Customs, Excise and Gold Tribunal - Mumbai
Mahindra And Mahindra Ltd. vs Collector Of Central Excise on 8 August, 1983
Equivalent citations: 1983ECR1865D(TRI.-MUMBAI), 1988(33)ELT517(TRI-MUMBAI)
ORDER Harish Chander, Member (J)
1. Mahindra and Mahindra Ltd., International Tractor Division, Akurli Road, Kandivli, Bombay have filed an appeal against Order F.No. V-34A(30)5/82, dated the 4th October, 1982 passed by the Collector of Central Excise, Bombay I under Section 35B(1)(a) of the Central Excises and Salt Act, 1944.
2. Briefly, the facts of the case are that, Motor Industries Co. Ltd., (MICO) had despatched a consignment of motor vehicle parts to M/s. Mahindra and Mahindra Ltd., Bombay, the appellants, through M/s. Okay Transport Corporation, Bangalore for transporting and delivering the goods to the appellants at Bombay. The goods were loaded on lorry No. MHQ 2377. The lorry had left Bangalore on 11-4-1980. The lorry was owned by M/s. Public Roadlines, Bangalore and the lorry owner had informed M/s. Okay Transport Corporation, that the lorry was hijacked near Tumkur on the national highway leading to Bombay. M/s. Okay Transport Corporation had lodged a complaint regarding the hijacking with the nearest Kora Police Station in the jurisdiction of Circle Inspector of Police, Tumkur vide case No. 61/80 under Section 395 of the Indian Penal Code. The hijacked lorry was ultimately traced near Hassan and it was found that a part of the consignment was stolen. The remaining consignments were received and the appellants had sent a report to the suppliers as to the shortage of goods resulted due to hijacking. The goods covered by AR 3 A and GP2 were duly insured for the value of the goods exclusive of Central Excise duty leviable thereon. The goods were sent by MICO under Bond and no duty was paid. The jurisdictional Superintendent of Central Excise raised a demand of Rs. 10,429.92 P. being duty payable on the goods short received. In terms of provisions of Rule 96 of the Central Excise Rules, the appellants had paid the amount under protest. The appellants had filed an application No. ITD/C:. Ex.(C9)/ 80-81, dated the 19th July, 1982 before the Collector of Central Excise Bombay-I, requesting for the remission of duty paid on goods robbed during transport under provisions of Chapter X of Central Excise Rules, 1944. The Learned Collector of Central Excise, Bombay-I, had rejected the request for remission of Central Excise duty with the observation that the case is not covered under Rule 196 of the Central Excise Rules, 1944. Being aggrieved from the aforesaid order, the appellants have come up in appeal before this Court.
3. Shri J.N. Pikale, Senior Executive of the Appellant 'Company has appeared before us and has reiterated the facts of the case stated above. He has stated that these items are to be used in the manufacture of Agricultural tractors falling under Central Excise Item No. 34.2. He has relied on the Notification No. 167/79-C.E., dated 19-3-1979 as amended by Notification No. 187/79-C.E., dated 10-5-1979. Shri Pikale has further submitted that the truck was hijacked and the truck driver and conductor were seriously injured. The Superintendent of Central Excise was also informed and part of the consignment which consisted of Fuel Injuction Pump was lost. He has further submitted that the appellants intentions were clear as the goods received back were duly used. He has submitted that the appellant had applied to the Collector of Central Excise for remission of duty on excisable goods under Rule 192. He has submitted that the appellant's goods are covered by Rule 196 as the goods were lost due to highway robbery and it was an unavoidable accident during transport from the place of procurement to the applicant's premises. The Learned authorised representative has relied on the Judgment of Sorabji and Company Pvt. Ltd. v. The Collector of Customs and Central Excise and Ors. reported in 1980 (6) ELT 57 (Kerala High Court). He has submitted that the satisfaction of the officer is an objective satisfaction for the acts in a quasi-judicial capacity. The Judgment cited by the Authorised representative was under Section 116 of the Customs Act, 1962 and it was held by the Honourable High Court that Section 116 imposes a strict liability upon the person in charge of a vessel to pay the penalty unless he is able to account for the shortage of the short landed cargo to the satisfaction of the Customs authority. The satisfaction of the Officer is an objective satisfaction for he acts in a quasi-judicial capacity when he imposes the penalty. If he unreasonable or irrationally or capriciously fails to satisfy himself, notwithstanding reasonable explanations rendered by the carrier, the penalty under Section 116 ibid cannot be validly imposed. He also relied on the Government of India decision in the case of Dempo Steamship Ltd. - [1980 (6) ELT 373]. He has further submitted that the words 'lost or destroyed' used in Rule 196 of the Central Excise Rules, 1944 should be interpreted liberally in comprehensive sense and not in a narrow sense. He has relied on the Delhi High Court Judgment in the case of Sialkot Industrial Corporation, Meerut