CESTAT vide para 6 of the Minutes of the Meeting dated 19-7-2011 (reproduced above). It is unfortunate that the judicial orders passed by the CESTAT Benches are not being given effect by the Hon’ble President of the CESTAT. In contrast to this posi-tion, the Single Member Bench of Shri M.V. Ravindran, Hon’ble Mem-ber (Judicial), CESTAT, which was hearing difference of opinion matter in the famous case of Kuber Tobacco (Appeal Nos. E/560-574/2006), and which Bench was constituted only for 14th & 15th July, 2011, but it was promptly constituted again for the adjourned dates i.e. 18-7-2011, 19-7-2011 and 20-7-2011, even by abandoning Regular Division Bench on 19th & 20th July 2011, and for this purpose some Roaster amend-ments were also made telephonically by President CESTAT from Goa, where he had gone on LTC. It is noteworthy that Mr. Justice R.M.S. Khandeparkar was himself a Member of the differing Bench in this case.

In another instance, the Single Member Bench of Hon’ble Vice-President Mr. S.S. Kang by Order dated 30-3-2005 directed the transfer of Appeal No. E/3139/2004 to Division Bench as the amount involved was more than ` 10 Lacs. The Bench passed the following judicial order :

“Amount involved in this appeal is more than 10 Lacs. To be listed before DB.”

In inspite of this judicial order, the Divisional Bench presided over by Mr. Justice R.M.S. Khandeparkar, on 4-11-2009 directed the Registry to verify whether matter relates to the jurisdiction of Single Member Bench and then to do the needful. It is strange that, Hon’ble President who happens to be a former judge of the High Court, can ask the Registry to decide about the jurisdiction of the Bench over the ap-peal when a Bench itself, by an judicial order had already decided about the jurisdiction over the matter. This shows that how the Hon’ble



President is treating the judicial orders passed by the other Members of the Tribunal.

Inaction by the President, CESTAT on the Note of Member, (Technical) for relisting of 39 cases because of expiry of 6 months period

Shri Rakesh Kumar, Hon’ble Member (Technical) by his commu-nication sent to the President on 5-5-2011 (Dy. No. 1253) requested for issue of direction for relisting of 39 cases in which the reserved orders were marked to him for recording the order, but orders could not be pronounced within six months. It is learnt that no direction or order on the said request has so far been issued by the Hon’ble President even though these cases pertain to the Bench of the Hon’ble President and Shri Rakesh Kumar, Hon’ble Member (T) has been on the Bench with the President for hearing these cases. Such inaction on the part of the President is causing sufferance to the tax payers whose appeals, even after having been finally heard, remain pending for no fault on their part. The Hon’ble President by not releasing such cases for rehearing, is doing great injustice to the parties as their cases are neither being decided nor being released for re-hearing. On the other hand, the Rev-enue Department is also suffering because of non-hearing of these ap-peals as their revenue is getting blocked. The Ministry of Finance should order an inquiry into the matter to fix the responsibility as to how hundreds of Reserve Orders were not pronounced by the Bench of Hon’ble President and also for inaction on the part of the President for not ordering the rehearing in these cases inspite of the note of the Member (Technical) or expiry of 6 month period as prescribed in CES-TAT Order No. 4/2009.

Missing Records for irregular transfer of Shri M.V. Ravindran to CESTAT, Mumbai — President withholding file for 2 years

The file relating to the irregular transfer of Shri M.V. Ravindran, Hon’ble Member (Judicial), CESTAT from Delhi to Mumbai has been missing since very beginning. Shri M.V. Ravindran, Hon’ble Member (Judicial) was initially posted in Delhi but was illegally transferred to Mumbai in March 2007 against the notified transfer policy of the Gov-ernment of India, whereunder a person earlier practicing at a station cannot be posted there. Shri M.V. Ravindran, Hon’ble Member (Judi-cial), CESTAT, prior to joining the CESTAT was practicing as an Advo-cate at Mumbai. The irregularity in the transfer of Shri M.V. Ravin-dran, Hon’ble Member (Judicial), CESTAT to Mumbai has been rectified by para 4 of the CESTAT Order dated 23-10-2008. The subject file re-lating to the transfer of Shri M.V. Ravindran, Hon’ble Member (Judi-cial), CESTAT could have shown the blatant irregularity in his transfer to Mumbai. Our number of communications to the CESTAT Administra-tion for lodging a police complaint in this respect have neither been acted upon nor responded to. Ultimately, on an RTI Appeal, Learned First Appellate Authority, by its order dated 1-9-2008 treating the mat-



