Customs, Excise and Gold Tribunal - Delhi
Dhampur Sugar Mills Co. Ltd. vs Collector Of C. Ex. on 4 August, 1998
Equivalent citations: 1999(108)ELT498(TRI-DEL)
ORDER A.C.C. Unni, Member (J)
1. This is an appeal against the Order-in-Appeal, dated 31-5-1993 passed by the Collector of Central Excise (Appeals), New Delhi confirming the order of the Assistant Collector.
2. Briefly, the facts leading to the present appeal are :
By an order of the Hon'ble High Court, Allahabad, dated 21-5-1991, a direction was given to the Superintendent, Central Excise, Moradabad, to determine the benefit to which the petitioner is entitled according to certain orders of the Supreme Court and the Collector (Appeals), as the case may be, with respect to three sugar years and communicate his orders to the present appellant. The Hon'ble High Court's order contained a further direction as follows:
"The Counsel for the petitioner says that he has also claimed interest. This plea, if raised before the Superintendent, Central Excise, may also be dealt with by him according to law".
Persuant to the said direction of the Hon'ble High Court, the Superintendent, Central Excise, by order, dated 23-9-1991 allowed interest at the rate of 18% on the account claimed by the Department. Against the said order, the Assistant Collector filed an appeal before the Collector (Appeals), Ghaziabad. The Collector of Central Excise (Appeals), New Delhi heard the appeal in his capacity as Collector of Customs & Central Excise (Appeals), Meerut and Ghaziabad in addition to his duties as Collector of Central Excise (Appeals), Delhi as per Office Order No. 27/93 issued by the Govt. of India, Ministry of Finance, Department of Revenue. The matter relates to rebate claimed by Dhampur Sugar Mills Ltd. for three sugar years 1997-98,1986-87 and 1987-88. The Hon'ble High Court, Allahabad, on a Writ Petition filed by the Dhampur Sugar Mills directed by order, dated 21-5-1991, the Superintendent to determine the amount of benefit to which the mills would be entitled. Further it was also observed that if a claim for interest was raised before the Superintendent, Central Excise, he may deal with it according to law, as referred to in the extract of the Hon'ble High Court's order reproduced above.
3. In the Cross Objection filed by the Dhampur Sugar Mills Ltd. before the Collector (Appeals), it was contended that the order of the Superintendent was not a decision of order under the provisions of the Central Excise Act but a decision taken by him on the direction of the High Court. It was further contended that in terms of Section 35E (2), the direction issued by the Collector should be to the authority who passed the order. Since in the instant case, the Collector had issued the direction, dated 11-12-1991 under Section 35E(2) was to the Assistant Collector, Central Excise, Moradabad and not to the Range Superintendent, who passed the order granting interest the direction of the Collector was illegal.
4. The Collector by the impugned order held that the High Court had not passed any direction on the grant of interest. It had only directed that a request if made, may be examined by the Superintendent of Central Excise according to law. The Superintendent was, therefore, required to examine the plea of interest as per the provisions of law in accordance with the power vested in him, if any, for grant of such interest. Ld. Collector held that it cannot be claimed that the High Court had allowed the interest and the Superintendent was only directed to compute the quantity of interest. The legality of the question of interest was also required to be examined by the Superintendent as per the provisions of Central Excise law. He held that the objection of the assessee that the order passed by the Superintendent on the question of interest is not an order passed under the provisions of the Central Excise Law was not correct. On the other point, that the direction of the Collector under Section 35E(2) would not have been passed to the Assistant Collector when the order was passed by the Superintendent, Collector (Appeals) observed that Section 35E(2) empowered Collector to pass direction to the Adjudicating Authority subordinates to him whose decision or order has been found to be not legal or proper. Further as per the provisions of Section 35E(4), the application (to be treated as an Appeal) has to be filed by the Adjudicating Authority or Authorised Officer. The use of the expression "authorised officer" in Section 35E(4) indicated that the Collector can issue directions and authorise an officer other than the Adjudicating Authority to file an Appeal to the Collector (Appeals) for determination of such points arising out of the decision or order of the Adjudicating Authority subordinate to him whose decision or order has been found not to be legal or proper. A combined reading of Sub-sections (2) of Section 35E showed, according to the Collector (Appeals), that the Collector can pass direction under Sub-section (2) to the Adjudicating Authority. In that event the question of authorising the Adjudicating Authority to file an application under Sub-section (4) would not arise. The Adjudicating Authority acquires the power to file an application by virtue of Sub-section (2) read with Sub-section (4). Since the scheme appeared to provide for authorising any other officer to make an application for the determination of any points arising out of the decision or order of the Adjudicating Authority, it was not necessary that the direction must be passed under Sub-section (2) to the Adjudicating Authority alone.