v. Union of India and Anr. reported in 1979 (4) ELT (J 329). In the said case the Honourable High Court has decided that the expression 'lost of destroyed', in Section 23 of the Customs Act, 1962 is used in a generic and comprehensive sense and not in a narrow sense. It postulates loss or destruction caused by whatsoever reason, whether theft, accident including pilferage. He has further submitted that in the said case the Supreme Court Judgment has been referred to in the case of East and West Steamship Co. v. S.L. Ramalingam Chettiar reported in AIR 1960 S.C. 1068. He has also referred to Rule 147 of the Central Excise Rules, which deals with the goods lost in the warehouse or lost or destroyed by unavoidable accident, Collector may in his discretion remit the duty due thereon provided that if any goods be so lost or destroyed in a private warehouse, notice thereof shall be given to the officer-in-charge of the warehouse within 48 hours after the discovery of such loss or destruction. Finally, he has also relied on the Judgment of Calcutta High Court in the case of Bavaji and Motibhai v. Inspector of Central Excise and Ors., reported in 1979 (4) E.L.T. (J 282), where the Honourable High Court has held that the word 'accident' in Rule 147 includes 'theft'. Furthermore, the word 'lost' as mentioned in Rule 147 would also include 'theft'. The Learned Authorised Representative has relied on the dictionary meaning of the word 'lost' as per Webster's Third New International Dictionary which has been discussed by the Honourable Delhi High Court in the case of Sialkot Industrial Corporation, Meerut v. Union of India and Anr. reported in 1979 (4) E.L.T. (J 329). Para No. 10 from the said judgment is reproduced as under :
"10. What is the meaning of the word "Lost".
According to the Webster's Third New International Dictionary the word 'loss' means "the act or fact of losing, failure to keep possession, deprivation, theft of property". In the same dictionary, the word 'lost' is defined as meaning 'not made use of, ruined or destroyed physically or morally parted with, no longer possessed, taken away or beyond reach or attainment". According to Law Lexicon, Vol. 2, page 44, the word "loss" has no precise hard and fast meaning. It is a generic and a comprehensive term covering different situations. Loss results when a thing is destroyed. But it also is caused when the owner has been made to part with it although the thing remains intact. In this sense, loss means and implies a deprivation. It is synonymous with damage resulting either in consequence of destructions, deprivation or even depreciation and when a party is dispossessed of a thing, either when it can never be recovered or when it is withheld from him he is deemed to suffer the loss."
4. Shri N.K. Pattekar, the Learned Departmental Representative has submitted on behalf of the Revenue that the Order-in-Appeal dated the 4th October, 1982 was passed by the Collector of Central Excise, Bombay-1, and was communicated to the Appellants on his behalf by the Assistant Collector of Central excise. He has submitted before us that this Order-in-Appeal was passed by the Collector of Central Excise in his capacity as an Executive Authority, and not as an adjudicating authority and hence, the said order is not appealable under Section 35B(1)(a) of the Central Excises and Salt Act, 1944. He has submitted that an order or decision passed by the Collector of Central Excise as an adjudicating authority is appealable to the Appellate Tribunal. He has further submitted that, if at all, the appellant is aggrieved from this order, he should approach the Central Board of Revenue for seeking executive instructions to the Collector. Shri N.K. Pattekar has also drawn our attention to the judgment of this Court passed in E.D. (Bom.) A. No. 28 of 1982, dated the 24th day of February, 1982 in the case of Coats of India Ltd. v. Collector of Central Excise, Bombay-H - [1987 (31) E.L.T. 583]. He has submitted that this Court had held that where an order is of an administrative nature, it is not appealable under Section 35B(1)(a) of the Central Excises and Salt Act, 1944. He has submitted that in view of the earlier judgment of this Bench, the appeal is not maintainable and needs to be dismissed. Without prejudice to the argument on the maintainability of the appeal, on merits, the departmental representative has argued that the dictionary meaning, cited by the appellant's learned authorised representative is not applicable to the word 'accident' used in Rule 196 of the Central Excise Rules, 1944. He has also submitted that in normal life we read newspapers and in the newspaper a theft or robbery is never described as an accident. He has submitted that the 'word' 'accident' should be understood in a restricted manner, and the appellants case is not covered under the heading 'unavoidable accident' as per provisions of Rule 196 of the Central Excise Rules. The Learned Departmental Representative has prayed for the dismissal of the appeal on the preliminary ground of non-maintainability or in the alternative, on the grounds that the word 'unavoidable accident does not cover a case of theft, robbery or hijacking.
