Calcutta High Court
Bansal Industrial Gases (Bihar) Ltd. vs Collector Of C. Ex. on 2 August, 1988
Equivalent citations: 1989(22)ECC47, 1991ECR277(CALCUTTA), 1988(37)ELT347(CAL)
JUDGMENT Bhagabati Prasad Banerjee, J.
1. This writ application is directed against an order dated 12th February, 1985 passed by the Collector (Appeals) wherein it was held that the Additional Collector of Central Excise who passed the original order requiring the petitioner company to pay Central Excise duty amounting to Rs. 62,874/- under the Central Excises and Salt Act, 1944 read with Rule 9(2) of the Central Excise Rules, 1944 and the penalty of Rs. 5.000/- for contravention of the Central Excise Rules, is not an authority lower in rank to the Collector of Central Excise and as such it was held that the appeal should be decided by the Central Excise and Gold (Control) Appellate Tribunal and that consequently, ft was held that the Collector of Central Excise (Appeals), Calcutta had no jurisdiction to entertain and/or dispose of the appeal under the law. The question of law that is involved In this case is whether the Additional Collector of Central Excise is an authority lower in rank to the Collector of Central Excise or not and that If it is held that the Additional Collector of Central Excise is not lower in rank to the Collector of Central Excise, in that event, the appeal against the order passed by the Additional Collector shall lie to the Appellate Tribunal, namely, the Special Bench of CEGAT, New Delhi and on the contrary, if it is held that the Additional Collector of Central Excise is lower in rank to the Collector of Central Excise, In that event, the appeal which was filed by the petitioner before the Collector of Central Excise (Appeals) Calcutta would be held to be maintainable and the order dated 12th February, 1985 passed by the Customs Excise and Gold (Control) Appellate Tribunal, Calcutta Bench would be illegal. The fact in short relevant for the purpose of determination of this question Is as follows:
2. It was alleged that the petitioner company availed irregular exemption under Notification No. 71/78, dated 1-3-1978 as amended by Notification No. 91/78, dated 31-3' 1978. Notification No. 71 /78, dated 1 -3-1978 exempted the gas falling under Tariff Item No. 14H upto a value of Rs. 5 lakhs in respect of clearance beginning from 1 -4-1978, provided that the total value of clearances during the proceeding 11 months ending on 28-2-1978 did not exceed Rs. 13.75 lakhs. As it was found that though the value of the clearance effected from 1-4-1977 to 28-2-1978 in respect of oxygen and dissolved acetylene gas exceeded the aforesaid limit of Rs. 13.75 lakhs, the petitioner was granted exemption computing the value of clearance at Rs. 13.55 lakhs, as the petitioner did not declare the production and clearance value of Acetylene Gas during 1 -4-1977 to 17-6-1977. Thereby the petitioner enjoyed exemption for clearance effected by them till 29-6-1978. In the Show Cause Notice it was alleged that the petitioner company had contravened the provision of Rules 9(1), 173G and 173Q of the Central Excise Rules, 1944 inasmuch as the petitioner company availed irregular exemption under Notification No. 71/78, dated 1-3-1978 as amended by Notification No. 91/78, dated 31 -3-1978 in respect of Oxygen and dissolved Acetylene Gas falling under Tariff Item No. 14(H).
