Appeal to Appellate Tribunal – Third Member – Formulation point of differences and thereafter to decide: [Customs Act. 1962 Section 129 C(5)]

The questions of law that arose in this tax appeal was, can any order be passed by a majority, which includes the third member, when the third member admittedly holds that:

“I find that no specific point of difference has been placed before me. It appears from ‘DIFFERENCE OF OPINION’ framed by the Regular Bench that I have to concur with one of the member”

The facts are not disputed that there was difference of opinion between two learned members of the Division Bench. In view of section 129C(5) of the Customs Act, 1962 in case of difference of opinion between two members of the tribunal, the point of difference of opinion was required to be stated by the members and thereafter the matter was to be decided by a third member. The opinion of the third member would form part of the majority decision. In the facts of the present case, when the learned third member of the tribunal before whom the matter went, the differing member had not framed the point of difference of opinion. When the matter was being heard by learned third member, in his judgment, he recorded that no specific point of difference has been placed before him.

Once the learned third member found that point of difference of opinion has not been formulated by the two members of the Bench then the learned third member was required to send the matter back to the Division Bench for formulating the point of difference of opinion and only after the point of difference of opinion was formulated, decide that question. The learned third member could not say that though difference of opinion has not been framed, he has to agree or disagree with the member and accordingly he has agreed with the judicial member. The approach of the learned third member was not correct in law and he was required to send the matter back to the Bench of the two members who had differed, for formulation of the point of difference of opinion afresh so that question can be considered and decided by the learned third member.

A Division Bench of this Court in Colourtex vs. Union of India [2006 (198) ELT 169 (Guj.)] has held that exact difference has to be formulated by members of the Division Bench of the Tribunal and it is not open to them to formulate a question as to whether the appeal is to be rejected or remanded for a fresh decision for determination of duty, confiscation and penalty etc. In the present case, the question formulated by the Division Bench does not specify the requirement of s/s. (5) of section 129C of the Act. Therefore, the order passed by learned third member as well as the difference of opinion expressed, generally, by differing members without precise formulation of the point of difference cannot be entertained. The appeal was allowed. The matter was remanded to the differing members of the Tribunal to formulate point of difference in a manner required under the law and thereafter refer the matter to learned third member for decision.