5. In reply, the Learned authorised representative on behalf of the appellants has submitted that the word "adjudication" has not been defined in the Central Excises and Salt Act, 1944 or the Customs Act, 1962. However, he stated that the adjudicating authority has been defined in Section 2(a) of the Central Excises and Salt Act, 1944. He has also relied on the meaning of the word adjudication as per Dictionary meaning of Mitra's Legal and Commercial Dictionary, 3rd edition. He has submitted that the word 'adjudication' means to hear, or try to decide judicially. Adjudicating is a judicial decision.
6. Before I consider the submissions made by both the sides present, the matter calls for the examination of a very important issue whether the present appeal filed under Section 35B(1)(a) of the Central Excises and Salt Act, 1944 is maintainable or not. Undoubtedly, the word "adjudication" has not been defined under Central Excises and Salt Act, 1944 nor under the Customs Act, 1962. For arriving at a correct conclusion it is very important to go through the scheme of Central Excises and Salt Act, 1944. Chapter VIA of the Central Excises and Salt Act, 1944 was inserted by Finance Act No. 2 of 1980, by Section 50 of the Finance Act No. 2 of 1980 and this Chapter came into operation from the 11th day of October, 1982, i.e. the day Customs, Excise and Gold (Control) Appellate Tribunal came into existence. Before insertion of Chapter VIA, the dealing Sections as to appeal were Sections 35, 35A and 36(1)(a) of the Central Excises and Salt Act, 1944. The relevant portions of deleted Sections dealing with the appeals are reproduced as under :
"35. Appeals (1) Any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or Rules made thereunder (not being an order passed under Section 35A) may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963, or in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by the Central Government. Such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against :
Provided that no such order in appeal-shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjudged against him in the original order or decision or order."
"35A(1). The Central Board of Excise and Customs, constituted under the Central Board of Revenue Act, 1963 may, of its own motion or otherwise, call for and examine the record of any proceeding in which any decision or order has been passed under this Act, or the rules made thereunder by a Collector of Central Excise (not being a decision or order passed an appeal under Section 35) for the purpose of satisfying itself as to the correctness, legality or propriety of such a decision order and may pass such an order thereon as it thinks fit."
"36(1). The Central Government may on the application of any person aggrieved by any decision or order passed under this Act or the rules made thereunder by any Central Excise officer or by the (Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963) and from which no appeal lies, reverse or modify such decision or order -
(1)(a). Every application under Sub-section (1) shall be accompanied by a fee of rupees one hundred and twenty five)."
7. A simple reading of the above Sections clearly indicates that all the orders and decisions were appealable. Customs, Excise and Gold (Control) Appellate Tribunal has been created to give independent decisions without the interference of the executive. The intention of the legislature does not appear to curb the rights enjoyed by the assessee. For arriving at a correct conclusion it is equally important to study the provisions of relevant Sections relating to appeals, Viz. 35B(1).
"35B. Appeals to the Appellate Tribunal - (1) Any person aggrieved by the following orders may appeal to the Appellate Tribunal against such order -
(a) a decision or order passed by the Collector of Central Excise as an adjudicating authority;
(b) an order passed by the Collector (Appeals) under Section 35A;
(c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 or the Appellate Collector of Central Excise under Section 35, as it stood immediately before the appointed day;
(d) an order passed by the Board of the Collector of Central Excise, either before or after the appointed day, under Section 35A, as it stood immediately before that day;
Provided that the Appellate Tribunal may, in its discretion refuse to admit an appeal in respect of an order referred to in Clause (b) or Clause (c) or Clause (d) where -
(i) In any disputed case other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or
(ii) the amount of fine or penalty determined by such order, does not exceed ten thousand rupees.
