Bombay High Court
Twincity Glass Private Ltd. vs Union Of India on 17 March, 1992
Equivalent citations: 1992(3)BOMCR346, (1992)94BOMLR722, 1992(61)ELT440(BOM), 1992(2)MHLJ1256
JUDGMENT K. Sukumaran, J.
1. "Is an Additional Collector of Central Excise, a Collector of Central Excise for the purpose of the Central Excises and Salt Act, 1944", - is the question posed for consideration in the present Writ Petition.
2. The Petitioners, in the course of their dealings, had to encounter the problem to the Excise Department.
3. On the eve of the Republic Day in the year 1989, a consignment of glass tubes which had been taken from the Petitioners' factory was intercepted by the Excise Authorities. According to the department, a physical verification of the consignment disclosed a startling discrepancy between the documents and the actual stock. As against 115 bundles referred to in the documents, the verification revealed 200 bundles of 10 Kgs. each of glass tubes. There was thereafter a physical verification of the entire stock of finished and packed glass tubes kept in the Bonded Store Room (BSR). It was revealed that over and above RG-I book balance, there were 14,427 bundles of 10 Kgs., totally valued at Rs. nine lacs and involving central excise duty of Rs. 3,78,000/-. Hectic activities on the part of the Excise Authorities took place in the wake of such disclosures. In the light of the investigations, the Authorities felt that action under Section 11A(1) of the Act was warranted. The notice Exhibit 'A' was issued, accordingly, on 21-7-1989. The Petitioners replied by Exhibit 'B' of 17-10-1989. For the purpose of the present case, it is unnecessary to refer to the other correspondence exchanged between the Department and the Petitioners. The proceedings ultimately culminated in an order Exhibit 'G', passed on 25-9-1991. It has resulted in an order which has cast a liability on the petitioners in the form of additional duty. Exhibit 'G' is the order passed by the Additional Collector on 25-9-1991.
4. The jurisdiction of the Additional Collector to act with respect to the proceedings, is questioned on a fundamental aspect; it is attacked on other subordinate grounds as well.
5. A statutory appeal lies against the order of the Addl. Collector on factual and legal aspects. This Court will not, ordinarily, investigate such contentions in proceedings under Article 226 of the Constitution in view of the availability of alternate remedy.
6. The question posed at the outset, however, is concerning the very competence of the Additional Collector to function as an authority in the proceedings under Section 11A. That is a question, which, according to Counsel for the Petitioners, calls for an authoritative and final decision by a Constitutional Court. This is a particularly so, in view of the fact that the Tribunal, in similar cases, has already taken a view on the precise question but adverse to the stand of the Petitioners.
7. We shall approach the question, initially, looking direct into the statutory scheme involving the interpretation of the relevant provisions.
8. Section 11A enables the Collector to initiate action in the contingencies covered by that Section. The term 'Collector' is not defined in the Section.
9. The enactment, however, by an enabling provision, empowers the Government to frame Rules to carry out the purposes of the Act. Rules have been framed invoking that enabling provision.
10. Initially, Section 11A referred to an Assistant Collector of Central Excise to perform the duties covered by that Section. It was apparently felt, in the light of the working of the provision, than an amendment was needed. The objects and reasons for that amendment have been indicated in the Bill when it was introduced on 15-12-1985. The relevant reads :
"2. Opportunity is also being availed of to make certain other amendments in the Act in the light of the experience gained in the implementation of the Act. The main amendments proposed are as follows :
(a) show cause notice in regard to duty of excise short-levied of short-paid etc., by reason of fraud, collusion or any wilful mis-statement of suppression of facts should be issued, and such cases decided, by the Collector of Central Excise instead of the Assistant Collector of Central Excise as at present;"
11. In the Rules framed in exercise of that rule-making power, a definition of 'Collector' has been furnished by rule making authority. That definition brings in the Additional Collector also within the ambit of the term 'Collector of Central Excise'.
12. We shall briefly allude to some general principles which could usefully be borne in mind.
Many legislative measures may not have been exhaustive enumeration of various provisions to cover all details and to meet all contingencies. This is particularly so in a fiscal statute which has application in relation to wide range of activities and a large array of commodities. Many matters are, therefore, to be left for the rules to be framed from time to time. This modern Parliamentary practice, and legislative modality, cannot be overlooked in the present context.
