TaxTMI 
TaxTMI 
1995 (9) TMI 71
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.... Section 11A of the Act for allegedly short levy of excise duty by pointing out that on the basis of such under-valuation large amount of approximately Rs. 44 crores of Central Excise was to be recovered, details of which are not required to be given here. 2.On the basis of the said show cause notices, the matters were being heard in the office of the 3rd Respondent at Bombay. Thereafter, in a part-heard adjudication, on the basis of order dated 21st March, 1989 passed by the Central Board of Excise and Customs (Respondent No. 4), the matters were transferred to the Director General of Inspection, New Delhi (Respondent No. 2). 3.The Petitioners have challenged the said transfer orders by filing this petition. They have prayed that Respondents be directed forthwith to withdraw and cancel the Notification No. 159/84-C.E., dated 10th July, 1984 (Exhibit `M') and the transfer order dated 21st March, 1989 (Exhibit `U') and also to restrain the Respondents from taking any steps or proceedings pursuant to the show cause notices dated 28th July, 1983 (Exhibit `E') and 30th July, 1983 (Exhibit `I'). 4.The other prayers are with regard to validity of Rule 5 of the Central Excise Val....
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....1 of 1990, dated 5th January, 1990 rescinded the Order No. 1089-CX. 6, dated 21st March, 1989 (Exhibit `U') and simultaneously passed an order assigning the aforesaid three cases and other cases pending with the Collectorates of Central Excise, Hyderabad and Meerut to the Collector of Central Excise, Delhi, by Order No. 5/90/Central Excise, dated 5th January, 1990. 8.The learned Counsel for the Petitioners vehemently submitted that the order dated 10th July, 1984 (Exhibit `M') transferring the cases from the Bombay Collectorate was illegal and bad. However, that challenge may not survive because of the recession of that order by order dated 5th January, 1990. The vehemently submitted that order dated 5th January, 1990 is illegal and void as it is passed (i) in violation of the principles of natural justice as it is passed without giving any hearing to the Petitioners and (ii) in breach of the interim order passed by this Court on 18th December, 1989. We also note that even though Order No. 2 of 1990, dated 5th January, 1990 is not challenged by filing a separate writ petition or amending the present petition, we have permitted the learned Counsel to raise the contention challeng....
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....ners, however, submitted that even though it was open to the Respondents to rescind the order dated 21st March, 1989, it was not open to them to pass Order No. 5, dated 5th January, 1990 altering the status quo by transferring the cases to the Collectorate at New Delhi because by such action it has rendered it impossible for the Respondents to comply with the interim directions of allowing the 3rd Respondent to hear the proceedings pursuant to the aforesaid show cause notices. 12.In our view, this contention is also without any substance. By the interim order this Court has not directed Respondent No. 3 to proceed with the matter, but Court has merely observed that it would be open to the Respondents to allow Respondent No. 3 to proceed with the said proceedings. That means, a discretion or option was given to the Respondents and this cannot be termed as a direction that Respondent No. 3 should proceed with the matter. It is also to be noted that this Court has not granted any interim relief in terms of prayer clause (f) of the Petition directing the Respondents to maintain status quo with regard to the proceedings initiated on the basis of the show cause notices. Hence, by pass....
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....not to have been clubbed for hearing with other tax evaders. If an opportunity of hearing was given to them they would have been able to explain that they are not tax evaders. To say that the Petitioners are tax evaders, which by itself is stigma, without giving an opportunity of hearing to them would itself be violative of the principles of natural justice. In the present case it would be unfair not to have afforded(4) an opportunity of hearing to the Petitioners when there was material which could have been brought to the attention of the Board that the show cause notices should not be assigned to the Collector at Delhi. For this purpose, reliance is placed by the Petitioners upon the decision of the Supreme Court in Union of India v. Win Chadha, AIR 1993 SC. 1082 @ 1102, paragraph 82. 14.As against this, the learned Counsel appearing on behalf of the Respondents vehemently submitted as under :- In order to have a uniform adjudication and centralising all(i) such cases involving similar issues together, the Board had taken a policy decision to transfer all matters of tax evasion by cigarette companies to a senior-most officer of the Department. This would avoid inconsist....
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....ith by one single authority. The Petitioners are only interested in delaying the further(v) proceedings because of large amount involved in the matter. Because of delay the petitioners gain interest and the Respondents are losing interest on a large amount. Considering the facts of the case, even if there is an(vi) alleged breach of the principles of natural justice, yet, this Court may not exercise its writ jurisdiction under Article 226 of the Constitution. 15.At this stage, we would note that the learned Counsel for the parties have submitted their written submissions. Office is directed to keep the written submissions on record. 16.For appreciating the contentions raised by the learned counsel for the parties, we would first refer to the relevant provisions of the Central Excises and Salt Act, 1944. 17.Section 2(b) defines "Central Excise Officer" to mean "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 (54 of 1963) with any of the powers of a Central Excise Officer under this Act". Rule 2(ii)(A) ....