8. A simple reading of present Section 35 shows that any person aggrieved by any decision or order passed under this Act by the Central Excise officer lower than the Collector of Central Excise may appeal to the Collector of Central Excise (Appeals) and as per provisions of Section 35B every order passed by the Collector (Appeals) under Section 35A is appealable to the Tribunal. Thus every order or decision passed by the Central Excise Officer lower in rank than the Collector of Central Excise is appealable to the Collector (Appeals) and is further appealable to the Tribunal. Under the provisions of Section 35B(1)(a) any person aggrieved by a decision or order passed by Collector of Central Excise as an adjudicating authority may file an appeal to the Appellate Tribunal. The word 'adjudication' has not been defined in the Act. However, Section 2(a) of the Central Excises and Salt Act, 1944 which deals with the definitions, defines "adjudicating authority" as under :
"Adjudicating authority" means any authority competent to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963, Collector of Central Excise (Appeals) or Appellate Tribunal."
9. A reading of the above Section shows that adjudicating authority means any authority competent to pass any order or decision under this Act. Section 33 of the Central Excise and Salt Act, 1944 relates to power of adjudication. The same is reproduced below :
"Whereby the rules made under this Act anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged :
(a) without limit by a Collector of Central Excise;
(b) upto confiscation of goods not exceeding five hundred rupees in value and imposition of penalty not exceeding two hundred and fifty rupees, by an Assistant Collector of Central Excise;
10. Provided that the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 may, in the case of any officer performing the duties of an Assistant Collector of Central Excise reduce the limits indicated in Clause (b) of this Section and may confer on any officer the powers indicated in Clause (a) or (b) of this Section."
11. A simple reading of Sub-section (a) of Section 2 shows that an adjudicating authority can pass any order or decision under this Act. The intention of the legislature appears that the word adjudicating authority has been used in a wider and popular sense. As per the judgment of the Honourable Supreme Court in the case of Commissioner of Income-Tax v. Taj Mahal Hotel, A.l.R. 1972 S.C. 168 at page 170, where the definition of a word has not been given in an Act, it must be construed in its popular sense if it is a word of everyday use. "Popular sense" means that sense, which people conversant with the subject matter, with which the statute is dealing, would attribute to it. In such a case it is also permissible to refer to dictionaries to find out the general sense in which that word is understood in common parlance. However, in selecting one out of the various meanings of the word, regard must always be had to the context. It was also held by the Honourable Rajasthan High Court in the case of Shitabkhan v. Bar Council of India, A.l.R. 1969 (Raj.) 136 at page 141. The Honourable Punjab High Court had held that, in the case of Hazara Singh v. State of Punjab, A.l.R. 1961 Punjab 34 at page 39 (Full Bench), where a word used in an Act, is capable of various shades of meaning, the particular meaning to be attached must be arrived at by reference to the Scheme of the Act or of the Section in particular taken as a whole.
12. Maxwell who is considered to be an authority on interpretation of Statutes. On the Interpretation of Statutes, 12th Edition in his book has written "I am quite aware, that dictionaries are not to be taken as authoritative exponents of the meanings of the words used in Acts of Parliament, but it is a well-known rule of Courts of law that words should be taken to be used in their ordinary sense, and we are therefore sent for instruction to these books". He has also written that the meaning of a Section may be determined, not so much by reference to other individual provisions of the statute, as by the scheme of the Act regarded in general. He has further opined that the previous legislation may be relevant to the interpretation of later statutes in two ways: (i) the course which legislation on a particular point has followed often provides an indication as to how the Act at present in force should be interpreted, and (ii) light may be thrown on the meaning of a phrase in a statute by reference to a specific phrase in an earlier statute dealing with the same subject matter. Since adjudication has not been defined in the Act, I have to resort to various dictionary meanings :
I. Mozley and Whiteley's Law Dictionary, 8th edition by John B. Saunders defines adjudication as "Adjudication. - 1. The giving of Judgment, a sentence or decree. Thus we say, it was adjudged for the plaintiff etc.