13. If the rules are framed, they could generally be treated as part of the Act itself. When such an effect to what was initially a subordinate legislation, the subordinate legislation virtually gets the status of a statutory provision. Once that stage is reached, no one shall permit the imagination to be boggled or the effect to be under-rated. The Rules are to be placed before the Parliament. Parliamentary vigil is, thus, assured in respect of such exercise of subordinate legislation. If not otherwise disturbed, the Rule would then have the efficacy and force almost in the same measure as the statutory provision in the Act itself. In such a situation, the Rule will almost become an integral part of enactment itself. If the Rule be not in conflict with the provision of the statute, then, there could not be ordinarily any interpretational problem. A problem may arise if the provision in the enactment amended later, creates an atmosphere of confrontation. Even in such a situation, the helpful aid of harmonious interpretation should be resorted to, so as to avoid head-on collusion and bring about a practicable pragmatic working method in relation to the different statutory provisions.
14. In the present case, the Rules did, what could have been done and the statute could have done. When the exercise was over, the resultant provision has gained effect and efficacy as if in the main enactment itself.
15. Counsel had a submission that under the Rule there was only a limited role and play for the 'Additional Collector' as attempted by the definition of 'Collector'. He stressed the opening words "for the purpose of these Rules". It is submitted that if the definition was only for the purpose of the Rules, such an Additional Collector would not be treated as a 'Collector' for the purposes of the Act. The Additional Collector who could have the cap of Collector while in the field of Rules, would be bare-headed once he enters the enclosure of the Act - contended Counsel.
16. The argument according to us, is fallacious. If, for the purpose of the Rules, an Addl. Collector is to be equated as a Collector, that equation would endure even for the purpose of the Act; for, as noted earlier, the Rules are framed only to carry out the provisions of the Act. In other words, when the Rules are having a distinct and objective, viz., for the purpose of carrying out the provisions of the Act, that facet of the exercise should also be treated as for the purpose of carrying out the purposes of the Act. The Addl. Collector occupying the seat of the Collector by virtue of the help and push of the statutory rule created for carrying out the mission of the Act, is a person equipped with the authority, might and right of the full-fledged Collector seated there in his own right. There is no room for a half way horse in such a situation. In that view of the matter, we hold that the Addl. Collector has the same powers as the Collector and that his responsibility and his duties are co-existent with those of the Collector of Central Excise as visualised under the Act. The general concept of an Additional functionary not being a subordinate functionary has an enduring recognition in general and regular legal proceedings. That accounts for an artificial definition and deeming provision when in the limited contingencies a differential treatment is desired. [See the special provision by which the Court or the Addl. District Judge is deemed to be a subordinate Court only for the purpose of Section 24 (dealing with transfer) of the Code of Civil Procedure.
17. Now, in similar situations the question has arisen earlier under the Income-tax Act. The Courts have resolved the controversy holding that the Additional Commissioner wields the same authority and shoulders the same responsibility as the Commissioner. The decision of the Gauhati High Court (to which one of us, Saraf, J. is a party) come to the same conclusion. [See Anath Bandhu Saha v. Utpal Deb Barma, (1989) 1 Gauhati Law Reports, 332.] The decisions in M/s. Hemraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise & Customs, Surat & Others, 1978 (2) E.L.T. (J 350); Hindustan Steel Ltd. v. State of Orissa, 1978 (2) E.L.T. (J 159) have taken a view which accords with the conclusion which we have reached. A reference to other provisions would convey confirming messages of the interpretation we have given. Thus, for example, the provision indicating the appellate forum, would easily fit in with a situation when an affected party is enabled to appeal against all erroneous orders, whether they be passed by the Collector or the Addl. Collector. It is not easy to reconcile with a situation that the Additional Collector is a show piece or mere ornament or just another person to receive a regular salary and serving no purpose at all.
18. We hold that the light of the above discussions, the contention of the Petitioners is without substance. The Writ Petition is accordingly dismissed.