TaxTMI 
TaxTMI 
1999 (7) TMI 89
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.... Satna for refund of this duty. The plea of the petitioner that he had not passed on the incidence of this duty to the customers was accepted by the Assistant Collector and he recorded his satisfaction in the detailed order dated 2-6-1992 that the said amount was refundable to the petitioner. He sent this order with the case file to the Collector, Customs and Central Excise, Raipur for "pre-audit" as required by standing order dated 7-8-1990 of the Excise Collector (Internal Audit). According to this standing order the following procedure was outlined : "The Divisional Assistant Collector should record his order, after scrutiny that the refund claim is prima facie admissible for amount indicated by him and then he should send the case file to the Audit cell of the Collectorate Headquarters for pre-audit of the refund claim. Audit Section of the Collecorate Headquarters should complete the pre-audit and return the refund claim file to the Divisional Assistant Collector within a period of 15 days from the date of receipt in order to enable the Assistant Collector to pass the final order. If there is a difference of opinion between the Divisional Assistant Collector and Deputy/Assi....
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....he consumer. In this case it is clear that the sale price is nothing but cum-duty price and, in arriving at assessable value, the element of excise duty paid at specific rate was being deducted from cum-duty price. As per the provisions of amended Section 11B(2) the Central excise duty paid and collected by the parties from the consumer is not refundable to the party but transferable to 'consumers welfare fund' constituted under Section 12C of Central Excises and Salt Act, 1944. File No. V(2804)18-4/91 is returned herewith for disposing of the refund claim as per Hon'ble Collector's observation, enumerated supra." 4.By the time this letter was received at Satna the Assistant Collector who had made the order dated 2-6-1992 had retired. The succeeding Assistant Collector again issued a show cause notice to the petitioner on 22-12-1992 giving him an opportunity of hearing on 7-1-1993. The petitioner raised an objection that a final order having been passed by the Assistant Collector on 2-6-1992 it cannot be reviewed or reconsidered. But the petitioner's claim has been rejected by the impugned order on the ground that it had passed on the incidence of excise duty to the customers....
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....ced. He contends that there was no hearing before officers who conducted the pre-audit. The quasi-judicial order passed by the Assistant Collector, could not be tested or interfered with by them. Such a procedure has the effect of destroying the independence of a quasi judicial authority. That order could not be reviewed by the Assistant Collector by the impugned order. This order follows the instructions of the auditor and it is a nullity. 8.On the other hand Mrs. Indira Nair. Advocate representing the respondents in her oral arguments and also in the written synopsis has defended the audit procedure and according to her these instructions have been issued under Section 37B of the Act to safeguard interest of the revenue. She has submitted the copy of circular dated 31-9-1990 of the Board with the synopsis. Before that the standing order dated 7-8-1990 of the Collector (Internal Audit) had been produced. In para 4 of the written synopsis it is mentioned : "the Collector after seeing the whole case including the statement and evidence had come to the conclusion that the adjudicating officer has not taken into consideration the relevant facts". The Assistant Collector in the impu....
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....officer is not bound by any administrative instructions. The questions of fact and law, which may be raised before him are required to be determined by him after full application of mind in an objective manner without feeling in any way controlled by any administrative instructions. 11.There is a direct authority of the Supreme Court on this point in Orient Paper Mills v. Union of India [1978 (2) E.L.T. (J345) (S.C.) = AIR 1969 SC 48. That was also a case where a circular issued by the Central Board of Revenue was in question. The decision impugned was that of the Collector under the Central Excises and Salt Act, 1944. The Supreme Court held as follows :- "If the power exercised by the Collector was a quasi judicial power - as we hold it to be - that power cannot be controlled by the directions issued by the Board. No authority however high placed can control the decision of a judicial or a quasi judicial authority. That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty a....
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.... to the Collector for his order. After pre-audit of the claim, the Divisional Assistant Collector should pass final order accordingly. This procedure robs the Assistant Collector of his statutory power and discretion and vests it in the Collector. This standing order is not and cannot be in exercise of any statutory power and has to be struck down. 15.A similar circular has been issued by the Central Board of Excise and Customs on 3l-9-l990. The learned counsel for the respondents says that it is in exercise of the power under Section 37B of the Act. On the face of this circular it does not appear to have been issued under this provision. It has been produced at the time of final hearing with the synopsis. This circular is in violation of the proviso (a) to Section 37B of the Act. There can be no instructions to dispose of a particular case in a particular manner. Under Section 37B of the Act no direction can be issued to any quasi judicial authority and the Board also cannot do so. This section has taken particular care to see that the authorities, who will be acting as quasi judicial authorities, are protected from any instruction or directions issued under this section. They ....
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....nion of India [1983 (12) E.L.T. 84 (Bom.)] the Bombay High Court held that if an order has been validly passed and duly signed after hearing the party in pursuance of the show cause notice then it cannot be said that still that order would have no force of law and would not come into operation, as long as the same was not communicated to the party concerned, because the communication of the order is merely an administrative act and the failure to inform passing of such order would not take away the effect of such order. The order passed by the Assistant Collector of central Excise comes into operation as soon as the same is signed and is not made dependent upon the communication of the same. In such a case no fresh show cause notice can be issued to the party concerned calling upon them to reagitate the matter merely because, the officer who signed the order has since retired and his successor thinks that the order of his predecessor was incorrect. 19.In Collector of Central Excise v. M.M. Rubber Company [1991 (55) E.L.T. 289 (S.C.)] the Supreme Court held that the order or decision of the authority comes into force or becomes operative or becomes an effective order or decision ....