2. An adjudication of bankruptcy, or that AB was adjudicated a bankrupt following the making of a receiving order if no composition was accepted (Bankrupt).
3. By commissioners of Inland Revenue as to amount of stamp duty chargeable upon a document where in case of doubt application has been made to them under Section 12 of the Stamp Act, 1891. A stamp indicating their decision is impressed or affixed. There is an appeal to the High Court."
II. Butterworth's Words and Phrases legally defined volume 2 : D-H : 1969 Edition. Definition of :
"Decision. - Australia. - "I take it that an adjudication or decision of justices is something which is announced but not what is passing in the minds of the justices. It is a decision announced in open Court. That is their decision or adjudication."
III. Judicial Dictionary, 8th edition, 1980, by K.J. Aiyer.
"Adjudication. - The passing of a sentence, Judgment or Decree. It is specially used in bankruptcy law. The Court is said to adjudicate or declare a debtor bankrupt when satisfied that there is reason for so doing (Harms).
- is that diligence (execution of the law) by which the real estate of a debtor is adjudged to belong to his creditors in payment of the debts; and the abbreviate must be recorded in the register of adjudication (Bell's dictionary) - Order. The order of a Court in its insolvency jurisdiction declaring a person insolvent."
IV. Encyclopaedic Law Dictionary, Second edition by Biswas :
"Adjudicate. - Adjudicate means to hear or try and decide judicially."
"Adjudication. - means giving or pronouncing a decision. The term is often used in insolvency proceedings to denote an order by which a debtor is declared an insolvent. See Section 7 of the Provincial Insolvency Act, 1920 and Section 10 of the Presidency Town Insolvency Act, 1909.
The Collector may adjudicate proper duty payable on an instrument on application by any party. See Sections 31 and 32. Indian Stamp Act, 1899."
V. Law Lexicon and Legal Maxims, 2nd edition by Venkataramaiya.
"Adjudication. - The judgment or decision of a Court. The term is principally used in bankruptcy proceedings, the adjudication being the order which declares the debtor to be bankrupt (q.v.) Jowitt's Law Dictionary, 1959 Ed., Vol. I, p- 57."
VI. T.P. Mukherjee's Law Lexicon, vol. I, 1982.
"Adjudication. - giving or pronouncing a judgment or decree. In bankruptcy law, adjudication is the act of the Court declaring a person to be bankrupt. In Scots Law it signifies the 'diligence' by which land is attached in security and payment of debt, or by which a feudal title is made up in a person holding an obligation to convey without a procuratory of resignation or precept sasine. There are thus: (1) the adjudication for debt; (2) the adjudication in security; and (3) adjudication in implement (Bell's Diet.)"
A decision of the Honourable Supreme Court has given the definition of Decision in the case of province of Bombay v. Khushaldas S. Advani, 1950 S.C.R. 621 at page 642 reported in AIR 1950 S.C. 222 at page 229 as :
The word "decision" in common parlance is more or less a neutral expression and it can be used with reference to purely executive acts as well as judicial orders. The mere fact that an executive authority has to decide some thing does not make the decision judicial. It is the manner in which the decision has to be arrived at which makes the difference and the real test is: Is there any duty to decide judicially?
VII. The compact edition of the Oxford English Dictionary, Vol. I. "Adjudicating. - An adjudging and awarding.
He does decrees also an adjudicating of them upon that Account to eternal glory.
2. A sitting in judgment, or pronouncing sentences, upon a claim. Men whose lives were passed in adjudicating on question of civil rights."
"Adjudication. - of action : see adjudicate. The Fr. adjudication 16th c. in Litre, may be the immediate source.