ter regarding misplacement of transfer file of a Member, as sensitive, hence directed it to be referred to the Hon’ble President. The CPIO by his letter dated 10-11-2009, forwarded the said order of the First Ap-pellate Authority to the Hon’ble Registrar for placing it before the Hon’ble President. The CPIO, CESTAT now by his letter dated 27-6-2011 has confirmed that the matter is still pending with Hon’ble Presi-dent, for taking a decision. Because of the time already lost due to the inaction of the Hon’ble President, the chances for retrieving the miss-ing file have almost receded. Inaction on the part of the President, CES-TAT seems to have shielded the staff who had helped in pilfering the file relating to the irregular transfer of Shri M.V. Ravindran. There is a need for filing a police complaint so that file be recovered and the per-sons who are involved in pilfering the records of the CESTAT could be brought before the Law.

Difference of opinion matters kept pending by the President for years – Favourable treatment to the difference of opinion matter in Kuber Tobacco’s case involving ` 44 crores

The number of difference of opinion matters are pending at dif-ferent Benches of the CESTAT for years together. The Asst. Registrar, CESTAT, Ahmedabad by his letter No. RTI/25/11/CESTAT/Ahd./326, dated 11-7-2011, has provided a list of 37 difference of opinion matters pending as on 30-6-2011 at Ahmedabad from the year 2008 and on-wards. At CESTAT, Chennai also, number of difference of opinion mat-ters are pending for considerable period. These difference of opinion matters are either not being referred to the Third Members or such Members are not being posted for hearing the difference of opinion matters.

However, in contrast to the above position, the difference of opinion matter in the case of Kuber Tobacco Products, was given a VIP treatment at the CESTAT, New Delhi and with lightning speed, it was referred to the Third Member, who heard the matter and reserved or-der inspite of numerous objections from the Excise Department.

In the case of Kuber Tobacco Products, the Bench of Mr. Justice R.M.S. Khandeparkar, Hon’ble President of the CESTAT and Shri Rakesh Kumar, Member (Technical) on 21-10-2010 finally heard, a batch of appeals relating to gutkha cases involving more than Rs. 44 crores and orders were reserved on that day. These appeals were listed for Pronouncement of Orders on 17-2-2011, 25-2-2011 and 21-3-2011, but order was not pronounced. As per the copy of the order, the judg-ment in this case was pronounced on 8-4-2011, whereas as per the Cause List of the CESTAT available on the website, this case was not listed for pronouncement of order, on that day. The said Order dated 8-4-2011, recorded a difference of opinion between Mr. Justice R.M.S. Khandeparkar and Shri Rakesh Kumar, Member (Technical).



The copy of this order was certified and issued on 15-4-2011 which happens to be Friday. However, on 20-4-2011, i.e. within five days, (with Saturday and Sunday in between), the Registry put up a note to the President for referring this difference of opinion matter to the Third Member and Mr. Justice R.M.S. Khandeparkar on 29-4-2011, nominated Shri M.V. Ravindran of Bangalore Bench as the Third Mem-ber to resolve this difference of opinion at New Delhi even though other Technical/Judicial Members were readily available at New Delhi. The Hon’ble President also ordered for hearing of the matter on 12-5-2011.

On 12-5-2011, both sides submitted that the reference to the Third Member is ambiguous inasmuch as no point or points of differ-ence between the Members have been formulated for resolution by the Third Member and the differing Bench in its order has merely indicated that there is a difference of opinion, but point of difference had not been formulated. In view of the Gujarat High Court decision in the case of Colourtex v. UOI [2006 (198) E.L.T. 169], the reference being infruc-tuous, was returned for formulation of points of difference. The Third Member, Shri M.V. Ravindran by order dated 12-5-2011 directed the Registry to place the matter before the President and adjourned the matter to 16-6-2011.

Once the reference being infructuous, is returned by the Third Member, he becomes functus officio and cannot direct the President or the Division Bench to formulate and return the reference to him and fix next date of hearing. Therefore, the order dated 12-5-2011 is not valid to this extent. Moreover, the Third Member by fixing next date of hear-ing cannot command either the President or the Division Bench to re-turn the reference within a particular time and date. However, the point of difference was formulated by the Members of the Division Bench by an order which bears no date.

