TaxTMI 
TaxTMI 
2000 (11) TMI 238
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.... 2.All the appeals were heard on 14-6-1999 on the issue of jurisdiction of the Collector of Central Excise, Calcutta-I to adjudicate the case and the orders were reserved on this issue. 3.Shri S.K. Bagaria, ld. Adv. appearing for the appellants submitted that the demand of duty has been confirmed against M/s. T & I Ltd. whose factory is situated at Tezpur in the State of Assam and admittedly the Collector of Central Excise, Calcutta-I did not have any jurisdiction over the appellants' factory. He further submitted that the factory of M/s. Mayur Exports was under the jurisdiction of Calcutta-II Collectorate, factory of M/s. Bagaria Udyog was also under the jurisdiction of Calcutta-II Collectorate. M/s. Bihar Ispat Engineers (P) Ltd. were having their factory which fell under the jurisdiction of Coimbatore Collectorate in the State of Tamil Nadu. It was only the Registered Office of M/s. T & I Ltd. and other appellants which were situated within the geographical jurisdiction of the Collector of Central Excise, Calcutta-I which factor did not confer any jurisdiction on the said Collector to initiate the proceedings or to adjudicate the same as regards the demand of duty against th....
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....sociated small industries, the head office of the said appellant maintained at 19, R.N. Mukherjee Road, Calcutta along with the head office of M/s. Mayur Export and Bagaria Udyog maintained at the same premises and the godown of these appellants at 20, British India Street, Calcutta were searched on 10-1-1990 jointly by the officers of Anti Evasion Units, Central Excise Calcutta-II Collectorate and C.P.C. Calcutta-I Collectorate. During the search, number of incriminating records and documents were seized from the factories as well as the head office and godown. Finished goods valued approx. Rs. 7,15,000/- were also seized from the factory of Mayur Export and Bagaria Udyog respectively and the said factories are admittedly in the State of West Bengal falling under the jurisdiction of Central Excise Calcutta. He submits that as three of the units fall under the jurisdiction of Calcutta, the territorial jurisdiction between Collectorate-I and Collectorate-II, which for the sake of better administration will not make much of a difference. He further submits that as the head office of the units fell under the jurisdiction of Calcutta-I, the matter was specifically taken up by the Princ....
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....ants does not go to the root of jurisdiction and the validity of the order cannot be challenged on that ground alone. In this connection he placed strong reliance on the decision of the Hon'ble Supreme Court in the case of Hiralal Patni v. Sri Kalinath - 1962 AIR 199 (S.C.) wherein rejecting the objection of the territorial jurisdiction raised by the appellant in that case it was observed by their Lordships that the objection to the territorial jurisdiction is one which does not go to the competence of the Court and can therefore be waived. He also relied upon another decision of the Tribunal in the case of Nandy Metal Mills v. C.C.E. Bhubaneswar - 1996 (85) E.L.T. 199 (Tribunal), wherein it was held that the Commissioner of Central Excise having jurisdiction over the area from where the excisable goods were seized as having been cleared without payment of duty from the factory located under the jurisdiction of another Central Excise Commissionerate was perfectly legal and valid. He also relied upon Calcutta High Court's decision in the case of I.T.C. Ltd. v. Union of India - 1991 (53) E.L.T. 234 (Calcutta). Wherein it was observed that dividing of territories is only for the sake ....
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....rst appellants. It is only on the ground of the territorial and geographical jurisdiction that the order has been assailed. For deciding the validity of the order on the point of jurisdiction we have to keep in mind the fact that collective show cause notices were issued to five different assessees spread in different areas. Proceedings which were for the clubbing of clearances of all the units cannot be divided to be adjudicated by different Central Excise officers having jurisdiction over different factories. There has to be joint proceedings in respect of the manufacturers and that the Collector was the competent authority under the law to do so, is not disputed. It is seen from the note sheets produced on record by the Revenue that the question of jurisdiction was considered by the Principal Commissioner prior to issuance of the show cause notice and it was decided that the Commissioner of Calcutta-I would be the best person to issue the show cause notice as the head office of M/s. Trade & Industries (P) Ltd. (main accused) fell under the jurisdiction of Calcutta-I Collectorate. We find a lot of force in the submissions made by the Revenue that as the incriminating documents on....
