Customs, Excise and Gold Tribunal - Delhi
Ion Exchange (I) Ltd. vs Collector Of Central Excise on 14 May, 1991
Equivalent citations: 1991ECR661(TRI.-DELHI), 1991(56)ELT865(TRI-DEL)
ORDER
Harish Chander, Vice President
1. The appellants have filed an appeal being aggrieved by the order passed by the Collector of Central Excise, Bombay. The said appeal was received on 21-3-1.991 simultaneously a stay application duly supported with an affidavit was also filed. The learned Advocate, Shri Dave has appeared on behalf of the appellants. He pleaded that in the matter before the Tribunal there is no demand of duty and no penalty has been imposed. The Collector in the impugned order has seized the goods lying in the premises of M/s. ION Exchange (I) Ltd. provisionally and had released the same on execution of B-II bond and security of Rs. 2 lakhs. He argued that the Collector had given an option to redeem the goods which had already been released on payment of Rs. 2 lakhs as fine in lieu of confiscation. He pleaded that the sum of Rs. 2 lakhs which were in the form of bank guarantee has also been appropriated and the balance amount of Rs. 22 lakhs the applicants has been desired by the Collector vide his letter dated 5-2-1991 to deposit Rs. 22 lakhs by a crossed cheque drawn in favour of CCE, Bombay-I and deposit the same by TR6 challan in the nominated Bank of this Collectorate and produce the proof of payment within (en days of receipt of this letter. In support of his arguments Shri Dave cited two decisions of the Tribunal in the ease of M/s. Grauer & Well (I) Ltd. v. CCE, Baroda [1986 (25) ELT 338 (Tribunal)] and M/s. Mazagon Docks Ltd. v. Collector of Customs, Bangalore 1990 (26) ECC 227 (SB)]. Shri Dave, learned Advocate pleaded that Tribunal should have exercised the inherent power otherwise the applicants will suffer the inrecoverable loss. Shri M. S. Arora, learned JDR has opposed the grant of stay. He stated that while disposing of the earlier appeal the decisions of the High Court which are in favour of the Revenue was not cited before the Tribunal. He relied on the decision in M/s Satyapal v. CCE, Chandigarh reported in 1987 (27) ELT 107. He argued that the Tribunal while disposing of the matter had taken into consideration the decision of Punjab and Haryana High Court, Bombay High Court & Madras High Court. He has pleaded that it is not a fit case where the Tribunal should exercise its inherenl power.
2. We have heard both the sides and have gone through the facts and circumstances of the case. We have perused the order-in-original. The operative part of the impugned order is reproduced below :-
"I hereby confiscate the said seized goods lying in the premises of Ion Exchange provisionally released on the basis of execution of B-11 Bond by them and security of Rs. 2 lakhs provided by them and these goods have not been produced by them. I, therefore, order their confiscation under Rule 173Q ibid. I however give them an option to pay redemption fine of Rs. 24 lakhs in lieu of confiscation. Since the goods have been released provisionally the security of Rs. 2 lakhs executed for release is appropriated against payment of redemption fine. The balance amount of Rs. 22 lakhs is to be recovered for exercising redemption fine. In addition Central Excise duly at the appropriate rate is to be paid on these goods."
A simple perusal of the same shows that the Collector had released the goods provisionally and he has imposed a fine in lieu of confiscation of Rs. 22 lakhs.
3. While disposing of the appeal in the case of Crauer & Well (I) Ltd. v. CCE, Baroda the Tribunal has observed as follows :-
"The last point remaining to be considered is Shri Narasimhan's contention that in terms of the B- 11 bond executed by the appellants in order to get the goods provisionally released, they should have been asked to produce the goods before the adjudicating authority. This was, however, not done. The bond amount was ordered by the Gujarat High Court to be returned to the appellants. The goods had already been released provisionally. Nothing was, therefore, available to be confiscated by the Collector. Shri Narasimhan, therefore, submitted that there could be no fine in lieu of confiscation. The only way the Collector could have gone about was to enforce the bond in the Court of Law.
