Customs, Excise and Gold Tribunal - Delhi
Nandi Metal Rolling Mills vs Collector Of Central Excise on 20 March, 1992
Equivalent citations: 1992(60)ELT322(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. In this Misc. application, the applicant-assessee had made out additional grounds and has prayed that the same should be permitted to be raised in the grounds of appeal. The grounds urged are A to F in the Misc. application and the same are incorporated below -
(A) For that, in the facts and circumstances of the case, no notice to show cause could have been issued by the respondent or any such notice adjudicated upon in respect of goods seized beyond the territorial limits of his jurisdiction.
(B) For that, notice to show cause dated 7-1-1988 could not have been issued at all, when for a fact, a notice dated 21-12-1987 was already issued for adjudication in a different territorial jurisdiction and that notice was neither withdrawn nor superseded.
(C) For that, seizure in the facts and circumstances of the case, was not effected by the proper officer and hence illegal.
(D) For that, the goods illegally seized, should in the circumstances, have been returned unconditionally to the applicant (E) For that, the applicant could not have been required to furnish any security for the provisional release of goods seized illegally and without jurisdiction.
(F) For that, the respondent could not have purported to confiscate the goods in absentia or impose a fine in lieu thereof or proceed to recover the fine so imposed or duty in respect of the goods from out of the security required to be furnished illegally.
It is contended by the appellants that the goods seized were admittedly manufactured in the appellants' factory in Bhubaneswar within the jurisdiction of the respondents in the State of Orissa. However, the goods were seized by the officers of P & I Unit of the Dy. Collector, Vishakhapatnam while in transit on National Highway No. 5, near Srikakulam in the neighbouring State of Andhra Pradesh. It is stated that the seized goods were taken to Vishakhapatnam in A.P. after interrogation of the driver of the truck in which the goods were being transported. It is also stated that officers of Guntur Col-lectorate had proceeded to investigate the offence and recorded the statements of Sh. Bhagyadhar Nandi of the appellants' firm twice on 16-7-1987 and 24-7-1987 and the consignee of the goods on 17-7-1987 after a search of his premises. It is also stated that upon the production of various records on 3-8-1987 and furnishing of cash security in a sum of Rs. 15,000/- and the execution of a bond, the goods were provisionally released by the said Dy. Collector of Central Excise, Vishakhapatnam. It is stated that the show cause notice was issued by the Supdtt. (Technical) Vishakhapatnam on 21-12-1987 and that notice was not adjudicated but instead a separate notice dated 7-1-1988 was issued to the appellants by the respondents in the State of Orissa requiring them to show cause against the confiscation of the said goods. Ultimately, the said notice was adjudicated and the impugned order was passed. It is stated in the application that the seizure of the goods was illegal and without jurisdiction and consequently the requirement of security for their so-called provisional release was equally illegal. It is stated that the respondent could not have purported to confiscate the goods in absentia or levy a redemption fine or appropriate any amount of security furnished towards such fine or duty in respect of the said goods. It is also contended that the respondent was not competent to adjudicate in respect of the goods seized outside the limits of his jurisdiction. In support of this contention, the appellants have relied on Section 12 of the Customs Act and Notification No. 68/63 dated 4-5-1963 which relates to the provisions of seizure, among other things, in the Customs Act and the same provisions are said to apply to like matters in respect of duties imposed by Section 3 of Central Excises and Salt Act, 1944. They also relied on Section 110 of the Customs Act applicable to the seizures under Central Excise and stated that it is only the proper officer that could effect a seizure and a proper officer in terms of Rule 2(xi) of the Central Excise Rules, is the officer in whose jurisdiction the premises of the producer of any excisable goods are situated. In this context, they contended that the seizure and subsequent action by the officers of the Guntur Collectorate were illegal and without jurisdiction. It is also stated that by inadvertence grounds reflecting the aforesaid issues had not been formulated in the Memorandum of grounds of appeal and therefore, the appellants crave the indulgence of the Bench to grant leave to amend their EA-3 form and to include the grounds which are stated above.
2. We have heard Shri M.G.S. Murthy, learned advocate for the appellants and Shri M.S. Arora, learned DR for the Revenue. The learned advocate has submitted that the grounds the appellants are making out as additional grounds, are all legal ones and they are required to be allowed. He has contended that the question of jurisdiction can be raised at any time and that the same having been raised at this stage, is no ground to reject the same. The learned advocate also relied on the following rulings -
Union of India v. Tara Chand Gupta & Bros, 1983 (13) E.L.T. 1456 (SC) Chandra Bhushan Khanna v. Brij Nandan Singh and Ors. A.I.R. 1978 Allahabad 459 Mohan Lal and Ors. v. The Charge Officer, Purnia and Ors. A.I.R. 1974 Patna 275 Krishna Fabrics Pvt. Ltd. v. Collector of Customs 1988 (36) E.L.T. 633 Dr. S.K. Jhunjhunwala v. Collector of Customs, New Delhi 1985 (19) E.L.T. 521
3. Shri Arora, learned DR contended that these grounds which the appellants are seeking to incorporate at this stage, cannot be allowed as the appellants had not challenged the question of jurisdiction at the earliest point of time and having conceded to the jurisdiction, its validity cannot be challenged at a later stage. He relied on the ruling rendered in the case of Y.A. Hazari & Brothers v. Collector of Central Excise 1990 (47) E.L.T. 286.
