TaxTMI 
TaxTMI 
2012 (11) TMI 951
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....the Act,1944 and Rule 3 of 2002, Rules. The facts of the case which need to be briefly noted for deciding the issues of the writ petition are: The petitioner was engaged in the manufacture and clearance of Gutkha and Pan Masala bearing "SIR" brand name. During the year 2007-08, search and seizure were carried out at the premises of the petitioner as well as at places of transporters, distributors etc. by the officers of the Directorate General of Central Excise, New Delhi which was followed by recording of statements of various persons. A show-cause notice dated 01/10/2009, under Section 11-A of the Act, 1944 was issued by one Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence asking the petitioner to show cause to the Commissioner, Central Excise, Kanpur within 30 days as to why the duty, penalty and interest be not imposed. Petitioner's case in the writ petition is that the Board i.e. i.e. Central Board of Excise and Customs by letter dated 03/12/2009, replying an application under the Right to Information Act, 2005 informed that Dr. Devender Singh was posted as Additional Director General, DGCEI, New Delhi vide Office Order ....
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....he Commissioner Central Excise, Kanpur which clearly indicates that he had no jurisdiction to issue show cause notice he being not the adjudicatory authority. It is submitted that if the notice was to be issued by the authority other than the adjudicatory authority, prior approval of the adjudicatory authority was required to be taken before issuance of the show cause notice. It is further submitted that the notice was unsigned. Learned counsel for the petitioner in support of his submission has placed reliance on the judgment of the Gauhati High Court in Central Excise Appeal No. 7/2009, The Union of India & Anr Vs. M/s Khusi Aromatics & Ors, dated 04/6/2010, wherein the Division Bench of the Gauhati High Court while considering Section 2(b) of the Act, 1944 and Rule 3 of the 2002 Rules, held that the notification appointing a person as a Central Excise Officer is required to be published in the Official Gazettee and when there was no publication of the appointment of Shri Amar Singh, Chief Commissioner, Central Excise, Ranchi Zone as Commissioner Central Excise, Shillong he had no authority to participate in the proceeding and such decision was vitiated as nonest. Learned coun....
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....General of Central Excise Intelligence to issue notice as Commissioner of Central Excise cannot be challenged or entertained in this writ petition. We have considered the submissions of the learned counsel for the parties and have perused the record. Before we proceed to consider the submission of the learned counsel for the parties, it is necessary to refer to relevant provisions of the Act, 1944 and the rules framed thereunder and the relevant statutory changes brought from time to time. The definition of Central Excise Officer is contained in Section 2(b) of the Act, 1944. Section 2(b) of the Act, 1944 earlier to its substitution by the Finance Act, 1995 was to the following effect: "2. Definitions.- In this Act, unless there is anything repugnant in the subject or context,- (a) ............................ (b) "Central Excise Officer" means any officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 with any of the powers of a Central Excise Officer under this Act;" The above definition of the "Centr....
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.... 4. Appointment of Officers.-The Central Board of Excise and Customs may appoint such persons as it thinks fit to be Central Excise Officers, or to exercise all or any of the powers conferred by these Rules, on such officers." Another set of Rules were framed namely; Central Excise Rules, 2001. Rule 3 sub-rule 1 of the Rules, 2001 were as follows: "Rule 3 (1). Appointment and jurisdiction of Central Excise Officer:-The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer or to exercise all or any of the powers conferred by these rules, on such officer." Rules, 2001 were superseded by 2002, Rules. 2002, Rules while superseding the 2001, Rules mentioned as follows: "In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and in supersession of the Central Excise (No.2) Rules, 2001, except as respect things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:- Central Excise Rules, 2002." Rule 2 (f) and Rule 3 of the 2002 Rules, which are relevant in the present case are quoted below: "Rule 2. Definitions.- In these rules, un....
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....as vice-versa, but that interpretation is adopted only where the intention of the legislature is manifest. Justice G.P. Singh in the Principles of Statutory Interpretation (Thirteenth Edition) Chapter 7 page 485 has stated as follows: "The word 'or' is normally disjunctive and 'and' is normally conjunctive but at time they are read as vice versa to give effect to the manifest intention of the Legislature as disclosed from the context. As stated by SCRUTTON,L.J.:"You do sometimes read 'or' as 'and' and in a statute. But you do not do it unless you are obliged because 'or' does not generally mean 'and' and 'and' does not generally mean 'or'. And as pointed out by LORD HALSBURY the reading of 'or' as 'and' is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done". Where provision is clear and unambiguous the work 'or' cannot be read as 'and' by applying the principle of reading down. But if the literal reading of the words produces an unintelligible or absurd result 'and' may be read for 'or' and 'or' for 'and' even though the result of so modifying the words is less favourable to the subject provided that the in....