3. By the said Show Cause issued by the Additional Collector of Central Excise, Patna on 27th of March, 1985 the petitioner company was required to pay the Central Excise duty amounting to Rs. 62,874/- under the Central Excises and Salt Act, 1944 read with Rule 9(2) of the Central Excise Rules, 1944 and also a penalty of Rs. 5.000/- for contravention of Central Excise duty. In the said proceeding, the petitioner company was found liable to pay a sum of Rs. 62.S74/- and a penalty of Rs. 5.000/-. Thereafter, against the said order dated 27th of March, 1984 passed by the Additional Collector of Central Excise, Patna, the petitioner preferred an appeal before the Collector of Central Excise (Appeals) on 9-10-1984. Thereafter, the said appeal was not entertained by the Collector of Central Excise (Appeals), Calcutta as he had no jurisdiction to entertain the said appeal and it was held by him that against the order of the Additional Collector the appeal would lie before the Appellate Tribunal, New Delhi. At that stage, the petitioner company moved a writ application before this court whereupon Amtiabha Dutta.J. passed an order dated 18-9-1984 whereby it was ordered that "upon the petitioner's withdrawing before the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi and furnishing proof of such withdrawal, it will be permitted by the Collector of Central Excise (Appeals) to refile the appeal before him within three weeks from this date and in that event the Collector of Central Excise (Appeals) shall decide the question of jurisdiction to hear the appeal after giving the petitioner an opportunity of being heard and pass a reasoned order on that question..." Pursuant to the said direction passed by this Court, the Collector of Central Excise (Appeals) Calcutta heard the matter and held that the said appeal was not maintainable before the said authority, inasmuch as the post of the Additional Collector of Central Excise was equivalent to the post of Collector of Central Excise and as such the appeal would lie under the law before the Appellate Tribunal and the Collector of Central Excise (Appeals) Calcutta also passed an order restraining the Central Excise Officer, Patna not to enforce the demand of extra duty as well as penalty until CEGAT, Calcutta Bench passed an Interim order or final order in the appeal to be filed by the petitioner. Against this order the petitioner filed another application before this Court whereupon I disposed of the writ application on 15-1-1985 to refile the appeal before CEGAT, Calcutta which was returned by the Collector of Central Excise (Appeals) Calcutta by the order dated 27-10-1984 within a period of three weeks from that date and the said authority will decide the issue about the maintainability of the appeal before the Tribunal in view of the two decisions cited by the petitioner which were reported in 1983 ELT 1964 and 1983 ELT 645 and other decisions that might be placed before the Tribunal within a month from the date of presentation of appeal. The impugned order was passed pursuant to the direction given by me on 15th of January. 1985 by which the Customs Excise and Gold (Control) Appellate Tribunal, Regional Bench by the order dated 12th February, 1985 considered all the case laws for the determination of the question whether the post of an Additional Collector is lower in rank to the post of Collector of Central Excise or not and held that the post of Additional Collector of Central Excise was not lower in rank to the post of Collector of Central Excise and as such the appeal would lie to the 'Appellate Tribunal in view of the provisions of Section 35(B) of the Central Excises and Salt Act. Under Section 35 of the said Act, appeal lies to the Collector of Central Excise if the order is passed by a Central Excise Officer who is lower in rank than the Collector of Central Excise whereas appeal to the Appellate Tribunal would lie if the decision or order is passed by the Collector of Central Excise as an adjudicating authority.
4. The petitioner's case is that the post of Additional Collector of Central Excise in this matter is lower in rank than that of the Collector and accordingly appeal would lie under Section 35 of the said Act before the Collector (Appeals). In support of the contention that against the order passed by the Additional Collector of Central Excise an appeal would lie under Section 35 of the said Act before the Collector (Appeals), reference was made by Mr. Mani Lal Banerjee, Advocate for the petitioner to the decision of CEGAT North Regional Bench, New Delhi reported in 1983 ELT 645 in the case of Khatri Bidi Works Beaware v. Collector of Central Excise, Joypur. In this case it was held that the Additional Collector is not equal in rank to the post of Collector and as the post of Additional Collector is subordinate to the post of Collector, appeal would lie from the order passed by the Additional Collector to the Collector. In this case, the Tribunal held that the Additional Collector of Central Excise is administratively under the Collector and was undoubtedly subordinate to the Collector of Central Excise, Jaipur. It was held that for the purpose of Central Excise Rules, however he is a Collector. But for the purpose of adjudication he is not a Collector as he does not have unlimited powers but reduced powers.
5. Mr. Banerjee, learned Advocate appearing on behalf of the petitioner contended that the question involved in this writ application is of great importance inasmuch as if it is held that Collector Includes Additional Collector in that event, only one appeal would lie inasmuch as against the order of Collector appeal lies to the Appellate Tribunal under Section 35B of the Central Excise Act whereas if it is held that if Additional Collector is subordinate to the post of Collector, in that event, first appeal would lie under Section 35 of the said Act to the Collector (Appeals) and then there would be a second appeal to the Appellate Tribunal under Section 35B(b) of the said Act. The word 'Collector' is not defined in the Act. Section 2(b) of the Act defines Central Excise Officer which means any officers of the Central Excise or any person invested by the Central Board of Excise and Customs with any of the powers of a Central Excise Officer under the Act. Section 33 of the Central Excise Act provides power of adjudication which is as follows :
"where by the rules made under this Act anything is liable to confiscation or any person is liable to 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 by an Assistant Collector of Central Excise.
Provided that Central Board of Excise and Customs constituted under the Central Boards of the Revenue Act, 1963 (54 of 1963) may, in the case of any officer performing duties of an Assistant Collector of Central Excise reduce the limits indicated under Clause (b) of this sub-section and may confer on any officer the powers indicated under Clause (a) or (b) of this section."
