2023 (9) TMI 167 - AT - Central Excise

Tribunal upholds jurisdiction of Commissioner Mehra to adjudicate tax matter, conflicting decisions to be resolved by Larger Bench

The Tribunal dismissed the challenge to Shri C.M. Mehra's jurisdiction, affirming his authority to adjudicate the matter as Commissioner of Central Excise ... Jurisdiction to pass the original order of adjudication - Whether an Officer, holding charge of the Commissionerate in accordance with such an order/empowerment being made by the Chief Commissioner (also read 'and not the Board') is legally competent to discharge the statutory functions & responsibilities and execute them in accordance with the powers vested in him under the statute (Central Excise, Customs and Service Tax Laws), in his capacity as the Commissioner? HELD THAT:- The fact that the appellants had filed a Miscellaneous Application before the Tribunal, the purport of which is that the Commissioner Shri C.M. Mehra, who adjudicated the matter and was holding the charge of Commissioner of Central Excise and Service Tax, Siliguri, pursuant to such assignment of charge by the jurisdictional Chief Commissioner, was statutorily not vested with powers to adjudicate the matter as there was no delegation in terms of Section 37A of the Central Excise Act, 1944 read with Rule 3(1) & 3(2) of the Central Excise Rules, 2002, in favour of the Chief Commissioner, by the Central Government empowering him to appoint Sri C.M. Mehra to the charge of Commissioner of Central Excise & Service Tax, Siliguri. Hence, the impugned adjudication by Sri C.M. Mehra suffered from lack of jurisdiction. Having specified a jurisdiction which is not disputed and having identified individuals (including Sri CM Mehra) as Central Excise Officers, it is not so mandated that the Board alone can post the individual (Central Excise Officers) to a given charge (jurisdiction) and it cannot be done by any subordinate officer in the absence of delegation of power. For the reason, any interpretation restricting the scope of this power, its free flow and to state as its vesting only in the Board, is nowhere enshrined in law. The Larger Bench of the Tribunal in CCE, New Delhi Vs. Avis Electronics Pvt. Ltd., [2000 (2) TMI 122 - CEGAT, NEW DELHI] had held that in understanding the provisions of the rules, the Tribunal was not to supplement or add words to the Rule. While it could be argued that the decision rendered in Mall Eximp (P) Ltd., is without the aid of any words to the provisions contained, but it is a fact that the manner of reading the law as interpreted in Mall Eximp (P) Ltd., gives rise to a meaning that does not flow from the language deployed in the statute unless extraneous words are added to it. It is too well known that an interpretation that leads to absurdity more so when the words used are plain and unambiguous and the intention of the legislature is clearly discernible, is to be avoided, yet the co-ordinate bench in its wisdom has decided in the manner holding lack of jurisdiction of the Commissioner deputed on additional charge, assigned by the Chief Commissioner - The issue of jurisdiction involved in the present matter is akin to the case of Raghunath International Ltd., Vs. UOI [2012 (11) TMI 951 - ALLAHABAD HIGH COURT]. The Hon'ble High Court, having held that the publication of notification was not meant to be in respect of existing Central Excise Officers, it is clear that the decision of this Tribunal in Mall Eximp (P) Ltd., was extra-legal and not good law. The decision rendered by the Tribunal, in the case of Mall Eximp (P) Ltd. [2008 (6) TMI 17 - CESTAT, KOLKATA], is in violation to the language of the statute. While there can be no qualms to the principle of Verbis legis non est recedendum, as it so flows from a plain reading of the statutory words, without interpolating words that have not been made use of in the statute. The learned adjudicating authority wielded absolute jurisdiction in the matter and was the proper authority exercising statutory, administrative and functional jurisdiction over the Central Excise & Service Tax Commissionerate, Siliguri in his capacity as Commissioner of Central Excise & Service Tax, Siliguri having been duly assigned the said charge by the jurisdictional Chief Commissioner. The ratio of law in Mall Eximp (P) Ltd., case is respectfully disagreed with and therefore cannot be adopted in the present case. In view of the observations above and respectful but strong disapproval of and disagreement with the decision rendered by the co- ordinate bench in the case of Mall Exim (P) Ltd., it is deemed appropriate that the matter needs to be considered by the Larger Bench to resolve the conflict and decide the following question of law:- 'Whether in the facts and circumstances of the case, Sri C.M. Mehra was vested with the jurisdiction to adjudicate the matter.' The Registrar directed that the matter alongwith the case records be placed before the Hon'ble President for his kind consideration and constitution of the Larger Bench to decide the impugned question of law. Issues Involved:1. Jurisdiction of Shri C.M. Mehra to pass the original order of adjudication.2. Whether the Tribunal has the jurisdiction to decide the issue of jurisdiction.3. Validity of the adjudication order passed by Shri C.M. Mehra.Summary:1. Jurisdiction of Shri C.M. Mehra to pass the original order of adjudication:The appellant raised an additional ground questioning the jurisdiction of Shri C.M. Mehra, Commissioner of Central Excise & Service Tax, Siliguri, to pass the original adjudication order. The appellant relied on the Tribunal's decision in Commissioner of Central Excise, Siliguri Vs. M/s. Mall Eximp (P) Ltd., which held that Shri Mehra lacked jurisdiction. The Tribunal in Mall Eximp case observed that unless an official is appointed in the manner statutorily provided and invested with appropriate jurisdiction, he cannot exercise any of the statutory powers.2. Whether the Tribunal has the jurisdiction to decide the issue of jurisdiction:The Revenue argued that the issue of jurisdiction was not raised before the adjudicating authority and thus cannot be raised for the first time before the Tribunal. The Tribunal, however, held that it is duty-bound to follow the directions of the Hon'ble High Court of Sikkim to decide on this issue. The Tribunal disagreed with the Revenue's contention that it has no jurisdiction to decide the issue of jurisdiction of Shri C.M. Mehra.3. Validity of the adjudication order passed by Shri C.M. Mehra:The Tribunal referred to its earlier decision in Mall Eximp (P) Ltd., which held that Shri Mehra lacked jurisdiction as he was not appointed to the specific charge by the Board. The Tribunal analyzed the statutory provisions and judicial rulings, concluding that the Chief Commissioner has the authority to assign additional charge to a Commissioner within his jurisdiction. The Tribunal found that the decision in Mall Eximp (P) Ltd. was not good law and disagreed with its ratio. It held that Shri C.M. Mehra was duly empowered and had the jurisdiction to adjudicate the matter in his capacity as Commissioner of Central Excise & Service Tax, Siliguri.Conclusion:The Tribunal dismissed the plea challenging Shri C.M. Mehra's jurisdiction and held that he validly adjudicated the matter. The Tribunal directed the Registrar to place the matter before the Hon'ble President for consideration by the Larger Bench to resolve the conflict and decide the question of law regarding Shri Mehra's jurisdiction.