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....otified in the Official Gazette. Notification in the Official Gazette for appointment of such persons as the Board thinks fit has a purpose so as to persons who are dealt with such officers may know about the authority of the persons who is exercising the power qua then under the Act. From the Scheme of Section 2(b) of the Act, 1944 and the Rules framed thereunder as noted above, it is thus clear that the appointment under the Rules as Central Excise Officer was contemplated only in the last category of the persons in the definition clause i.e. "any person" (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963............." The Scheme of Section 2(b) of the Act, 1944 never contemplates appointment of the Officers of the Central Excise Department under the Rules. The Rules have to be read to supplement the provisions of the Act and to carry the purpose and object of the Act. In case, Rule 3 of the 2002, Rules is interpreted to mean that the Board even if the Officer is Chief Commissioner of Central Excise or the Commissioner of Central Excise is to be invested with the pow....
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....ained by taking a illustration: An officer of the Central Excise Department is appointed as a Commissioner of Central Excise, and a notification is published of his appointment as a Commissioner of Central Excise. Now as per the argument of the learned counsel for the petitioner, for exercising any power of "Central Excise Officer" under the Act, 1944, a notification under Rule 3(1) of the Rules, 2002 is mandatory and without any notification under Rule 3(1) of the Rules, 2002 published in the Official Gazette, investing the power of "Central Excise Officer" to the Commissioner of Central Excise., he is incapacitated to exercise any power entrusted to Central Excise Officer. The argument has to be rejected since by virtue of a person being a Commissioner of Central Excise, the power to function as a Central Excise Officer is already invested in him and no further investment is required or necessary. This makes it clear that the submission of the learned counsel for the petitioner that unless a notification under Rule 3(1) of the 2002, Rules investing power is issued, no person even though he is Commissioner of Central Excise can function as a Central Excise Officer is incorrect. ....
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....ion of conjunctions, however, has been sometimes made without sufficient reasons, and i"t has been doubted whether some of the cases of turning 'or' into 'and' and vice versa have not gone to the extreme limit of interpretation." 45.To us, the language of the Section is clear and the statute does not demand that we should substitute "or" or read this word interchangeably for achieving the object of the Act. On the contrary, the objective of the Act is more than clear that the legislature intended to provide a very limited right to appeal. The orders which can be appealed against have been specifically stipulated by unambiguously excluding the provisions which the legislature did not intend to make appealable under the provisions of the Act. It is always expected of the Court to apply plain rule of construction rather than trying to read the words into the statute which have been specifically omitted by the legislature." Another recent judgment which is relevant to be noticed is Union of India & Ors Vs. Ind-Swift Laboratories Ltd, (2011) 4 SCC 635, where the Apex Court had occasion to interpret Rule 14 of the Cenvat Credit Rules, 2004 and held that the word "or" used in Rule 1....
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....he manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "or" appearing in Rule 14, twice, could be read as "and" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "or" in between the expressions "taken" or "utilized wrongly" or "has been erroneously refunded" as the word "and". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest." The proposition of law laid down by the Apex Court in the aforesaid case do support our view that in Section 2(b) of the Act, 1944, all the three clauses which are joined by the work "or" have to be read as a disjunctive clause and the requirement of investing power by the Board in the third category cannot be read in first two categories. The Division Bench of the Delhi High Court in Duncan Agro Industries Ltd. Vs. Union of India, 1989 (39) E.L.T. 211 (Del), also supports the interpretation which we have put to Section 2(b) of the Act, 1944. It is useful to quote paragraphs 21, 22,23,24,25 and 26 of the said judgement which are as under: 21. The recr....
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....tion contained in Section 2(b) of the Act says in addition that Central Excise Officer means any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 (54 of 1963) with any of the powers of the Central Excise Officer under this Act. By the impugned notification dated May 29, 1986 in exercise of the powers conferred by clause (b) of Section 2 of the Act, and Rule 4 of the Rules, the Central Board of Excise and Customs thereby appointed a Director (Audit) in the Directorate General of Inspection and Audit (Customs & Central Excise), New Delhi, as Central Excise Officer and invested him with the powers of Collector of Central Excise, to be exercised by him throughout the territory of India. The power, however, was restricted for the purposes of investigation and adjudication of such cases, as may, from time to time, be assigned to him by the said Central Board of Excise and Customs. Under the second part of the definition contained in Section 2(b) any person including an officer of the State Government, could be invested by the Central Board of Excise and Customs with any of th....