So Section 33 provides only two adjudicating authority, one Collector and other Assistant Collector and Central Board of Excise and Customs have been conferred with the power to delegate to any officers Indicated under Clauses (a) and (b) of Section 33 to discharge such function. So under the Act adjudication can only be made either by the Collector or Assistant Collector and any other officer as may be vested with the power of performing the functions of the Collector and/or the Assistant Collector for the purpose of adjudication and Imposition of penalty. Rule 2(ii) defines the word 'Collector'. On perusal of the said definition it appears that the word Collector has been defined for two different categories (A) in relation to excisable goods other than salt and (B) in relation to salt and the words "and includes an Additional Collector and any other officer specially authorised under Rule 4 or Rule 5 to exercise throughout any state or any specified area therein all or any of the powers of a Collector under these rules" have been used to qualify both the category (A) and (B). It may be mentioned that excepting the said definition, there was no mention of the word 'Additional Collector' in any other provisions of the said rules. Now the question is as it has been held by the CEGAT in the case of Khatri Bidi Works Beaware v. Collector of Central Excise, Joypur wherein this question was considered and It was held that the words 'Additional Collector' is only confined to the word Salt Commissioner in category 'B'. Such a construction of the definition of the word 'Collector' in my view is wholly mis-conceived, inasmuch as, within the definition of Collector, firstly under Category A, several Collectors of several areas have been mentioned and therefore, under Clause (B) it was provided that in relation to Salt Commissioner and after both the categories the words "and includes an Additional Collector" covers both the categories (A) and (B). The Clause (A) and Clause (B) of the defination of the word 'Collector' are placed in the statute in a shorter margin and the words "and includes an Additional Collector..." have been placed under a bigger margin which makes it dear by the statute that the words "and includes Additional Collector..." control and qualify both the categories (A) and (B).
6. If It Is the Intention of the Rule Making Authority that the words 'Additional Collector' is only confined to Clause (B) in that event, words would not have been printed In such a manner and that would also result in making violence to the word used in the rule. When the rule has defined the word 'Collector', the Court will not limit this scope of the definition by making violence to the plain words used. The contention of the petitioner that the words 'Additional Collector' is only confined to Salt Commissioner, cannot be accepted on the basis of the decision of the CEGAT North Regional Bench, New Delhi as the same is based on total misreading and misunderstanding of the words used in the said definition of the term 'Collector' under Rule 2(ii) of the said Rules. When Collector has been defined extensively and when it was provided that the word Collector includes Additional Collector, it must be held that the word 'Additional Collector' is included within the definition of the word Collector'. In order to establish that the post of Additional Collector Is subordinate to the rank to the word Collector, it must be shown from the Act and the rules framed thereunder, the Additional Collector had been conferred with some specific powers and/or under the provisions of the Act It could be found out that the Additional collector Is Inferior in rank and was to work under the control and supervision of the Collector. When the definition made it dear that the Collector includes Additional Collector and when other rules do not at all refer to the words 'Additional Collector' anywhere in the Act and the rules framed thereunder, it must be held that the meaning is dear and that word Collector in-dudes Additional Collector. In the rules reference is there to the expression Collector, Deputy Collector, Assistant Collector, Inspector, but there was no reference to the word Additional Collector, inasmuch as, the word Collector includes the Additional Collector.
7. In this connection, it may be mentioned that various notifications under Rule 4 read with Rule 2(ii) of Section 2(b) of the said Act were issued from time to time by the Central Board of Excise and Customs wherein it appears that the Central Board of Excise and Customs have appointed the Additional Collector of Customs. Calcutta as Central Excise-officer and invested the Additional Collector with the powers of Excise by the Notification No. 45/67-C.E., dated 1-4-1967. From the said notification it is made crystal clear that the Central Board of Excise and Customs have appointed Collector of Customs, Calcutta and the Additional Collector of Customs Calcutta as Centra) Excise Officer and invested the said Collector and Additional Collector with the powers of a Central Excise. Similar other notifications are there where the Collector and the Additional Collector have been appointed as Central Excise Officers and invested with the Collector and Additional Collector of Customs with the power of Collector of Central Excise. In my view, if such power was not conferred by the Central Board upon the Additional Collector to discharge the power and function of a Collector, in that event any order passed by the Additional Collector would have been void and illegal, inasmuch as, under the Act until and unless such authorisation is made either in the Act by expressed word or through delegation of power by the Central Board, in that event, the Additional Collector could not have exercised any function whatsoever. The said notifications are in the nature of the statutory Instruments in the nature of "contemporary exposition, inasmuch as, this notification shows how statute was understood by those to whom ft was addressed and by those who are responsible for its enactment. It Is well-known that the best exposition of a statute or any other document is that it has received from contemporary authority and In the Instant case, the authorities concerned clearly understood the powers and function of the Collectors and/or the Additional Collectors and/or the other authorities for the purpose of proper functioning and the authorities were fully aware that the defination of the word Collector includes the words Additional Collector and that was the very reason for which both the Collector and Additional Collector were appointed as Central Excise Officer and vested them the powers of a Central Excise Officer under the Act and the rules. This clearly throws light on this point and conclusively establish that the Additional Collectors are not subordinate to the Collector and that there could not be any doubt that the decision taken by the Additional Collector means a decision taken by the Collector for the purpose of appeal and the authority competent to hear the appeal against the order of the Collector to only competent to hear and dispose of the appeal from the decision of the Additional Collector.