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....isdiction does not go to the root of the jurisdiction and validity cannot be challenged on that ground alone. The Court in the said case has also observed that decision of the Privy Council in the case of 13, Ind. App. 134 (P.C.) is an authority for the proposition that consent or waiver can cure defect of jurisdiction, but cannot cure inherent lack of jurisdiction. By having not raised and agitated the point of jurisdiction before the Collector Calcutta-I at the time of adjudication of the case itself, the appellants are deemed to have consented to the jurisdiction of the Collector to adjudicate the case. Unless it is seen that the authority who passed the order was entirely lacking any jurisdiction i.e. it was incompetent to adjudicate the case which would turn the subsequent proceedings as null and void, the challenge to the order on the basis of territorial jurisdiction at the appeals stage cannot be accepted. It is a well settled law that consent of parties could not operate to confer jurisdiction on a Court which was incompetent to try the suit, but the said rule of law will not operate in the cases like the present where there can be no question of inherent lack of jurisdict....
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....criminating documents were recovered therefrom. 11.We also note that there is no plausible explanation coming from the appellants' as to why the point of territorial jurisdiction was not raised before the Collector and as to why if the appellants felt that the appellant was not competent on the point of geographical demarcation to adjudicate the matter, he was allowed to proceed ahead with the adjudication. Having done so, they have conferred their consent on the adjudicating authority and having done so, they have cured the defect of jurisdiction, if any. By participating in the adjudication proceedings the appellants are deemed to have waived this objection to the territorial jurisdiction of the Commissioner. The Hon'ble Supreme Court in the case of Hiralal has observed that it is well settled that the objection as to local jurisdiction of a Court does not stand on the same footing as an objection to the competence of a Court to try a case. Whereas competence of a Court to try a case goes to the very root of the jurisdiction, objection to the local jurisdiction of a Court can be waived. 12.It is thus clear that the appellants having participated in the adjudication proceedi....
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....assembled and installed is within the jurisdiction of Commissioner Calcutta. (6) Clearances of dummies, if so clubbed, with the clearances of the first appellant, during the course of each of the financial years involved will take the first apellant out of the scope of the SSI exemption notification. (7) Hence the demand of duty against the first appellant. (8) Show cause notice for demand of duty and for imposition of penalties on all the appellants issued by CCE Calcutta-I (now Cal. IV). (9) Appellants joined the proceedings. No dispute regarding lack of jurisdiction was raised by the first appellant at the adjudication stage. Demand of duty has been confirmed against the 1st appellant and the penalties imposed on all the appellants by the adjudicating authority. (10) Question of jurisdiction has been raised now at the appellate stage by the first appellant. 16.Learned advocate for appellants' pleas are as follows : (1) Cen....
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....ch Commissioner will be defeated because each Central Excise Commissioner has always inherent jurisdiction to demand Central Excise duty on manufactured goods which have allegedly not paid duty. Therefore, lack of territorial jurisdiction of a Commissioner in the context of the provisions of the Central Excise Act and Rules thereunder, implies inherent lack of jurisdiction as well. (9) Accordingly, non-raising of this issue in the course of adjudication proceedings does not deprive the appellants to raise the issue at the appellate stage. Jurisdiction cannot be conferred by any outside authority, as has been done by the Chief Commissioner in the instant case. He has no power to do so under the Act. (10) It is the duty of every adjudicating authority to satisfy itself that it has a jurisdiction under the Act to proceed with adjudication thereof, even if such a question is not raised by the parties because jurisdiction is a question of law under the relevant Act and not a matter of consent between the parties. 17.Pleas of the counsel for Revenue has been set out fully in the learned sister's proposed ord....
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....on to adjudicate upon recovery of duty on, and confiscation of, the seized goods as part of cause of action has occurred in the Commissionerate. This is what happned in Nandy Metal Rolling Mills [1996 (85) E.L.T. 199] relied upon by the learned advocate for the Revenue when the Tribunal observed as follows : - "5. Having regard to the contentions from both the sides, we are unable to accept the aforesaid plea of the learned Advocate. Since the officers of Visakhapatnam Collectorate had reason to believe that the goods found in the truck were without payment of duty and therefore, were liable to confiscation, a seizure was made. Since the goods were detected within the jurisdiction of Visakhapatnam Collectorate the officers of Visakhapatnam Collectorate were the proper officers for causing the seizure and no fault can be found by their action of seizure and correspondingly even a show cause notice can also be issued consequent to such a seizure. In any case, we do not pronounce upon the validity of the show cause notice issued by the Visakhapatnam Collectorate inasmuch as that issue is not before us." 21. It is also to be noted that in that case (Nandi Metal) show cause notice....