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....rs of the Land Customs Act were treated as Customs Officers having jurisdiction under Section 6 appointing Land Customs Officers to be officers of customs for their respective jurisdiction and to exercise the powers conferred and to perform the duties imposed on such officers by the Sea Customs Act. Section 6 of the Customs Act, 1962 now makes provision for entrustment of functions on any officer of the Central Government and the State Government. Section 5 of Foreign Exchange Regulation Act, 1947 as well as of 1973 similarly make provisions for entrustment of functions. Our attention has been invited to notifications issued from time to time, right from 1957 under Section 2(b) of the Act investing designated officers with all the powers of a Central Excise Officer. Particularly by notification dated August, 15, 1964, the Officer on Special Duty appointed as such by the President by the order of the Government of India in the Ministry of Finance, was invested with the powers of the Collector of Central Excise for the purpose of investigation and adjudication of such cases as may, from time to time, be assigned to him by the Board. It must be attributed to the legislature that it wa....
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.... of a definition clause is to provide a key to the proper interpretation of the enactment and to shorten the language of the enacting part of the statute to avoid repetition. Ordinarily the scheme of the definition clause is only to define but a definition clause can, in our view, lay down substantive provision as in the instant case. When a word is defined to mean such and such, the definition is prima facie restrictive and exhaustive. But the definition in Section 2(b) gives an extended meaning of Central Excise Officer and the word is to be interpreted by its extended meaning. When the word 'means' are used it affords an explanation of the meaning which must inevitably be attached to those expressions. In this case it is dependent on investing. A meaning has to be attributed to each word used by the legislature in Section 2(b) and the language employed by legislature shows that a person could be invested with any of the powers of the Central Excise Officer under the Act, and he would be a Central Excise Officer. The investing of the powers on any person is, therefore, clearly contemplated. Second part of Section 2(b) has to be treated as a substantive provision." Justice Bhag....
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....octrine could not be made applicable in the facts and circumstances of the case inasmuch as it is not intended to perpetrate any direct interference with the rights of individual without specific legal authority and is not intended to harass and cause prejudice to any party. Accordingly, I hold that the learned single Judge and the learned Judges of the Division Bench of the Madras High Court in the case mentioned above had rightly decided that the notification No. 215/86 dated 27th March, 1986 was legal and valid and as such I hold that the respondent No. 3 had jurisdiction to issue the impugned show cause notice. I am constrained to take this view apart from the decision of the Madras High Court and the observation by the House of Lords mentioned above but also because of the observation of Denning L.J. in Magor and St. Mellons RDC v. Newport Corporation reported in (1950) 2 All ER 1226 that "We do not sit here to pull the language of Parliament and of Ministers to pieces and make nonsense of it. That is an easy thing to do and it is a thing to which lawyers are too often prone. We sit here to find out the intention of Parliament and of Ministers and carry it out and we do this b....
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....s stated in the Table given in the Notification:- TABLE Serial No. Officers of the Directorate of Anti Evasion (Central Excise) Rank of the Officers of Central Excise. 1. Director. Collector 2. Deputy Director Deputy Collector 3. Assistant Director Assistant Collector 4. Senior Intelligence Officer Superintendent 5. Intelligence Officer Inspector 64. It will, therefore, be seen that the Director of the Directorate of Anti-Evasion has been invested with all the powers of a Collector. A Central Excise Officer under Section 2(b) of the Central Excise Act means any Officer of the Central Excise Department or any person invested by the Central Board of Excise and Customs "with any of the powers of a Central Excise Officer under this Act." 65. Therefore, the powers of the Collector of Central Excise under the Central Excise Act may be exercised by a person like the Director of Anti Evasion when the Director has been authority to exercise such power by the Notification. The Central Excise Act does not lay down that a Collector cannot exercise jurisdiction throughout India. The word 'Collector' has not been defined in the Act. ....
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....epartment of Central Excise), his appointment is to be made by way of notification after due publication in the Official Gazettee. This is the plain meaning of Section 2(b) of the Act, read with Rule 2(f) of the 2002, Rules. Learned counsel for the petitioner during the course of hearing has placed before us the Gazettee notification dated 22/5/2009, by which certain appointments were made in the Customs and Central Excise. The said Gazettee notification relates to appointment of officers of the Indian Revenue Services (Customs and Central Excise) to the Grade of Chief Commissioner of Customs and Central Excise which is to be necessarily gazetted looking to the rank and the post. The said notification has nothing to do with regard to the power of Central Excise Officer to be exercised by the Officers of the Central Excise Department. The Apex Court in the case of Pahwa Chemicals (P) Ltd Vs. Commissioner of Central Excise, New Delhi, 2005 (2) SCC 720, had occasion to consider the provisions of the Act, 1944. In the said case, a notice was issued by the Superintendent of Central Excise under Section11-A determining the duty and penalty. Appeal was filed by the appellants before....