We are inclined to agree with Shri Narasimhan. Once the goods are released provisionally against a bond and the goods are not physically available for confiscation, we fail to see how the Collector could have confiscated the goods and given an option to the appellants to pay fine in lieu of confiscation to redeem the goods. The proper course would have been to enforce the bond for breach of its provisions either by forfeiting the bond amount or by enforcing the terms of the bond in a Court of Law. We, therefore, set aside the order of confiscation and imposition of fine in lieu of confiscation."
4. In the matter before us the applicants is the purchaser of the goods from Fellowship of Physically handicapped, Bombay. The goods have already been released provisionally. The judgment in the case of Satyapal v. CCE reported in 1987 (27) ELT 107 does not help the respondent as the facts are different. While releasing the goods on execution of B- 11 bond, the Revenue authorities should have taken the necessary precaution to safeguard the interest of the Revenue. Since the Revenue authorities has desired the applicants to deposit Rs. 22 lakhs after releasing Rs. 22 lakhs on account of bank guarantee we feel that it is a fit case where the Tribunal should exercise its inherent power in terms of Supreme Court judgment in the case of Income Tax Officer, Cannanore v. M. K. Mohammed Kunhi [AIR 1969 SC 430]. Paras 4, 8 and 9 from the said judgment are reproduced below :-
"4. There can be no manner of doubt that by the provisions of the Act or the Income-tax Appellate Tribunal Rules, 1963 powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from as assessee. At the same time it is significant that under Section 220(6) the power of stay by treating the assessee as not being in default during the pendency of an appeal has been given to the Income-tax Officer only when an appeal has been presented under Section 246 which will be to the Appellate Assistant Commissioner and not to the Appellate Tribunal. There is no provision in Section 220 under which the Income-tax Officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax. It may be that under Section 225 notwithstanding that a certificate has been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to penalty) the Income-tax Officer may grant time for the payment of the tax. In this manner he can probably keep on granting extensions until the disposal of the appeal by the Tribunal. It may also be that as a matter of practice prevailing in the department the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers can give the necessary relief of staying recovery of the assessee but that can hardly be put at par with a statutory power as is contained in Section 220(6) which is confined only to the stage of pendency of an appeal before the Appellate Assistant Commissioner. The argument advanced on behalf of the appellant before us that in the absence of any express provisions in Sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal it must be held that no such power can be exercised by the Tribunal, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers such a power on the Income-tax lief to an assessee. The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the Appellate Tribunal. Indeed the Tribunal has been given very wide powers under Section 254(1) for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Income-tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay of recovery the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the legislature should have left the entire mailer to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland Statutory Construction, Third Edition, Articles 5401 and 5402). The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective. In Domat's Civil Law, Cushing's Edition, Vol. 1 at page 88, it has been stated :
''It is the duty of the Judges to apply the laws, not only to what appears to be regulated by their express dispositions but to all the cases where a just application of them may be made, and which appear to be comprehended either within the consequences that may be gathered from it."
Maxwell on Interpretation of Statutes, Eleventh Edition contains a statement at p. 350 that "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. Cui jurisdictio data est, ea quoqe concessa esse vindenture, sine quibus jurisdictio explicari non potuit." An instance is given based on Ex Pane, Marin, (1879) 4 QBD 212 at p. 491 that "where an inferior court is empowered to grant an injunction, the power of punishing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced."
"8. Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidential or ancillary to its appellate jurisdiction. This is particularly so when Section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carriers with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory.
9. A certain apprehension may legitimately arise in the minds of the authorities administering the Act that if the Appellate Tribunals proceed to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course the revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunals. It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions and the stay will be granted in most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal."
5. We have also looked into the merits of the case. Prima facie the applicants have a good case on merits. In view of the above discussion we feel that it is a fit case where the stay should be granted. Accordingly, we stay the impugned order in respect of sub-para (5) of para 14 of the order passed by the Collector of Central Excise, Bom-bay-I, and further order that during the pendency of the appeal the Revenue shall not pursue the recovery proceedings in the manner mentioned in their letter dated 5-2-1991. However, we are making it clear that if any other remedy is available to the revenue it is open to the Revenue to enforce B- 11 bond, the Revenue is at literty to do the same.