5. Appearing before us Shri A.N. Haksar, ld. Advocate submitted that Section 35E(2) did not permit authorisation by the Collector in favour of an Assistant Collector to file an appeal against the order/decision of a Superintendent. Therefore, the application/appeal filed by the Assistant Collector on the basis of authorisation given by the Collector purportedly under Section 35E(2) was not maintainable and therefore, the application was not legal and proper and any order passed thereon was not sustainable in law. He drew particular attention to the provisions of Section 35E(2) which authorised the Collector to direct the Adjudicating Authority to apply to the Collector (Appeals) for determination of points arising out of the decision made by the Adjudicating Authority- Since in the instant case the order awarding interest to the present appellant was made by the Superintendent of Central Excise, he was the Adjudicating Authority for purposes of Section 35E(2). Therefore, the Collector, Meerut could have authorised only the Superintendent Range, Dhampur to the Collector (Appeals). Since the person authorised by the Collector to file the appeal was not the Superintendent but the Assistant Collector, the mandatory requirements of Section 35E(2) was not fulfilled and any such application filed by the 'Assistant Collector would be, legally, not authorised. He referred to the decision of the Hon'ble Supreme Court in Collector of Central Excise v. MM. Rubber Co. reported in 1991 (55) E.L.T. 289 (S.C.) in which the Hon'ble Supreme Court had in Paragraphs 5 & 6 held that the direction under Section 35E(2) cari'be only to the very adjudicating authority who passed the adjudication order: As regards the finding of the Collector (Appeals) that the Superintendent could not have passed the order relating to interest since there was no provision for awarding interest by the Central Excise Department at the relevant time, ld. Counsel submitted that the Superintendent was acting on the basis of a direction issued to him by the Hon'ble High Court under Article 226 of the Constitution and not pursuant to any power vested in him as Superintendent of Central Excise. It was, therefore, not correct to hold that since the Superintendent had no power to award any interest, the order passed by him allowing interest to the party was without authority of law as held by Collector (Appeals).
6. Ld. DR Shri Sanjeev Srivastava drew attention to the wording of the order passed by the Hon'ble Allahabad High Court, dated 4-7-1991. He drew attention to the fact that the Hon'ble High Court had not given any direction to the Superintendent to award interest and what the Hon'ble High Court stated in the order was that the Superintendent may deal with claim for interest if it is raised before him "in accordance with law." He also referred to the recent decision of the Tribunal in Collector of Central Excise, Bangalore v. Falcon Tyres Ltd. reported in 1997 (91) E.L.T. 649 (Tribunal) in which it was held that reading the provisions of Section 35E(2) and Section 35E(4), the Collector can direct either the adjudicating officer, or another officer to file the Application.
7. We have considered the submissions made by both the sides. Two questions arise for decision in this appeal. One is whether the direction given by the Collector to Assistant Collector, Moradabad to file an application before the Collector (Appeals) under Section 35E(2) was a legal valid direction and (2) whether the Superintendent while awarding interest by his order, dated 23-4-1991 was acting on authority of the order given by the Hon'ble High Court under Article 226 or whether he was acting within the powers given to him under the Central Excise Act. Section 35E(2) reads as under :
"The Collector of Central Excise may, of his own motion, cnll for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order".
On a careful reading of the provision of Section 35E(2), it is quite clear that the power given to the Collector is to call for and examine the record of any proceeding in which an adjudicating authority subordinate to him had passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and direct "such authority" to apply to the Collector (Appeals) for determination of such points arising out of the decision or order. It is quite clear that Section 35E(2) contemplates only one authority whose orders or decision can be called for and examined by the Collector and that authority can be only an adjudicating authority subordinate to him. After examination of the record, the Collector has to satisfy himself as to the legality or propriety of any such decision or order. Thereafter he has to direct "such authority" to apply to the Collector for determination of such points arising out of the decision or the order as may be satisfied. There is no provision under that sub-section for giving the direction to any other authority to make an application to the Collector (Appeals). In the instant case, we find that though the order was passed by the Superintendent, the direction that was given by the Collector to file an application against their order was to the Assistant Collector and not to the Superintendent. On a plain reading of the provisions of Section 35E(2), therefore, the direction given to the Assistant Collector as in the present case is clearly not permissible under Section 35E(2). We derive support for this view from the Apex Court decision in C.C.E. v. M. Rubber Co. (supra) relied on by ld. Counsel.
8. On the second point that the Superintendent had acted on authority given to him by the Hon'ble High Court under Article 226 of the Constitution and not under the powers given to him under the Central Excise Act, we do not find any material from the Hon'ble High Court's order to support that contention. The Hon'ble High Court's order only stated that -
"This plea if raised before the Superintendent Central Excise, may also be dealt with by him according to law".
The Hon'ble High Court had neither allowed the claim of the petitioner for interest nor had directed the Superintendent to award the same. The simple direction given by the Hon'ble High Court was that the Superintendent should deal with any claim for interest in accordance with law. It neither conferred an authority or jurisdiction on the Superintendent beyond what he enjoyed as a creature of the Central Excise Act nor did it allow the awarding of interest which was not in accordance with law. We are, therefore, in agreement with the observations made by the Collector (Appeals) holding that the Superintendent had passed the order without authority of law.
9. Since we have held that the appeal filed by the Assistant Collector before the Collector (Appeals) was not permissible in terms of Section 35E(2), we hold that impugned order passed by the Collector (Appeals) is legally incorrect and unforceable. We allow the appeal on the said ground and set aside the impugned order.