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...., or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act. Thus, even an Additional Commissioner or an Assistant Collector or a Deputy Commissioner or any other Officer of the Central Excise or any person invested by the Board with the power of the Central Excise Officer would be a Central Excise Officer. Even though the Legislature made this change, the Board issued a Circular dated 27-2-1997 which reads as follows: "I am directed to say that the Board has decided to review the powers of adjudication with the objective that cases are decided expeditiously, there is even distribution of workload and various doubts in this regard are clarified. 2. In this connection, the following facts and legal position has been taken into consideration:- (i) By virtue of Clause (a) of Section 33 of Central Excise Act, 1944, Commissioners can adjudicate the cases of confiscation and penalty without limit. This power has been delegated to Deputy Commissioners by CBR Notification No.12-C.Ex., date....
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....machinery and building etc., liable to confiscation will not alter above powers of adjudication which will solely depend upon the amount of duty/Modvat credit involved on the offending goods. 5.1 In respect of cases covered under Category (A) of para 3 above, the show cause notices will be issued by the same rank of officers who will adjudicate them. Wherever the posts of Commissioner-I and Commissioner- II (Judicial) are in existence, the show cause notices will be issued by Commissioner-I. 5.2 In respect of cases covered under Category (B) of para 3 above, show cause notices will be issued by the Range Superintendent where they are to be adjudicated by the Assistant Commissioner and such notices will be issued by Assistant Commissioner when they are adjudicated by Dy. Commissioner/Addl. Commissioner/Commissioner. 5.3 In respect of cases covered under category (C) of Para 3 above, show cause notices will be issued by Assistant Commissioner. 6. The definition of expression 'Commissioner' contained in Rule 2(ii) was amended by Notification No. 11/92-C.E. (N.T.), dated 14-5-1992. Accordingly, an Additional Commissioner of Central Excise is not a Commissioner for the purpo....
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....es, 2002 is required to be published in the Gazette and since no notification was published in the Gazette, the exercise of jurisdiction by the Chief Commissioner, Central Excise, Ranchi was invalid. It is useful to note the facts of the said case in some detail. In the said case show cause notice dated 13/9/2006, was issued under Section 11A. The Commissioner, Central Excise, Dibrugarh dropped the charges levelled against the respondents M/s Khusi Aromatics and M/s. Kothari Products Ltd. The Revenue preferred the appeals before the Tribunal in terms of the review order passed on 15/2/2008 by a Committee. The Committee consists of Shri H.K. Saran, Chief Commissioner, Central Excise, Shillong Zone and Shri Amar Singh, Chief Commissioner, Central Excise, Ranchi. Before the Tribunal the assessee objected to the Constitution of the committee. It was contended that the members thereof were not authorised to act as such for want of appropriate notification conferring them the jurisdiction. Shri Amar Singh who was promoted as Chief Commissioner, Central Excise, Ranchi was assigned the additional charge of Chief Commissioner, Central Excise, Shillong. It was contended by the assessee that ....
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....e Central Excise, Shillong Zone. The Office Order No.23/2008 dated 31/1/2008 whereby the Chief Commissioner of Central Excise, Ranchi, had been assigned the additional charge of the Chief Commissioner of Central Excise, Shillong, for the limited purpose of reviewing the orders passed by the Commissioners of Dibrugarh and Shillong until further orders not only on the face of it was a make shift arrangement, but also not at all in conformity with the peremptory prescription of Rule 3(2) of the Rules. As by the said order the Chief Commissioner of Central Excise, Ranchi, was being endowed with the jurisdiction to act as the Chief Commissioner of Central Excise, Shillong, the same could not have been effected without a notification ordained by Rule 3(2). This coupled with the admitted absence of regular incumbent in the office of the Chief Commissioner of Central Excise, Shillong, in our opinion, has rendered the proceedings before the Committee comprised of Shri Amar Singh and Shri Hrishikesh Sharan a nullity." From the judgment of the Gauhati High Court as noted above, it is clear that there was no issue in the aforesaid case as to whether the Chief Commissioner, Ranchi was Centra....