2009 (10) TMI 105 - HC - Central Excise

Commissioner Central Excise's Jurisdiction Upheld, Investigation Legitimate

The court upheld the jurisdiction of the Commissioner Central Excise, Meerut to issue summons, deemed the ongoing investigation and summons legitimate, ... Power to summon persons to give evidence and produce documents under Section 14 of the Central Excise Act - Territorial jurisdiction of the Commissioner in respect of inquiries originating within the Commissionerate - Duty to attend and to state the truth and produce documents in inquiries - Writ of prohibition as an extraordinary remedy in rare cases - Return of seized documents during ongoing investigationTerritorial jurisdiction of the Commissioner in respect of inquiries originating within the Commissionerate - Power to summon persons to give evidence and produce documents under Section 14 of the Central Excise Act - Commissioner of Central Excise, Meerut had jurisdiction to summon the petitioners for the inquiry originating at Moradabad. - HELD THAT: - The notification defining the territorial limits of the Meerut-II Commissionerate included District Moradabad. The inquiry into alleged fraudulent availing and utilization of Cenvat credit commenced at Moradabad; where an inquiry originates the empowered Commissioner has authority to summon persons whose attendance is considered necessary. The Court held that once the inquiry emanated from Moradabad, the Commissioner, Central Excise, Meerut was competent to issue summons to persons outside his immediate localities to assist the ongoing investigation. [Paras 7, 10]Jurisdiction of Commissioner, Meerut to issue the summons upheld and summons were held to be within the authority conferred for the inquiry.Power to summon persons to give evidence and produce documents under Section 14 of the Central Excise Act - Duty to attend and to state the truth and produce documents in inquiries - Writ of prohibition as an extraordinary remedy in rare cases - Summons issued under Section 14 were investigatory in nature and not amenable to prohibition in the facts of this case; writ of prohibition was refused. - HELD THAT: - Section 14 confers power on a duly empowered Central Excise Officer to summon persons to give evidence and produce documents in an inquiry; persons so summoned are bound to attend and state the truth. A summons is an intimation to appear and produce documents to facilitate inquiry and is not a final adjudicatory order. The Court applied the settled test for issuing prohibition - it is an extraordinary remedy available only where the authority acts without or in excess of jurisdiction, violates principles of natural justice, acts under a void law or contravenes fundamental rights. None of those contingencies existed here; the authority was exercising its lawful investigatory power and no adjudication of liability had been made. Consequently the petitions did not warrant intervention by way of prohibition. [Paras 8, 12, 15, 16]Proceedings under Section 14 are lawful investigatory steps; writ of prohibition declined.Return of seized documents during ongoing investigation - Prayer for return of seized documents and initiation of proceedings against officers under Section 22 was refused while the investigation remains pending. - HELD THAT: - The Court observed that the investigation was ongoing and relevant documents had been taken into custody in the course of the inquiry into alleged fraudulent Cenvat credit. Interference to order return of seized material or to direct departmental proceedings against officers could not be granted mid-investigation. Absent conclusion of the inquiry, there was no scope to accede to the prayers for return of documents or departmental action against the officers. [Paras 18]Request for return of seized documents and for action under Section 22 against officers denied for the present; no interference while investigation continues.Final Conclusion: Writ petitions dismissed. The Court upheld the Commissioner, Meerut's authority to summon persons under Section 14 for an inquiry originating in Moradabad, treated the summons as lawful investigatory measures not warranting prohibition, and declined to order return of seized material or departmental proceedings against officers while the investigation remains pending. Issues Involved:1. Jurisdiction of the Commissioner Central Excise, Meerut to issue summons under Section 14 of the Central Excise Act.2. Legitimacy of the ongoing investigation and summons issued.3. Request for return of documents and properties seized.4. Request for initiation of proceedings under Section 22 of the Central Excise Act against the officers of the Excise Department.5. Claims of harassment and misuse of statutory provisions by the authorities.Detailed Analysis:1. Jurisdiction of the Commissioner Central Excise, Meerut:The petitioners argued that the Commissioner Central Excise, Meerut lacked jurisdiction to summon them as they did not fall within his territorial jurisdiction. However, the court noted that the inquiry was initiated by the Central Excise Officers of Meerut at the factory of M/s. Arora Aromatics in Moradabad, which falls under the jurisdiction of the Commissioner, Central Excise, Meerut as per Notification No. 66/2001-C.E. (N.T.), dated 13-11-2001. The court clarified that once an inquiry is initiated in a district within the Commissioner's jurisdiction, he has the authority to summon any person for evidence, irrespective of their location. Thus, the Commissioner Central Excise, Meerut had full authority to summon the petitioners.2. Legitimacy of the Ongoing Investigation and Summons Issued:The court emphasized that under Section 14 of the Central Excise Act, any Central Excise Officer duly empowered by the Central Government has the power to summon any person necessary for an inquiry. The petitioners were summoned to cooperate in the investigation of fraudulent availing and utilization of Cenvat credit by M/s. Arora Aromatics. The court stated that the summons were not orders but mere intimations requiring appearance for giving evidence or producing documents. As the investigation was ongoing and no liability had been fastened yet, the court found no misuse of authority and held that the summons were legitimate.3. Request for Return of Documents and Properties Seized:The petitioners requested the return of documents and properties seized during the investigation. The court denied this request, stating that the investigation was still ongoing and had not yet concluded. The seized documents and properties were necessary for the investigation, and thus, there was no scope for interference at this stage.4. Request for Initiation of Proceedings under Section 22 of the Central Excise Act:The petitioners sought proceedings against the officers of the Excise Department under Section 22 of the Central Excise Act, alleging harassment. The court dismissed this request, reiterating that the investigation was ongoing and that the actions taken by the officers were within their lawful authority and jurisdiction. There was no evidence of misuse of power that would warrant such proceedings.5. Claims of Harassment and Misuse of Statutory Provisions:The petitioners claimed that the continuous summons and searches constituted harassment and misuse of statutory provisions. The court found these claims unsubstantiated, noting that the summons were part of a legitimate investigation into serious allegations of fraudulent Cenvat credit availing and utilization. The court highlighted that the petitioners had not cooperated with the investigation, which justified the repeated summons. The court concluded that the actions of the authorities were lawful and necessary for the investigation.Conclusion:The court dismissed all three writ petitions, holding that the Commissioner Central Excise, Meerut had the jurisdiction to issue summons, the ongoing investigation and summons were legitimate, and there was no basis for returning the seized documents or initiating proceedings against the officers. The court found no evidence of harassment or misuse of statutory provisions, and thus, the petitions lacked substance. No orders as to cost were made.