TaxTMI 
TaxTMI 
1993 (12) TMI 63
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....allowable to the wholesale dealer and only thereafter wholesale price was arrived at. Subsequently, by a notice dated 3-10-1989 the Manufacturing Company was asked to show cause as to why differential duty on the two models referred in the notice should not be demanded under Section 11A of the Act. The notice also proposed to impose penalty on the Manufacturing Company. The notice stated that the Manufacturing Company suppressed the cost of raw materials and using of certain items/components which are essential for the manufacture of the T.Vs. and there was an attempt to undervalue the assessable value of T.Vs. to fall below Rs. 5,000/- in order to evade higher rate of duty. Prior to the issuance of the above notice, the factory premises of the Manufacturing Company was searched and various records, files and documents were seized on 20-3-1989. On 14-3-1989 the administrative premises of the Manufacturing Company was searched and many documents were seized. The writ petition further states that the second respondent carried out investigation with regard to the value at which the T.V. sets were sold by the Manufacturing Company, throughout India without the knowledge of the Company ....
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....ction 12A providing for the powers of Central Excise Officers. Rule 4 was referred, which contemplates the appointment of the officers by the Board. Thereafter the learned Counsel relied upon several notifications issued by the Board investing a few officers with all India jurisdiction. For example Notification No. 429/86 dated 30-9-1986 was referred to point out that the Collector of Central Excise, Pune was invested with the powers of the Collector, Central Excise, to be exercised by him throughout the territory of India for the purposes of investigation and adjudication of such cases as may from time to time be assigned to him by the Board. A few more similar notifications were also referred to by the learned Counsel to illustrate how the powers are exercised with reference to all India and that in the absence of such a notification the Collector at Bangalore cannot stretch his jurisdiction to investigate the facts outside his territorial jurisdiction. Therefore it was contended that the material collected by the second respondent cannot be relied upon by him and the show cause notice issued was without jurisdiction. 4. The learned Counsel for the respondents, on the other hand....
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.... agent or manufacturer, are situate; " I find considerable force in this submission of the Standing Counsel for the Central Government. The second respondent is vested with the jurisdiction to enforce the provisions of the Act in respect of the excisable goods manufactured within his territorial jurisdiction. However the tax evasion activity may involve investigation not only within the said territory but also outside. If the manufacturer at Bangalore and a dealer at Bombay join hands to evolve a device in order to reduce the tax liability, the authority at Bangalore necessarily should have the power to investigate not only at Bangalore but have the appropriate material collected from outside his territorial jurisdiction. It cannot be the purpose of the law that in every case the second respondent should approach the Board to invest him with the further power to cover the area of investigation situated beyond his ordinary territorial jurisdiction. Second respondent is not interfering in any manner with the jurisdiction of a similar authority situated elsewhere. In fact Section 14 indicates that any Central Excise Officer duly empowered by the Central Government in that behalf shal....
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....ause of action arises. 5. The statement that the jurisdiction is territorial-cum-functional has to be understood as a jurisdiction related to the cause of action. The decision of the Delhi High Court in Duncan Agro Industries Ltd. v. Union of India [1989 (39) E.L.T. 211] in no way supports the contention of Mr. Chanderkumar. The power of investigation and collecting materials which may lead to further enquiry or adjudication is part of the machinery created by the law to prevent tax evasion. The machinery provisions in a fiscal legislation are to be liberally construed so as to effectuate the purpose behind the said machinery. Therefore, I am of the view that when the cause of action arises within the territorial jurisdiction of a particular officer, he is competent to have the matter investigated even in an area outside his jurisdiction. It is not a case of stretching the jurisdiction beyond his territory at all. The substance of the jurisdiction is to adjudicate on the question of taxability or tax evasion. This adjudication can be properly done in many cases by getting investigations done elsewhere to gather relevant material. It was then contended by the learned Counsel for th....