The Registry put up a note dated 10-6-2011, to the Hon’ble Pres-ident for constitution of the difference of opinion Bench for 16-6-2011, in view of the Third Member order dated 12-5-2011. But the Hon’ble President without assigning any reasons directed for listing the matter on 22-6-2011 instead of 16-6-2011. It was improper and irregular for the President to change the date of hearing in a matter which has been fixed by a judicial order and matter is not under his jurisdiction. More-over, he was an interested party in as much as the third Member was hearing his difference of opinion. Shri M.V. Ravindran was available at New Delhi on 16-6-2011, therefore, there was no apparent reason for changing the date of hearing.

On 22-6-2011, Department sought adjournment for 2 months for engaging a Senior Law Officer, but matter was adjourned to 14-7-2011 giving just 3 weeks time. On 14-7-2011, the CDR appeared on behalf of the Department and requested for 4 weeks time as the Senior Law Offi-cer is not available, he also submitted that, the Department has initially sought adjournment for 8 weeks time and they were given less than 4 weeks. The request for adjournment was declined and thereafter, the



matter was heard. Department raised another objection that the differ-ence of opinion is still not competent, as per the requirement of the Customs Act, this objection was also overruled.

Initially, this difference of opinion matter was listed for only 14th and 15th July 2011, but it was further heard on 18lh, 19th and 20th July 2011 and orders were reserved. On 18th and 19th July 2011, this matter was heard by abandoning the regular Excise Bench and ad-journing the 93 listed matters without any hearing or granting further date. Thus, just for hearing one difference of opinion matter, the Regu-lar Bench was abandoned and 93 matters were ignored, causing incon-venience and harassment to the parties and the Departmental Repre-sentatives. Chief Departmental Representative has already lodged a strong protest for such sudden cancellation of Benches.

The above facts show that in the case of Kuber Tobacco Prod-ucts, the CESTAT has taken undue interest in as much as within 5 days of the issue of the difference of opinion order, a proposal for nominat-ing a third Member was mooted and within 9 days, the Member was nominated and first hearing was held within 15 days. The matter was fi-nally heard on day to day basis in July 2011 by abandoning regular Divi-sion Benches and adjourning 93 cases without hearing and this was done by oral orders of the President, while he was on LTC in Goa.

The request of the Department for 8 weeks time for getting the services of Senior Law Officer, was not acceded to and the Hon’ble Third Member has repeatedly observed in the Court that he cannot come again and again from Bangalore, for hearing this case. This indi-cates that the nomination of a outstation third Member can affect the cause of justice as “Justice hurried is Justice buried”.

The difference of opinion matter in the case of Kuber Tobacco Products has been given special treatment at the CESTAT while other difference of opinion cases pending since 2008 have been ignored, but why? Merely because the difference of opinion in the case of Kuber To-bacco involved the Hon’ble President himself as a Member of the Divi-sion Bench, but that does not confer any privilege to it because the President is only first among equals. Equity and fair play requires that CESTAT should hear cases according to chronological or-der and not at its’ whims and fancies.

Conclusion :

The CESTAT in a way, is the nerve-centre of our economy as it not only deals with appeals aggregating thousand of crores of rupees but also decides on legality of measures like anti-dumping duty which safeguard our domestic industry from hostile global forces where some of the MNCs are more powerful than even the Governments of small nations. Thus, CESTAT is a strategic institution for economic security of our country. Slowly and quietly, forces inimical to our economic sovereignty are intruding in the CESTAT and we should not confuse this as mere corruption as risk from them is much larger and greater. Our stress on the existence of corruption in the CESTAT is to prompt



the authorities to initiate action so that such inimical forces, who uses corruption as mask are also taken care of. A few cases analyzed above are only by way of illustration, otherwise, the situation in the CESTAT is far far more worst. We have limitation to write on the subject, but some of the recent happenings in the CESTAT are ringing bells of cau-tion. The situation in CESTAT is indeed alarming and it is on the verge of drowning.

The effect of the cleansing of the CESTAT, undertaken in the year 2008, by the joint operation of the Ministry of Finance and the then Hon’ble President of CETAT, Mr. Justice S.N. Jha has faded away and the network of undesirable elements has become well-entrenched and is attempting to regain complete control of the CESTAT.

To arrest the ongoings in the CESTAT particularly the misuse of public funds, and handling of cases on considerations other than legal, needs to be referred for investigation by an independent agency like C.B.I and the C.A.G. There is also need for fixation of responsibility and taking disciplinary actions against those who are failing in duties, mis-using Government funds or indulging in corrupt practices.

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Editorial - 8th Aug ELT Issue