1. The act of adjudicating or adjudging; an awarding or settling by judicial decree.
2. A judicial sentence or award.
3. Decree in bankruptcy.
4. Scotch Law. - An 'attachment of heritable estate as security or in satisfaction of a debt."
In view of the meaning of the word 'adjudication' from various Tribunal, especially, where all the orders are appealable to the dictionaries cited above, and the scheme of the Act, 1 am of the view that the present Order-in-Appeal is an adjudicating order. The word "adjudicating" should be read in a wider and popular sense keeping in view the scheme of the Act. The scheme of the Act prior to insertion of Chapter VIA by the Finance Act No. 2/80 was that every order or decision passed under the Act was appealable to the Collector of Appeals, Board or to the Government of India and subsequently, after the insertion of Chapter VIA, I am of the view that all such orders or decisions are appealable to the Collector (Appeals) as per provisions of Present Section 35 read with Sections 35 and 35B(1)(b). The scheme of the Act before the amendment and after the amendment clearly shows that the intention of the legislature was not to snatch the right of appeal which he was enjoying before the insertion of Chapter VIA of the Finance Act No. 2 of 1980. In an earlier judgment of this Court and I was a party to the same, in the case of Coats (India) Ltd. v. Collector of Central Excise, Bombay-II, in appeal No. ED (Bom.) A. No. 28 of 1982, this Court had held that the order was not an adjudicating order and was not appealable under Section 35B(1)(a) and I had agreed to that, because, the dictionary meaning was not cited by the Learned Counsel for the appellant and while passing the judgment the word "adjudicating" was taken in a very narrow and not in a popular sense. Now, I change my view and hold that the order passed by the Collector of Central Excise in the instant case was passed as an adjudicating authority and he had fully applied his mind while arriving at a decision. I am of the view that definition of 'adjudication' given by John B. Saunders' Law Dictionary 8th edition is correct, which has been cited above.
13. This point had been a subject matter of argument before a larger bench consisting of 5 members provided by Justice Shri F.S. Gill, President of the Tribunal, while deciding Appeal No. ED (Del.) (T) No. 146/82. In this judgment, the detailed discussion on the adjudicating authority is in para 83, of the order. The relevant portion is reproduced as under :
"83. Another pertinent feature to be kept in focus is that Section 35B speaks of orders passed by Collector as an 'adjudicating authority'. The term 'adjudicating authority' has been defined in Section 2(a) of the Act and means 'any authority competent to pass any order or decision under this Act...'. The only reference to adjudication in the Act is in Section 33 but this does not stand by itself, but has reference to the Rules. Thus, on a cumulative reading of the provisions together, it is manifest that definition or order, passed in exercise of the powers, functions or duties as laid down under the Rules are also subject matter of adjudication, as indicated by Section 33 itself."
14. In view of the observations of the larger bench, I am of the opinion that there is no need of referring the same to a larger Bench, as the observations of the larger bench clearly indicate that any Order or decision passed under the Central Excises and Salt Act as well as Central Excise Rules is an order passed by the authority as an adjudicating authority and hence it is appealable.
15. Now coming to the merits, after hearing both the sides, I find that the appellant has duly complied with Chapter X procedure. Appellant's truck was hijacked, the truck driver and conductor were seriously injured and necessary information was duly sent by the Appellants to the Superintendent, Central Excise, and part of the consignment was stolen and the remaining consignments were used by the appellant who had duly paid the duty on the same. There is no dispute on the facts of the case and are admitted by both the sides. The appellants' items fall under Central Excise Tariff Item 34.2 and the appellant is entitled to the benefit of Notification 167/79, under Tariff Item No. 68 as amended by Notification No. 187/79-C.E.,. dated 10-5-1979. Now, the only point to be seen is that whether the goods lost due to theft or robbery are covered by the words "by unavoidable accident", as mentioned in Rule 196 of the Central Excise Rules, 1944, Rule 196(1) is reproduced below :
196. "Duty leviable on excisable goods not duly accounted for. - (1) If any excisable goods obtained under Rule 192 are not duly accounted for as having been used or the purpose and in the manner stated in the application or are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accident during transport from the place of procurement to the applicant's premises or during handling or storage in the premises approved under Rule 192 the applicant shall, on demand by the proper officer, immediately pay the duty leviable on such goods. The concession may at any time be withdrawn by the Collector if a breach of these Rules is committed by the applicant, his agent or any person employed by him. In the event of such a breach, the Collector may also order the forefeiture of the security deposited under Rule 192 and may also confiscate the excisable goods, and all goods manufactured from such goods in store at the factory."