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....ting authority was holding the additional charge of the jurisdiction concerned. 24.Learned Advocate, Shri Bagaria's reliance on Apex Court's judgment in Sales Tax cases supra is more appropriate because Sales Tax Acts defining jurisdiction of each officer separately are more akin to the Central Excise Act, being taxation enactments than to the Civil Procedure Code. Provisions and principles of CPC may be considered in those areas and on those aspects when no specific provision for the same exists in special enactments like the Central Excise Act, 1944. 25.In fact, the very fact that the lower Revenue authorities submitted the file to the Principal Collector for deciding as to who should issue the show cause notice and to whom the cause was to be shown; shows that they had serious reservation about the correctness of the jurisdiction. Principal Collector's order cannot cure that defect because he has no authority or power to confer jurisdiction on a person who does not have it. 26.Question of jurisdiction goes to the root of the matter. Concerned Commissioner lacked inherent jurisdiction on the basis of allegations in the show cause. Appellants are entitled in law to raise ....
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....th 24 Parganas (excluding Barrackpore sub-division of North 24 Parganas District) of the State of West Bengal". Hence, Collector of Central Excise, Calcutta-I cannot excercise the power and authority of "Collector" in an area falling outside his jurisdiction. The ld. Advocate states that the present proceedings were initiated for clubbing the clearances of other appellants with the clearances of M/s. T & I Limited. If at all there was any scope for such clubbing, this could be done by the Central Excise authorities having jurisdiction over the factory of M/s. T & I Limited at Tezpur and assuming, though denying, that any of the other appellants was a dummy of M/s. T & I Limited, it could only result in clubbing their clearances with the clearances from Tezpur factory of M/s. T & I Limited. As the Collector of Central Excise, Calcutta-I has no power and authority or jurisdiction over the Tezpur factory of M/s. T & I Limited and the customers sites where the goods were stated to have been erected and/or installed, he had no competence whatsoever to initiate or decide any such proceeding. 30.1Referring to the provisions of Rule 4 of the Central Excise Rules, 1944, the ld. Advocate ....
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....ssioner can exercise jurisdiction anywhere in the country as he does not suffer from "lack of inherent jurisdiction", is totally contrary to the specific statutory provisions of the Central Excise Law and such an interpretation will lead to chaotic situation and absurd results. 30.2In support of the above submissions, the ld. Advocate relies upon the following case law :- (i) Commissioner of Sales Tax v. Sarjoo Prasad Ram Kumar : 1976 (37) STC 533 (S.C.); (ii) M/s. I.T.I. Equatorial Satcom Limited v. CCE, - 2001 (136) E.L.T. 156 (Tribunal) = 2000 (36) RLT 565 (CEGAT) ; and (iii) M/s. Coimbatore Aero Based Control Systems Pvt. Ltd. v. CCE : 2000 (116) E.L.T. 193 (Tribunal) = 2000 (36) RLT 692 (CEGAT). 30.3The ld. Advocate fairly concedes that the plea of "lack of jurisdiction" was not raised either before the Adjudicating authority or the Hon'ble High Court of Calcutta. According to him, the issue relating to jurisdiction, power and competence can be raised at any stage as it goes to the root of the matter and there can be no waiver in this reg....
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....cation was issued in that regard and as such any order passed by the Commissioner of Central Excise, Calcutta-I in respect of the matters pertaining to the territory beyond his jurisdiction, is void ab initio and as such illegal. 35.An argument has been advanced by the ld. Advocate for the Revenue to the effect that the Adjudicating authority in the instant case although does not have jurisdiction over the geographical area wherein the factories are located/manufacturing activity was undertaken, that authority being "Collector", it has inherent jurisdiction and as such can exercise that power specially when the question of lack of jurisdiction was not raised at the original stage. It should be clearly noted that we are dealing with a matter which is governed by the Central Excise Law wherein the expression "Collector" has been clearly defined with reference to a specified geographical area. Therefore, in my view, the authority who has territorial jurisdiction alone is competent and has the power to adjudicate the cases falling in that geographical area although Collectors of other areas are of equal status. Viewed from this angle, I consider that Adjudicating authority in the in....