8. Under Section 33 of the Central Excises and Salt Act, the power of adjudication have been conferred on two specified authorities, namely, (a) Collector, (b) Assistant Collector and any other categories of officers as may be vested with the power by the Board either to discharge powers and functions of the Collector or the Assistant Collector. So Section 33 of the said Act made ft abundantly clear that the Additional Collector for the purpose of adjudication can only exercise the powers of the Collector or the Assistant Collector. As ft could not be said by any stretch of imagination that the post of Additional Collector is equal to or subordinate to the post of Assistant Collector, there is no scope for the Additional Collector to exercise power of adjudication independently under the Act. Whatever the power the Additional Collector can exercise must be a power delegated by the Board in this behalf. If the contention of Mr. Banerjee learned Advocate appearing on behalf of the petitioner is accepted that the Collector can exercise power independently under the Act and the rules, in that event, the Court have to read In words contrary to a scheme of the Act. The Court may read word which Is considered to be necessarily implied by word which is already in the statute and as limited power to add to, alter or ignore statutory word in order to prevent a provision from being unintelligible, absurd or totally unreasonable, unworkable or totally irreconcilable to the rest of the statute. The meaning is clear and the intention of the statute is also dear. Any other meaning to the provisions of Section 33 could be contrary to the machinery provided under the Act. Accordingly, it is made abdundantly dear that the post of Additional Collector comes within the definition of the word 'Collector' and the Additional Collector had to discharge the power and function of a Collector and accordingly, appeal would lie to the Appellate Tribunal under Section 35B of the said Act. It to immaterial whether against the order of adjudication, there would be one appeal or two appeals. If the adjudication is made by the Assistant Collector, the Act provided for two appeals. On the contrary, If the adjudication to made by the Collector, in that event, there would be only one appeal. The adjudlcation to taken up by the Collector or Assistant Collector on the basis of valuation. This to nothing unusual and arbitrary. In the judicial hierarchy of this country, If a suit for a lesser value to decided by the Munsif, there would be first appeal and second appeal against the order passed by the Munsif whereas if the suit is decided by the Additional District Judge or the subordinate Judge, in that event, there Is only first appeal and that the classification of the case for the purpose of hearing by different authorities is determined on the basis of valuation and that there is rational nexus for making such classification. Accordingly, I am unable to hold for loss of one right of appeal this court have to hold that the adjudication made by the Additional Collector should be treated to have been made by the Assistant Collector, so that the petitioner can avail two appeals.
9. Accordingly, I hold that the decision of the CEGAT in the case of Khatri Bidi Works Beaware v. Collector of Central Excise, Joypur decided by North Regional Bench reported in 1983 ELT 645 has erroneously decided the question and because of the reason given by me I also hold that the decision of the CEGAT, New Delhi (Full Bench) in the case of S. Kumar and Ors. v. Collector of Central Excise and Ors. reported in 1983 ELT 1964 had wrongly decided the question. Accordingly, I hold that the determination made by the Customs, Excise and Gold (Control) Appellate Tribunal, East Regional Bench, Calcutta dated 12th February, 1985 which is Annexure J to the writ application has correctly decided the point that the post of Additional Collector of Central Excise is same and equivalent to the post of Collector and accordingly, I hold in agreement with the decision of the said Appellate Tribunal that In the instant case, appeal against the order of the Additional Collector, would lie not to the Collector (Appeals), but the appeal would lie to the Special Bench of the CEGAT, New Delhi. In the result, the writ petition is dismissed. There will be no order as to costs.