16. The learned Authorised Representative has referred to the Judgement of the High Court in the case of Bavaji and Motibhai v. Inspector of Central Excise and Ors. where the Honourable High Court has held that the word 'accident' in Rule 145 includes 'theft'. Furthermore, the word 'lost' as mentioned in Rule 147 would also include "theft". Rule 147 of the Central Excise Rules, 1944 is reproduced as under :
147. "Power to remit duty on warehoused goods lost or destroyed. - If any goods lodged in a warehouse are lost or destroyed by unavoidable accident, the Collector may in his discretion remit the duty due thereon :
Provided that if any goods be so lost or destroyed in a private warehouse, notice thereof shall be given to the officer-in-charge of the warehouse within forty-eight hours after the discovery of such loss or destruction."
The relevant para No. 13 of the Calcutta High Court Judgment in the case of Bavaji and Motibhai v. Inspector of Central Excise - 1979 (4) E.L.T (J 282), is as under :
"The word accident has been appropriately held by the Board, in their determination dated 28th November, 1972 in Annexure 'F' to include "theft" and furthermore, in my view the word 'lost' as mentioned in the said rule would also include "theft" and as such the application as filed by the said firm, was competent and the same was required to be determined by the proper officer, as the same was also filed within time. It is true that this Rule 147 speaks of remission of duty by the use and exercise of discretionary power by the Collector and is silent about any enquiry."
17. I very respectfully follow the Judgment of the Calcutta High Court and I hold that the appellants' case is fully covered by the said Judgment and the goods lost by the appellants in theft and robbery are fully covered as per the provisions of Rule 196, as goods being lost by unavoidable accident. I hereby direct the Revenue to refund Rs. 10,429.92 P. if paid, to the appellants. In the result the appeal is accepted.
S. Venkatesan, Sr. Vice-President
1. While expressing my agreement with the conclusion reached by my learned brother in his comprehensive and well-reasoned order, I would nevertheless like to add my observations.
2. The facts in this case are not in dispute. However, two important issues are involved. One, which is intrinsic to the case, is the interpretation of the term "accident" in Rule 196 of the Central Excise Rules. The other, which has come up incidentally, is as regards the jurisdiction of the Tribunal to entertain appeals from an order of a Collector which is not relatable to Section 33 of the Central Excises and Salt Act.
3. On the first issue, the appellants have relied on the interpretation given by the Calcutta High Court with reference to Rule 147, which uses the same expression, viz., "unavoidable accident", and in a similar context. The learned representative of the Department could not quote any authority to the contrary. We have, therefore, been guided by the decision of the Calcutta High Court, which would apply to the facts of this case.
4. On the second issue, in learned brother has explained the reasons which have led him to differ from the view earlier taken by the West Regional Bench (of which he was a member) and to hold in effect that under Section 35B(1)(a) of the Central Excises and Salt Act (as amended) an appeal lies to the Tribunal against a decision or order of a Collector of Central Excise as an adjudicating authority not only where the decision or order is relatable to Section 33 ibid but also under any other Section of that Act or the Rules thereunder. I propose to reinforce his reasoning with reference to the provisions relating to the Tribunal, as inserted through the Finance (No. 2) Act, 1980.
5. A direct consequence of the view previously taken by the West Regional Bench in the case of Coats of India Ltd., would be that, where an officer lower than a Collector of Central Excise passes an order or decision on a classification or valuation matter, there is provision for three appeals, the first to the Collector (Appeals), the second to the Tribunal, and the Third to the Supreme Court. Where a Collector of Central Excise passes such an order, there would not be provision for even a single appeal. Considering that (1) Original order or decisions on such matters are passed by Collectors as well as lower authorities, and (2) the normal presumption would be that it is the more important cases which would normally form the subject of orders or decisions of Collectors, it is improbable in the extreme that the assessee (or the department) would be left without any specific remedy of appeal in such cases. This would, however, be the inevitable consequence if a restrictive view is taken of the words "order or decision" as was done by the West Regional Bench in the case of Coats of India Ltd.
6. I, therefore, fully concur in the broader view expressed by my learned brother, relying on certain relevant observations of a five member bench of the Tribunal in the case of S. Kumars Limited, Dewas v. Collector of Central Excise, Indore, - 1983 (13) E.L.T. 1057 and G.S. Industries, Jullundur v. Collector of Central Excise , Chandigarh, - 1983 ECR 855D.
7. In the result, as recorded by my learned brother, the appeal is allowed.