The Bombay high court has pulled up a two-bench central excise tribunal for not adhering to judicial precedents while delivering judgment in a case involving Mercedes Benz India Private Ltd.
A division bench of justice VC Daga and justice KK Tated was hearing last week a petition filed by Mercedes Benz, challenging an order passed by the tribunal in November 2009. According to the petition, the tribunal had ruled against the company, though their case was squarely covered by previous judgments.
Also, a different bench of the tribunal had ruled in favour of the company in a similar case in 2008.
“We are not happy to observe but constrained to say that one must remember that the pursuit of the law, however glamorous it is, has its own limitation on the Bench. In a multi-judge court, the judges are bound by precedents and procedure. They could use their discretion only when there is no declared principle to be found, no rule and no authority,” the judges remarked.
The judgment, dictated by justice Daga, further said: “We hold it to be the duty of the judges of the courts and members of the tribunals to make the law more predictable. The question of law directly arising in the case should not be dealt with apologetic approaches. The law must be made more effective as a guide to behaviour.”
Observing that if the tribunal wanted to take a different view taken earlier by another bench while dealing with identical set of facts, it can refer the case to a larger bench, the high court has now directed a fresh hearing of the appeals filed by Mercedes.
The company was issued show-cause notices alleging that the Road Delivery Charges (RDC) are includible in the assessable value of the vehicles sold to the dealers at the factory gate. The company used to recover the RDC from the dealers by showing the same in the sales invoices separately and paid VAT as applicable on the RDC for sales within the state.
As the Excise department was recovering RDC from the company, the order was challenged in the tribunal. A two-member bench of the tribunal had ruled in favour of the company in 2008, but another bench ruled against the company in 2009, when one more set of petitions was filed.
