Holding

The President of the Customs, Excise and Gold (Control) Appellate Tribunal may refer a case to a larger bench under Section 129‑C, and a two‑member bench may doubt an earlier decision and seek such a reference.

Summary

Paras Laminates imported goods and claimed they fell under tariff item 84.60, but customs classified them under 73.15(2). After losing before the Collector of Customs, the importer appealed to the Customs, Excise and Gold (Control) Appellate Tribunal. A two‑member bench doubted the correctness of an earlier three‑member bench decision in Bakelite Hyam Ltd. and referred the matter to the President, who constituted a five‑member bench. The Delhi High Court set aside both the two‑member bench order and the President’s reference, holding that the bench should have followed the earlier decision. On appeal, the Supreme Court held that Section 129‑C of the Customs Act confers on the President the power to refer cases to larger benches, and that a bench may doubt an earlier decision and seek such a reference. Consequently, the two‑member bench and the President acted within their statutory powers, and the High Court’s judgment was set aside.

Issues considered

Whether Section 129‑C(5) and (6) of the Customs Act, 1962 empower the President of the Tribunal to refer a case to a larger bench when a bench doubts the correctness of an earlier decision.
Whether a two‑member bench must invariably follow an earlier decision of a larger bench and cannot refer the matter to a larger bench.
The scope of incidental and ancillary powers of the Customs, Excise and Gold (Control) Appellate Tribunal.

Legislation cited

Customs Act, 1962s. 129, s. 129-C(5), s. 129-C(6)

Subjects

Customs ActTribunal powersIncidental powersAncillary powersReference to larger benchJudicial disciplineTariff classificationStatutory interpretation

Judgment

UNION OF INDIA AND ANR.
A
v.
PARAS LAMINATES (P) LTD.

AUGUST 17, 1990

[T.K. TIIOMMEN AND K. RAMASWAMY, JJ.] B

Customs Act, 1962: Sections 129-C(5)(6)-5copeof.

c..-. Customs, Excise and Gold (Control) Appellate Tribunal-Bench
.-- ~of two Members-Doubting correctness of a judicial decision of a
Bench of three members of the Tribunal-Reference to President of the
,_ Tribunal for constituting a larger Bench-Constitution of a larger
c
Bench by the President-Whether contrary to judicial Discipline.

The respondent imported certain goods and claimed in its Bills of
- ________ Entry that the imported goods fell under Tariff Item No. 84.60. 'Rte
Customs Authorities rejected the claim by holding that the goods were D
classifiable under Tariff Item No. 73.15(2). The respondents preferred
an appeal before the Collector of Customs which was also dismissed.
Thereafter, the respondent filed a second appeal before the Customs,
Excise and Gold (Control) Appellate Tribunal contending that in view
of the earlier decision of a Bench of three members of the Tribunal in
Bakelite Hylam Ltd. Bombay & Anr. v. Collector of Customs, Bomaby E
·-.., & Anr., [1986] 25 E.L.T. 240 an identical classification ought to have
been adopted by the Customs authorities for identical goods. By its
order dated 22.10.1986 a Bench of two members of the Tribunal stated

-- that they doubted the correctness of the earlier decision of a Bench of
the three members of the Tribunal and they referred the case to the
President of the Tribunal for constitnting a larger Bench. By its order
dated 4.3.1987 the President of the Tribunal referred the case to a
F·
larger Bench of five members.

The respondent filed a writ petition in the High Court challenging
the orders of the Bench of two members and that of the President of the
Tribunal, which struck down both the orders by holding that the Bench G
of two members ought to have followed the earlier decision ol'the larger
Bench of 3 judges and a reference of the case to a still larger Bench was
contrary to judicial precedent and judicial discipline.

,.,_ J_ In appeal to this Court, it was contended on behalf of the Union of
India that Section 129-C of the Customs Act, 1962 empowers the Presi- H

789
790 SUPREME COURT REPORTS [1990] 3 S.C.R.

A dent of the Tribunal to constitute larger Benches to resolve conflicts in
opinion arising between members of a Bench or between Benches of the
Tribunal. The Tribunal has ample powers to regulate its own proce- ·"'
dure, apart from the express provisions of the statute in that behalf.

On behalf of the 'respondent, it was contended that the Trib•mal is
B a creature of the Statute. Its jurisdiction is limited to the specific powers
conferred by the statute. It has no inherent jurisdiction and its powers
are not plenary and are limited to the express provisions contained in
the statute. _ .Jilli
·' ...
Allowing the appeal, this Court,
c HELD: 1. There is no doubt that the Tribunal functions as a
Court within the limits of its jurisdiction. It has all the powers con-
ferred expressly by the statute. Furthermore, being a judicial body, it
has all those incidental and ancillary powers which are necessary to -
make fully effective the express grant of statutory powers. Certain
D powers are recognised as incidental and ancillary, not because they are
inherent in the Tribunal, nor because its jurisdiction is plenary, but
because it is the legislative intent that the power which is expressly
granted in the assigned field of jurisdiction is efficaciously and mean-
ingfully exercised. l794F-G I

E 1.1 Where an Act confers a jurisdiction, it impliedly also grants \
the power of doing all such acts, or employing such means, as are

F
essentially necessary to its execution. [795A]

Maxwell on Interpretation of Statutes, Eleventh edition and
Income Tax Officer, Cannanore v. M.K. Mohammad Kunhi, [1969] 71
ITR 815, referred to.
-
2. It is true that sub-section (5) refers to difference of opinion i
arising amongst members of a Bench in a particular case, and not
specifically where the members of a Bench doubt the correctness of an
earlier decision. However, section 129.C confers power of reference
G npon the President. That power should he construed to be wide enough
to enable the President to make a reference where members of a Bench
find themselves unable to decide a case according to what they percieve
to be the correct law and fact because of an impediment arising from an
earlier decision with which they cannot honestly agree. In such cases, it l
is necessary for the healthy functioning of the Tribunal that the Presi-
H dent should have the requisite authority to refer the case to a larger
U.0.1. v. PARAS LAMINATES 791

Bench. That is a power which is implied in the express grant anthoris- A
. ing the President to constitute Benches of the Tribunal for effective and
/'expeditious discharge ofits functions. [795H; 796A;B]

2.1 It is true that a Bench of two members must not lightly disre-
gard the decision of another Bench of the same Tribunal on an identical
B
question. This is particnlarly true when the earlier decision is rendered
by a larger Bench. The rationale of this rule is the need for continuity,
certainty and predictability in the administration of justice. Persons
-· ~affected by decisions of Tribunals or Courts have a right to expect that
those exercising judicial functions will follow the reason or ground of
the judicial decision in the earlier cases on identical matters. Qassifica-
tion of particular goods adopted in earlier decisions most not ho lightly c
disregarded in subsequent decisions, lest_ such judi~ial inconsistency
should shake public confidence in the administration of justice. It is,
however, equally true that it is vital to the administration of justice that
~-those exercising judicial power must have the necessary freedom to
doubt the correctness of an earlier decision if and when subsequent
D
proceedings bring to light what is perceived by them as an erroneous
decision in the earlier case. In such circumstances, it is but natural and
reasonable and indeed efficacious that the case is referred to a larger
Bench. [7958-E)

2.2 In the instant case, the Bench of two members in their
·--, reasoned order pointed ont what they perceived to be an error of law in E
the earlier decision and stated the points for the President to make a·
reference to a larger Bench. Accordingly the Bench of two members
acted within their power is stating the points of law which required
clarification and the President acted equally within the bounds of his power
in constituting a larger Bench to hear and decide those points. [795E; 796C)
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3955
>, of 1990.

From the Judgment and Order dated 7.12.1989 of the Delhi High
Court in C.W. No. 1060of 1987.
G
Dr. V. Gauri Shanker, C.V. Subba Rao, S. Rajappa and
M. Chandershekharan (N .P.) for the Appellants.

G.L. Sanghi, Raju Ramachandran, Dhruv Mehta and R.K.
Sanghi for the Respondent.
H
792 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

The Judgment of the Court was delivered by
A
THOMMEN, J. Special Leave is granted.

This appeal by the Union of India arises from the Judgment
dated 7.12.1989 of the Delhi High Court in Civil Writ No. 1060 of 1987
B setting aside Orders dated 22.10.1986 and 4.3.1987. The former order
was made by a Bench of two members of the Customs, Excise and
Gold (Control) Appellate Tribunal (hereinafter called the 'Tribunal')
and the latter order was made by the President of the Tribunal. By
their Order dated 22.10.1986, the Bench of two members of the Tri-
bunal stated that they doubted the correctness of an earlier decision of
C a Bench of three members of the Tribunal in Bakelite Hy/am Ltd.
Bombay & Anr. v. Collector of Customs, Bombay & Anr., [ 1986] 25
ELT 240 and directed that the case of the present respondent, Paras
-
Laminates (P) Ltd., be placed before the President of the Tribunal for
referring it to a larger Bench of the Tribunal. The President by his
Order dated 4.3.1987 referred the case to a larger Bench of five
D members. These two orders were struck down by the High Court stating
that the Bench of two members ought to have followed the earlier
decision of the larger Bench of 3 Judges and a reference of the case to a
still larger Bench was contrary to judicial precedent and judicial
discipline.

E In Bakelite Hy/am, (supra) a Bench of three members had held
that the goods in question fell under Tariff Item 84.60 as claimed by
the importer in the Bills of Entry. In the present case, the importer
claimed in its Bills of Entry that the goods imported by it fell under
Tariff Item 84.60. But the customs authorities rejected the contention
of the importer and classified the goods under Tariff Item 73.15(2).
F The importer appealed to the Collector of Customs, but without
success. In its second appeal before the Bench of two members, the f'
importer relied upon the earlier decision in Bakelite Hy/am (supra)
and contended that an identical classification ought to have been
adopted by the Customs Authorities for identical goods. The Bench of
two members, however, referred the case to the President of the Tri-
G bunal for referring the same to a larger Bench. The order of the Bench
of two members and that of the President have been struck down by
the High Court by the impugned judgment for the reasons stated
above.

Mr. V. Gauri Shanker, appearing for the appellant-Union of
H India, submits that section 129-C of the Customs Act, 1962 contains
U.0.1. v. PARAS LAMINATES [THOMMEN, J.] 793

express provisions enabling the President of the Tribunal to constitute
A
>-larger Benches to resolve conflicts in opinion ~rising between
· members of a Bench or between Benches of the Tnbunal. The Tn-
bunal has ample powers to regulate its own procedure, apart from the
express provisions of the statute in that behalf. Counsel contends that
the Tribunal has inherent or incidental or ancillary powers to effec-
tuate the statutory powers expressly granted to it. Counsel submits B
that the statute must be so construed as to make the conferment of
power efficacious and meaningful. To deny the power of a Bench of
,. .- "f-·two members to doubt the correctness of an earlier decision and to
refer the case to the President for being heard by a larger Bench is to
· fetter the jurisdiction expressly vested in the Tribunal and thus stifle
the growth of law evolving from the decisions of the Tribunal exercis-
ing judicial powers like a Court, albeit within the statutory limits of its c
jurisdiction.

Mr. G.L. Sanghi, appearing for the respondent (the importer)
submi!s that the Tribunal is a creature of the statute. Its jurisdiction is
limited to the specific powers conferred by the statute. It has no D
inherent jurisdiction and its powers are not plenary and are limited to
the express provisions contained in the statute. While the powers of a
civil court are plenary and unlimited unless expressly curtailed by
statute, the powers of a tribunal are the result of express grant and
cannot exceed the bounds limited by the constituting statute. In the
Y present case the powers of the Tribunal are expressly specified in the E
Customs Act, 1962 and those powers, counsel says, do not contain any
provision enabling the President to refer a case to a larger Bench
whenever a doubt about an earlier decision is expressed by another
Bench of the same Tribunal. According to Mr. Sanghi, the Bench
should have followed the earlier decision even if the members doubted
its correctness, and should have left it to this Court to correct the F
error, if any.

The Tribunal is constituted by the Central Government under
section 129 of the Act. One of the members of the Tribunal is
appointed by the Central Government as its President. Section 129-C
says that the powers and functions of the Tribunal may be exercised G
and discharged by Benches constituted by the President from amongst
its members. Subject to certain exceptions, a Bench shall consist of
.c one judicial member and one technical member [section 129c(2) ].
Sub-section (5) of section 129-C provides for a reference of a case by
the President in the event of differences in opinion arising amongst
members on any point. This sub-section reads: H
794 SUPREME COURT REPORTS [1990] 3 S.C.R.

"(5) If the members of a Bench differ in opinion on
A any point, the point shall be decided according to the
"'"-.
opinion of the majority, if there is a majority, but if the
members are equally divided, they shall state the point or
points on which they differ and the case shall be referred by
the President for hearing on such point or points by one or
B more of the other members of the Appellate Tribunal, and
such point or points shall be decided according to the
opinion of the majority of the members of the Appellate
Tribunal who have heard the case including those who first : (
heard it:

c Provided that where the members of a Special Bench
are equally divid.ed, the point or points on which they differ
shall be decided by the President."
--
Sub-section (6) Section 129C says that the Tribunal shall have
the power to regulate its own procedure. It reads:
D
"( 6) Subject to the provisions of this Act, the Appel-
late Tribunal shall have power to regulate its own proce-
dure and the procedure of the Benches thereof in all
matters arising out of the exercise of its powers or the
discharge of its functions, including the places at which the
E Benches shall hold their sitting." \

Sub-sections (7) and (8) of this Section provide that the Tribunal shall,
for certain specific purposes, be deemed to be a civil court.