4. Before we consider the prayer of the appellants, let us look into the various rulings relied upon by both the sides. In the case of Mohan Lal & Other v. The Charge Officer, the Patna High Court on a Writ Petition was considering the jurisdiction exercised by the respondent in passing the judgment in a title suit and held that the title suit of the petitioner was transferred by the Civil Court to the Revenue authority under an erroneous impression created by the provisions of Bihar Act 6 of 1970 and therefore, the order transferring the title suit of the petitioners was itself without jurisdiction which has resulted in the prosecution of the two proceedings before incompetent authorities. This ruling does not deal about raising additional grounds in the Appellate Forum and hence is not of much assistance.
5. In the case of Chandra Bhushan Khanna (supra) the Allahabad High Court held that jurisdiction cannot be conferred on a court by consent, acquiescence or waiver where there is none, nor can it be ousted where it is. The Court further held in para 9 as follows -
"Learned counsel next contended that this court would be justified in refusing to exercise its discretion in favour of the applicants on the grounds that the objection relating to the jurisdiction of the courts below was not raised at the initial stage and it has resulted in a prolonged litigation extending over eight years. Reference in this connection was made to Bisheshwar Prasad Gautam v. Dr. R.K. Agarwal 1976 2 All LR 324 : A.I.R. 1977 All 103 (FB). The circumstances in which this court refused to exercise discretion in that case were entirely different and the case cannot be a proper guide in the matter of exercise of discretion in the case of the present nature. In the circumstances of the present case, I feel that refusal to exercise my discretion would not be a sound exercise of judicial discretion in view of the fact that the decree passed by the court below is a nullity and its validity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings as laid down by the Supreme Court in Kiran Singh v. Chaman Paswan (A.I.R. 1954 SC 340)"
6. In the case of Union of India v. Tara Chand Gupta (supra), the Hon'ble Supreme Court had considered the question of exercise of jurisdiction by Civil Court in Excise and Customs matters and held that civil suit will lie if the Collector acts in excess of jurisdiction. This ruling does not assist us to consider the points raised in this application regarding admissibility of additional grounds.
7. In the case of Dr. Jhunjhunwala v. Collector of Customs (supra), the Single Member of ERB was considering the question of exercise of jurisdiction by an authority. However, this ruling does not deal with the question of raising additional grounds at the appellate stage.
8. In the case of Krishna Fabrics Pvt. Ltd. v. Collector of Customs (supra), the Single Member of NRB was considering the question of exercise of jurisdiction by Regional Bench of a matter pertaining to Special Bench. This ruling is also not of much help.
9. Shri Arora, DR relied on the ruling of Y.A. Hazari & Brothers (supra). In this case, the show cause notice had been issued by the Asstt. Collector and the Collector had exercised his jurisdiction. The assessee had challenged the exercise of jurisdiction by the Collector and the Bench had held that the assessee having participated in adjudication proceedings before the Collector without any objection, cannot now challenge the jurisdiction of Collector. This ruling also does not pertain to raising additional grounds and therefore, this ruling will not help at this stage.
10. We had the occasion to see the rulings of this Tribunal and the same are noted below -
"In the case of Khader Knitting Co. v. Collector of Central Excise, Madras 1984 (15) E.L.T. 176, the Bench felt that any ground based purely on point of law can be urged at any stage."
11. In the case of Cynamid India Ltd. v. Collector of Central Excise, Bombay 1984 (15) E.L.T. 186, the Bench held that since the appeal involved the question of correct classification of goods on which a ruling would have to be given, it would not be in the interest of justice or conduce to proper disposal if the appellants were prevented from raising the new ground.
12. In the case of Food Corporation of India v. Collector of Customs, Madras 1985 (22) E.L.T. 461, the Bench relying on the Supreme Court ruling has held that the question of pure law is not dependent on determination of any new questions of fact. The Bench has further held that when a question of law is raised for the first time, even in a court of last resort, it is not only competent but expedient in the interest of justice to entertain the plea. The Bench further added that the expediency can be doubted only if the plea cannot be disposed of without deciding the question of fact in considering which the court of ultimate review is placed in a much less advantageous position than the courts below.
13. In the case of Rexsin (India) Kottaimedu v. Collector of Central Excise, Madras 1985 (19) E.L.T. 209, the Bench has held that the ground being one based purely on a question of law, it could be taken before the Bench during the course of arguments.
