Lack of Observations in Appellate Order indicates Non-Application of Mind: Bombay HC remands Excise Matter to CESTAT [Read Order]

A Division Bench of the Bombay High Court quashed an order by the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) that rejected an application by HDFC Bank to rectify a mistake, for being non-speaking. The Petitioner-HDFC Bank impugned the order dated 5th December 2019, which was passed by the Customs Excise and Service Tax Appellate Tribunal by which, the application that was made by petitioner under Section 35C(2) of the Central Excise Act, 1944 came to be rejected. The said application had been filed by petitioner being aggrieved by order dated 13th September 2019 passed by the Tribunal. Various grounds were raised in the application, the primary one being that petitioner’s case is squarely covered by the judgment given by a co-ordinate bench of the Hon’ble Chennai Tribunal in the case of IndusInd Bank Ltd. Vs. Commissioner of Service Tax, Chennai 1 where the Tribunal while allowing the appeal held that the discount received by bank from automobile dealers cannot be treated as a consideration for service. It was submitted that petitioner’s case will be squarely covered by IndusInd Bank Ltd. ( Supra ) where the Tribunal held that no service provider receiver relationship between the bank and vehicle dealer and therefore, the bank cannot be said to have provided any service to the vehicle dealer. According to petitioner, though this decision of the Chennai Tribunal was brought to the notice of the Hon’ble Tribunal during the course of personal hearing as well as by way of additional written submissions, there is only reference in the appeal order wherein merely arguments put forth by counsel have been briefly reproduced and the Tribunal has not provided any observation, findings or comments on the aforesaid decision. According to the petitioner, this constitutes a mistake apparent from record. The bench noted that, “While rejecting the application, the Tribunal not only has gone into the merits of the case but the stand of the Tribunal was irrelevant facts and arguments need not be included in the order, and those which are not relevant for arriving at the decision should be avoided and also decision need not be loaded with unnecessary information and legal knowledge of the author of the judgment.” According to the Tribunal the issue was considered by the various benches of tribunal in various decisions rendered much prior to the decision in IndusInd Bank Ltd. and not a single bench has taken a contrary view. At the same time, the decision in the case of IndusInd Bank Ltd. was rendered even without taking note of any of the decisions rendered earlier by the benches of co-equal strength and such a decision cannot be but a decision rendered per incuriam. The bench noted that, “What is quite glaring is that the Tribunal has not bothered to list which are those matters prior to IndusInd Bank Ltd. ( Supra ), where a contrary view has been taken and which are those matters which have not been considered in the IndusInd Bank Ltd. ( Supra ). In our view, it is nothing but a bald observation made without details. Apart from mere assertion, there is no mention in the impugned order of any decision of the Appellate Tribunal, which has taken a contrary view.” It was thus remarked by the Division Bench of Justices K R Shriram and Jitendra Jain that “It is settled law that the decision of judicial authority should give proper reasons for arriving at a particular conclusion.” It was added that the order how so ever brief, should indicate an application of mind, all the more when the same could be further challenged. It was thus held that, “ In the circumstances, in our view, the impugned order passed by the Tribunal on 5th December 2019 had to be quashed and set aside and the matter was remanded to the Tribunal for de novo consideration. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates