TaxTMI 
TaxTMI 
Whether in absence of any specific penal provisions in Section 3(3) of the Additional Duties of Excise (Goods of a Special Importance) Act, 1957, the provisions relating to confiscation and imposition of penalty are applicable to man-made fabrics which are 'excisable goods' finding mention in Schedu
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....129) ELT 94 (Tri - Mum)] referred the above said issue to the Gujarat High Court and the Hon'ble High Court vide its order dated 22-01-2002 answered the question in favour of revenue and against the assessee. The receipt of the circular may please be acknowledged. F.No.390/63/2002-JC Feb 8 15:57 2002 Order dated 22/01/2002 for CECGR/1/2001 Page 1 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CE, CUSTOMS GOLD CONTROLL REF. No 1 of 2001 For Approval and Signature: Hon'ble MR. JUSTIC R.K. ABICHANDANI and Hon'ble MR. JUSTICE K.A. PUJ 1. Whether Reporters of Local Papers may be allowed to see the : YES judgements? YES 2. To be referred to the Reporter or not? YES 3. Whether Their Lordships wish to see the fair copy of the : NO judgement? NO 4. Whether this case involves a substantiar question of law as to the : NO interpretation of the Constitution of India, 1950 of any Order made thereunder? NO 5. Whether it is to be circulated to the Civil Judge? : NO NO COMM. OF CENTRAL EXCISE Versus ASHOK FASHION LTD Appearance : 1. CE, CUSTOMS GOLD CONTROLL REF. No.1 of 2001 MR ASIM J PANDYA for Petitioner NOTICE SERVED for Respondents No.1-2 C....
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....of additional duty of excise to the tune of Rs. 52,717=00 was, therefore, made. 3. The demand came to be confirmed by the Collector, which order was challenged before the Tribunal. The Tribunal found that the physical verification had been done by the panchas and that there was a statement recorded of the appellant's authorised signatory Dineshbhai Dahyabhai Shah accepting the mistake which had resulted in the breach of the provisions of the Central Excise Rules. The Tribunal found that the levy of duty was rightly made. As regards the penalty of Rs. 10,000=00 imposed on the appellant under Rule 173Q ( 1) of the Central Excise Rules, 1944 by the Collector, Central Excise & Customs, under his order dated 8th August 1994, the Tribunal, placing reliance on the decision of the Delhi High Court in Pioneer Silk Mills vs. Union of India, reported in 1996 (67) ECR 131, held that no such penalty could be levied. The appeal was, therefore, partly allowed in respect of the penalty imposed 999on the appellant, while confirming the demand of duty under the said order made by the Collector. 3.1. The Collector, Central Excise & Customs had, under the said order, also imposed penalty on Dineshbh....
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.... Court, the provisions of levying penalty must be explicit and therefore, the provisions regarding confiscation and penalty could not be invoked in respect of levy and collection of additional duties of excise payable under section 3(3) of the Act. 5. The learned standing counsel appearing for the Revenue submitted that section 3(3) of the Additional Duties of Excise Act adopts, by reference, the provisions of the Central Excises & Salt Act, 1944 and the Rules made thereunder and in view of such specific mandate, the legislation having already been made by incorporating the provisions of the Act of 1944 and the Rules made thereunder by reference, it was not necessary to enumerate all the assessment, confiscation and penalty provisions which were applicable to the levy and collection of central excise duty under the Act of 1944 and the Rules framed thereunder. In other words, according to him, by virtue of section 3(3) of the Additional Duties of Excise Act, all the provisions of assessment, confiscation and penalty were automatically applicable to the goods subjected to additional duty, which were described in the first schedule to the Additional Duties of Excise Act. He also subm....
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....dditional Duties Act, is an instance of "referential legislation", which legislative device was quite well known and the principles applicable to it fairly well settled. After referring the two topics of 'referential legislation", the Supreme Court held that section 3(3) of the Act of 1957 did not incorporate in that Act any specific provisions of the Central Excise Act, 1944, but only declared generally that the provisions of the Act of 1944 shall apply "so far as may be", that is, to the extent necessary and practical for the purposes of the Act of 1957 as well. In paragraph 51 of the judgement, it was held that, "There is no reason or logic way all the incidents attaching under the earlier legislation, in so far as they are not clearly inconsistent with the later one should not be extended to the later legislation as well", (emphasis added). In paragraph 52 of the judgement, full and literal effect to the language of section 3(3) which had the effect not only of attracting the procedural provisions of the Act of 1944, but also all its other provisions, including those contained in the definitions. [b] A Division Bench judgement of this Court in Maheshwari Mills Ltd. v. Union of....
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....ecified in sub-section (1)."7. It will be noticed from sub-section (3) of section 3 of the Additional Duties Act that all the provisions of the Central Excise Act, 1944 and the Rules made thereunder including those relating to refunds and exemptions are made applicable, so far as may be, in relation to the levy and collection of additional duty of excise. The provisions of the Central Excise Act, 1944 and the Rules made thereunder are made applicable to the additional duty of excise in the same manner and extent to which they apply in relation to the levy and collection of the duties of excise on the goods specified in column 3 of the First Schedule referred to in section 3(1) of the Additional Duties Act. This is so stated, because, all the goods specified in the said First Schedule were also subjected to duties of excise at the rates set forth in the Schedule to the Central Excise Tariff of 1985, under section 3 of the Central Excise Act, 1944, which provision also lays down that such duties of excise shall be "levied and collected" in such manner as may be prescribed. 7.1 The expression "so far as may be" in section 3(3) would exclude the applicability of only such of the provi....
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....of the Constitution of India provides that no tax shall be levied or collected except by authority of law. The words "levied or collected" in Article 265 have wider connotation and would embrace the entire process of imposing the tax till its realisation. Power to provide for collection of tax would include power to devise means and methods of collection of tax. The power to levy a penalty for proper enforcement of the taxing statute flows from the power to impose a tax as an ancillary power to ensure proper realisation of the taxes. 8.1. In Khazan Chand v. State of Jammu & Kashmir, reported in (1984) 2 SCC 456, it was held that the taxing Power will also comprehend within it, inter alia, the power to provide for collection of tax including prescribing the methods of recovery of the amount of tax due if the person liable to pay the tax does not voluntarily pay it. The power to make a law with respect to a tax also includes a power to make provisions in the relevant statute with respect to all matters ancillary and incidental to the levy, assessment, collection and recovery of tax. 8.2. In Commissioner of Income Tax v. M/s Bhikaji Dadabhai & Co,. reported in AIR 1961 SC 1265, it w....
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...., the issue of notices requiring payment, the manner in which the duties shall payable, and the recovery of duty not paid". 9.2 If excisable goods are deposited in or removed from any specified place in contravention of Rule 9(1) of the Central Excise Rules, the producer or manufacturer is made liable to pay penalty which may exceed upto Rs. 2,000=00 and the goods would be liable to confiscation over and above the liability to pay the duty. Then there are provisions imposing penalty for misdeclarations as laid dqwn in Rules 92E (iv), 96M (iii), 96S (iv), 96ZL (iii), Rule 173Q provides for 'confiscation and penalty' in respect of the excisable goods notified under Rule 173A (1) of Chapter VII-A of the Rules, and Chapter XXII of the Excise Rules deals with penalties and confiscations. Accordingly, the acts and omissions covered by Rules 173Q and 209 entail confiscation of goods and imposition of a penalty to the extent prescribed thereunder. There are also provisions of penalty under Rule 209A and for general penalty, in Rule 210. 9.3 It will thus be seen that penalty provisions are an integral part of assessment and collection of duties of which the necessary adjuncts are confisca....