There is no doubt that the Tribunal functions as a court within
F the limits of its jurisdiction. It has all the powers conferred expressly
by the statute. Furthermore, being a judicial body, it has all those
incidental and ancillary powers which are necessary to make fully
effective the express grant of statutory powers. Certain powers are
recognised as incidental and ancillary, not because they are inherent in
the Tribunal, nor because its jurisdiction is plenary, but because it is
G the legislative intent that the power which is expressly granted in the
assigned field of jurisdiction is efficaciously and meaningfully exer-
cised, the powers of the Tribunal are no doubt limited. Its area of
jurisdiction is clearly defined, but within the bounds of its jurisdiction,
it has all the powers expressly and impliedly granted. The implied
l
grant is, of course, limited by the express grant and, therefore, it can
H only be such powers as are truly incidental and ancillary for doing all
-
U.0.1. v. PARAS LAMINATES [THOMMEN, J.I 795

such acts or employing all such means as are reasonably necessary to
make the grant effective. As stated in Maxwell on Interpretation of A
Statutes, (eleventh edition) "where an Act confers a jurisdiction, it
impliedly also grants the power of doing all such acts, or employing
such means, as are essentially necessary to its execution." See also:
Income Tax Officer, Cannanore v. M.K. Mohammed Kunhi, [1969] 71
ITR 815, 819. B

It is true that a Bench of two members must not lightly disregard
~
'y::._
.... the decision of another Bench of the same Tribunal on an identical
question. This is particularly true when the earlier decision is rendered
by a larger Bench. The rationale of this rule is the need for continuity,
certainty and predictability in the administration of justice. Persons
affected by decisions of Tribunals or Courts have a right to expect that c
those exercising judicial functions will follow the reason or ground of
the judicial decision in the earlier cases on identical matters. Classifica-
tion of particular goods adopted in earlier decisions must not be lightly
disregarded in subsequent decisions, lest such judicial inconsistency
should shake public confidence in the administration of justice. It is, D
however, equally true that it is vital to the administration of justice
that those exercising judicial power must have the necessary freedom
to doubt the correctness of an earlier decision if and when subsequent
proceedings being to light what is percieved by them as an erroneous
decision in the earlier case. In such circumstances, it is but natural and
reasonable and indeed efficacious that the case is referred to a larger E
Bench. This is what was done by the Bench of two members who in
their reasoned order pointed out what they perceived to be an error of
law in the earlier decision and stated the points for the President to

•
make a reference to a larger Bench .

That the President has ample power to refer a case to a larger F
Bench is not in doubt in view of sub-section (5) of section 129-C, which
we have set out above. That provision clearly says that in the event of
the members of a Bench differing in opinion on any point, and the
members are equally divided, the case shall be referred to the Presi-
dent for hearing on any such point by one or more of the members of
the Tribunal, and such point shall be decided according to the opinion G
of the majority of the members.

It is true that sub-section (5) refers to d;fference of opinion aris-
ing amongst members of a Bench in a particular case, and not specifi-
cally where the members of a Bench doubt the correctness of an earlier
decision. However, section 129-C confers power of reference upon the H
796 SUPREME COURT REPORTS [1990) 3 S.C.R.

A President. That power should be construed to be wide enough to
enable the President to make a reference where members of a Bench
find themselves unable to decide a case according to 'what they
percieve to be the correct law and fact because of an impediment
arising from an earlier decision with which they cannot honestly agree.
In such cases, it is necessary for the healthy functioning of the Tribunal
B
that the'President should have the requisite authority to refer the case
to a larger Bench. That is a power which is implied in the express grant
authorising the President to constitute Benches of the Tribunal for
effective and expeditious discharge of its functions.

In our view, the Bench of two members acted within their power
C in stating the points of law which required clarification and the Presi-
dent acted equally within the bounds of his power in constituting larger
Bench to hear and decide those points. •
In the circumstances, we set aside the impugned judgment of the
High Court. The appeal is allowed with costs here and in the High
D
Court.

T.N.A. Appeal allowed .

,1
•