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....er these Rules. Sub-rule (2) of Rule 6 provides that subject to the provisions of sub-rule (1), the Deputy Collector of Central Excise appointed by the Central Board of Excise and Customs, may, within his territorial jurisdiction, perform all or any of the duties, or exercise all or any of the powers, assigned under these rules to an officer subordinate to him. 19.Considering the aforesaid provisions, we are of the view that the Board has been conferred with the jurisdiction to invest a person with any of the powers of a Central Excise Officer under the Act. The Legislature has authorised the Board to confer on such person all or any one or more powers, which would include the power of a Collector or Assistant Collector under Section 11A. There is nothing in the Act to suggest that jurisdiction to be exercised by the Collector or any other officer of Central Excise, specifically authorised under Rule 4 of Central Excise Rules, must be confined to a certain District or State or a particular area. It follows that under Section 2(b) of the Act read with Rule 4 of the Rules, an Appointed Authority could be invested with an all India territorial jurisdiction. 20.In view of Section....
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....ility of abuse of the power cannot thus be assumed." Similarly, in the case of Duncan Agro Industries Ltd. v. Union of India, 1989 (39) E.L.T. 211 (Del.), the Division Bench of the Delhi High Court rejected similar contentions and upheld similar notification. After considering the provisions of Section 2(b) of the Act and the Rules, the Court also rejected the contention that whenever powers are conferred on the designated officer as Collector of Central Excise in Section 11A, it cannot be invested on any other officer of the Central Excise Department. The Court observed that there was no warrant to give a limited or a narrow meaning to the language employed by the legislature in the second part of Section 2(b) so as to restrict to the investing of powers under Sections 19, 21, 25 or 26 as is suggested and not Sec. 11A. The Court further held that there is no territorial limitation laid in the statute and more than one officer is envisaged in the statute who has territorial jurisdiction over the land or premises of the producer of any excisable goods. The Court further held that there is no vested right in a manufacturer or producer to be assessed by a particular functionary. Th....
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....cases is upheld by the various Courts and the Supreme Court has not interfered with those orders. 25.It is, however, submitted that the petitioners' case is required to be dealt with independently by the Court since the petition was filed as early as 1989. We would, therefore, deal with the contentions raised by the learned Counsel for the petitioners and decide whether any show cause notice was required to be issued before transferring the case from the Collector of Central Excise, Bombay to the Director of Anti-evasion, Central Excise, New Delhi or subsequently rescinding that notification and issuing fresh notification transferring the case to the Collector of Central Excise, Delhi. In our view, the act of the Central Board of Excise and Customs is merely an administrative act and the transfer of cases is solely based on administrative exigencies. It has no civil consequences which affects the rights of the petitioners. It does not decide any question involved in the matter. The Central Board decided that all cases involving similar questions should be dealt with and decided by one authority so that there may not be conflicting view and that the matters can be expeditiously d....
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....and this rule may be jettisoned in very exceptional circumstances where compulsive necessity so demands. The learned Counsel for the petitioners submitted that if the petitioners were given an opportunity to present and point out their case before the authority that there was no tax evasion on their part as there was complete disclosure on their part in the year 1980 that the petitioner-company had started accepting deposit, the authority would not have transferred the cases. The learned Counsel for the petitioners, therefore, submitted that the Petitioners would have pointed out that Section 11A was not applicable. In our view, whether interest on large deposits received by the Petitioners from its wholesale buyers required to be added for determining the market value of the goods is to be adjudicated by the competent authority. That issue cannot be adjudicated at the time of transferring the case from one Collector to another Collector. On the contrary, that would be the main point which would be required to be decided by the adjudicating authority. The adjudicating authority is the Collector and not the Central Board of Excise and Customs which has transferred the cases. 29.I....
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.... matter at Bombay, the respondents are prepared to do so. However, the learned Counsel for the petitioners submitted that the petitioners are not interested in seeing that the Collector, Central Excise and Customs come to Bombay and decide the matter at Bombay as the petitioners are interested in seeing that the respondents follow the principles of natural justice. In our view, on principle, it would not make any difference whether the matter is decided by the Central Excise Collector, Delhi, or the Central Excise Collector, Bombay. The Petitioners are not having any substantive right that the matters should be decided only by the Collector, Central Excise, Bombay. 31.With regard to the principles of natural justice, in the case of W.N. Chadha (supra), the Supreme Court has specifically held that the principle of law that could be deduced from the various decisions is "whether the decision was purely an administrative one and a full-fledged enquiry followed is relevant and significant factor in deciding whether at that stage, there ought to be a hearing which the statute did not expressly grant". Applying the aforesaid principle, in the present case, a full-fledged enquiry is to....