2011 (2) TMI 184 - HC - Central Excise

Classification - Search and seizure - Confiscation - Delegation of power by way of circular - Circular number 752/68/03-CX., dated 1-1-2003 - Section 33 does not provide any restriction as to how the power is to be conferred - The Board can confer powers under Section 33 by means of a circular - The conferment of powers under Section 33 of the Act by the Circular is legal. Non mention of Rule in the SCN - The sub-rule of Rule 25 of the Rules that is said to be contravened is not mentioned though Rule 25 is mentioned - The Joint Commissioner can exercise power under Section 33 of the Act provided it is conferred upon him - The notice and the orders are not invalid for the reasons that the sub-rules of Rule 25 of the Rules were not mentioned - Decided in the favour of revenue

Summary

Issues:
1. Whether a show cause notice and the orders passed on its basis can be quashed for a defect in the notice without there being any prejudice to the affected party.
2. Whether the Joint Commissioner could exercise the power under Section 33 of the Act.
3. Whether the Central Board of Excise and Customs can delegate the power under Section 33 of the Act by a circular.
4. Whether the impugned orders are liable to be set aside on the ground that neither in the notice, nor in the order sub-rules of the Rule 25 of the Excise Rules, 1944 have been mentioned.

Analysis:

1. Joint Commissioner's Power under Section 33:
The Joint Commissioner, being a central excise officer, can exercise powers under Section 33 of the Act if conferred upon him by the Board. The Act does not limit how the power under Section 33 is to be conferred, and the absence of such a limitation allows for conferment of power by a circular, as ruled by the High Court.

2. Delegation of Power by Circular:
The Circular dated 1-1-2003, conferring powers on the Joint Commissioner under Section 33 of the Act, was upheld as legal by the High Court. While the Assessee argued that powers under Section 33 could only be conferred by notifications and not by a circular, the Court found no such restriction in the Act, allowing for the conferment of powers by means of a circular.

3. Validity of Notice & Orders:
The Assessee contended that the notice and orders should be set aside due to the lack of specific sub-rule references from Rule 25 in the notice. However, the Court held that since the notice contained the necessary ingredients of the contravened sub-rules and the Assessee had full knowledge of the violations, no prejudice was caused. As a result, the defect in mentioning the sub-rule did not invalidate the notice or the orders.

Conclusion:
The High Court concluded that the Joint Commissioner could exercise power under Section 33, the Board could delegate such power by circular, and a notice or order cannot be invalidated for a defect unless prejudice is caused. As no prejudice was established in this case, the appeal was dismissed, upholding the validity of the notice and orders despite the absence of specific sub-rule references.