14. In the case of Natwarlal Jethalal Solani and Ors. v. Collector of Customs, Ah-medabad 1988 (34) E.L.T. 257, the Bench has held that the contention raised by the appellants involves a question on jurisdiction of the authorities to initiate action for violation of provisions of Section 113(1) of the Customs Act. The Bench has held that it was obligatory on the part of the adjudicating authority to decide its jurisdictional question before ordering confiscation under Section 113(1). The Bench has further held that being a jurisdictional question, it could be raised even at the stage of the appeal and the Bench allowed to raise this question as the same had been raised even at the adjudication stage.
15. In the case of Kerala State Electronics Development Corporation Ltd. v. Collector of Customs as reported in 1990 (50) E.L.T. 561, the Bench relying on the Supreme Court ruling in the case of C.I.T. v. Gangappa Cables 1979 (116) I.T.R. 778, has held that additional grounds of appeal which are of a legal nature, can be allowed.
16. In the case of Mohan Samtani v. Collector of Customs 1990 (50) E.L.T. 592 the Bench relying on the ruling of the Supreme Court in the case of Kiran Singh and Ors. v. Chaman Paswan and Ors. (1954 SCA P. 725) and as in the case of Commissioner of Income-tax v. Mahalaxmi Textile Mills (I.T.R. 67 Vol. LXVI P. 710) has held that the above said decisions of the Supreme Court are applicable to this Tribunal also. Section 33 of Income-tax Act and Section 129B of Customs Act, 1962 are pari materia with each other. The Bench has also held that even under Section 129B of the Customs Act, 1962, this Tribunal after hearing the parties may pass such orders "as the Appellate Tribunal may think fit" as stated in the above section. The Tribunal has held that in such circumstances, even if the parties have not raised a point that such a relief can be granted to the parties, it becomes the duty of the Tribunal to grant such relief. The Bench has quoted the relevant paragraphs of Supreme Court citation in para 14 and 15 of the report, which is noted below -
"In this connection, reliance was placed on a decision reported in 1954-SCA page 725 (Kiran Singh and Ors. v. Chaman Paswan and Ors.) wherein at page 728 the Supreme Court has held as follows -
It is a fundamental principle well established that a decree passed by the Court without jurisdiction is a nullity and its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon even at the stage of execution and even in collateral proceedings, it is thus clear that a point questioning the very jurisdiction of the authorities to confiscate the idol of Nataraja idol and pedestal on the ground of immunity to the Chogyal of Sikkim can be raised even before this Tribunal for the first time as the defect of jurisdiction over the subject matter of the action, strikes at the very authority of the department to pass an order of confiscation".
"15. Reliance was also placed on another decision reported in I.T.R. 1967 - Vol. LXVI page 710 (Commissioner of Income-tax v. Mahalakshmi Textile Mills) wherein at page 713 Supreme Court held as follows -
Under Sub-section (4) of Section 33 of the Indian Income-tax Act, 1922, the Appellate Tribunal is competent to pass such orders on the ground "as it thinks fit". There is nothing in the Income-tax Act which restricts the Tribunal to the determination of question raised before the Departmental Authorities. All questions whether of law or of fact which relate to the assessee may be raised before the Tribunal. If the reasons recorded by the Departmental Authorities in rejecting a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the Departmental Authorities and the Tribunal and indeed they would be under duty, to grant that relief. The right of the assessee to relief is not restricted to the plea realised by him."
The abovesaid decision of the Supreme Court is applicable to this Tribunal also. Section 33 of the Income-tax Act and Section 129B of the Customs Act, 1962 are pari materia with each other. Even under Section 129B of the Customs Act, 1962, this Tribunal after hearing the parties may pass such orders "as the Appellate Tribunal may think fit" as stated in the above section. In such circumstances, even if the parties have not raised a point if the Tribunal thinks that such a relief can be granted to the party it becomes the duty of the Tribunal to grant such relief. Hence, the appellant is entitled to raise this point and accordingly, we hold that the Chogyal of Sikkim at the relevant point of time, i.e. during 1973 was entitled to immunity from Customs laws if it is shown that the Nataraja idol with pedestal was his property and that he was exporting it to New York. Hence, it takes us to the second point for determination as to whether it was His Highness the Chogyal of Sikkim who was the owner of goods at the relevant time of its seizure and if so whether the immunity can be extended to him even though the adjudication proceedings were even at a time when he became an ordinary citizen of India by virtue of Sikkim's cession with India.
17. In view of the case laws noted above, the grounds taken up by the appellants are legal in nature questioning the jurisdiction of the authorities and hence, they can be raised for the first time before the Tribunal. The merit of the said ground can be looked into at the time of final hearing. At this stage, the additional grounds sought to be raised being legal in nature, are permissible to be raised and therefore, the Misc. application is allowed.