Broad construction of fiscal incorporation powers upheld search-related notification; pending adjudication barred immediate directions on liability and cross-examination.

Section 12 of the Central Excise Act was construed broadly as part of the machinery for levy and collection of duty, so the incorporation of Customs Act provisions relating to search was not ultra vires merely because search is also regulated under criminal procedure law. Reading the statute as a whole, the Court held that search was not foreign to the levy machinery and upheld the notification dated 4-5-1963. On segregation of liability and fuller cross-examination, the Court declined to intervene at the threshold because adjudication was still pending before the competent authority, leaving those matters open for consideration at the proper stage.

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Issues: Whether the notification dated 4-5-1963 issued under Section 12 of the Central Excise Act, 1944 was ultra vires insofar as it applied the Customs Act provisions relating to search, and whether the Court should at this stage direct segregation of liability and fuller cross-examination in the pending adjudication.

Analysis: Section 12 of the Central Excise Act, 1944 was construed liberally as part of the machinery for levy and collection of duty. The Court held that the power to incorporate Customs Act provisions could not be read in a narrow or water-tight manner so as to exclude search merely because search procedure is separately dealt with in criminal procedure law. Reading the statute as a whole, the subject of search was held not foreign to the levy machinery, and the notification was not beyond the scope of Section 12. As to segregation of liability and cross-examination, the Court declined to interfere at the threshold because adjudication was still pending before the competent authority and those matters were left open for consideration at the appropriate stage.

Conclusion: The challenge to the notification failed, and no present direction was issued regarding segregation of liability or cross-examination.

Ratio Decidendi: A fiscal statute empowering incorporation of allied Customs Act provisions must be construed broadly to advance the levy machinery, and a search-related incorporation is not ultra vires merely because search procedure is separately regulated elsewhere.

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