TMI Blog2012 (11) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner in issuing the show cause notice. The submission of the learned counsel for the petitioner that prior permission of the adjudicating authority is required before issuing the show cause notice dated 01/10/2009 is without any substance. Additional Director General/Commissioner, Central Excise had every jurisdiction to issue the show cause notice dated 01/10/2009 and no ground has been made out to quash the same. - Writ Tax No.251 of 2012 - - - Dated:- 21-5-2012 - Ashok Bhushan And Prakash Krishna, JJ. For Appellant: Rajeev Chaddha For Respondent: S P Kesarwani, Sr. S.C., Bishwajit Bhattacharya JUDGEMENT Per: Ashok Bhushan: We have heard Shri A.K. Jain assisted by Shri Rajeev Chaddha and Shri Rajesh Jain for the petitioner, Shri Vishwajeet Bhattacharya, Additional Solicitor General of India and Shri S.P. Kesarwani for the respondents. This writ petition questions the jurisdiction of Additional Director General, Directorate General of Central Excise, Intelligence in issuing show cause notice dated 01/10/2009 to the petitioner initiating proceedings for determining the liability under Section 11A and other provisions of the Central Excise Act, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging it to be without jurisdiction. A writ of prohibition has been sought restraining the respondents from taking any coercive steps against the petitioner. Learned counsel for the petitioner contends that Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence had no jurisdiction to issue the show cause notice dated 01/10/2009 under Section 11A of the Act, 1944. It is submitted that Dr. Devender Singh, is not a "Central Excise Officer" within the meaning of Section 2(b) of the Act, 1944. It is further submitted that no notification regarding appointment of Dr. Devender Singh, Central Excise Officer has been published in the Official Gazettee as required by the Rule 3(1) of the 2002, Rules. It is submitted that as per 2002 Rules, the appointment of Central Excise Officer by Central Board of Excise and Customs can be made only by a notification which is required to be published in the Official Gazettee as per Rule 2(f) of the 2002, Rules and no notification of appointment of Dr. Devender Singh as a Central Excise Officer having been published in the Official Gazettee he had no jurisdiction to issue the show cause notice and it is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that the Board had already issued notification dated 26/6/2001, in exercise of power under Section 2(b) of the Act, 1944 read with sub-rule (1) of Rule 3 of the Central Excise Rules, 2001, appointing the officers specified in Column 2 as Central Excise Officer and investing them with all the powers, to be exercised by them throughout the territory of India, in which Additional Director General, Directorate General of Central Excise Intelligence was specified as Commissioner, Central Excise hence he was fully competent to issue the impugned show cause notice. It is further submitted that there was no necessity for publication of notification dated 26/6/2001 in the Gazettee. He submits that the 2002, Rules saves the things done under the 2001 Rules, hence investing them with all the powers by notification dated 26/6/2001 continues to operate and the submission that Devender Singh had no jurisdiction to issue the show cause notice is in correct. He submits that the Additional Director General, Directorate General of Central Excise Intelligence /Commissioner, Central Excise had every jurisdiction to issue the show cause notice and no prior approval of the adjudicatory auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing two categories of officers: (i) Any officer of the Central Excise Department, or (ii) 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 with any of the powers of a Central Excise Officer under this Act. The definition of "Central Excise Officer" as amended and as now exists under Section 2(b) of the Act, 1944 now consists of three categories which are as follows: "(i) Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Deputy Commissioner of Central Excise, Assistant Commissioner of Central Excise, or (ii) any other officer of the Central Excise Department, or (iii) 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 with any of the powers of a Central Excise Officer under this Act." Under the Central Excise and Salt Act, 1944, rules were framed namely; Central Excise Rules, 1944. Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appointment of Central Excise Officer is notified and published in the Gazettee as required under Rule 3 of the 2002, Rules, no officer can exercise jurisdiction under the Act, 1944. He submits that since the appointment of Dr. Devender Singh, Additional Director General, Directorate General of Central Excise, Intelligence has never been published in the Gazette, he had no jurisdiction to issue the show cause notice dated 01/10/2009 under Section 11-A of the Act, 1944. Section 2(b) of the Act, 1944 as was initially enacted and subsequently amended both have been noted above. In Section 2(b) of the Act, 1944 as was enacted, there were only two categories of persons who could be treated as Central Excise Officer namely: (i) any officer of the Central Excise Department, or (ii) any person (including an officer of the State Government) invested by the Board, the powers of Central Excise Officer. Both the aforesaid categories were joined by word "or". Similarly, in Section 2(b) of the Act, 1944 as it exists today, there are three categories which are joined by word "or". Although in the last category which was the second category, "investment" of powers by the Board is contemplated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition by amended Section are to be Central Excise Officer. The Section 2(b) of the Act, 1944 (unamended) clearly meant an Officer of the Central Excise Department to be the Central Excise Officer and no further action or any formality was required to be completed or contemplated. Investing of the power of the Central Excise Officer was contemplated when "any person" (including an officer of the State Government) was given the power of the Central Excise Officer. The object is loud and clear. When the power is to be vested in any person, who may be an officer of the State Government or an officer of any other Department, power is to be necessarily invested by the Board in such an officer because without investing the power he cannot function as Central Excise Officer under the Act, 1944. Rule 4 of the Rules, 1944 as quoted above contemplated appointment of such persons as it thinks fit by the Board to exercise all or any of the powers conferred by these Rules. It is relevant to note that Rule 4 of the Rules, 1944 did not contemplate appointment by a notification in the Gazettee. For the first time by 2002, Rules, Rule 2(f) and Rule 3 (1), appointment of such officer by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is contemplated only with regard to the persons who are not already officers of the Central Excise Department. Since investing of power by the Board is contemplated in only last category in the definition of Section 2 (b) of the Act, 1944 and all three categories are joined by the word "or" which is disjunctive. What is the intent and purpose of providing for investing with any of the powers by the Board as provided for in Section 2(b) of the Act,1944 needs to be found out. The word "invest" has been defined in LEGAL THESAURUS by WILLIAM C.BURTON in following words. "INVEST (Vest), verb appoint, authorize, charge, charter, commission, confer power, deferre, delegate, depute, empower, enable, endow with authority, entrust, furnish with rank, give a mandate, give authority, give power, grant authority, grant power, inaugurate, induct, install, instate, institute, license, mandare, name, nominate, ordain, permit, privilege put in commission, sanction". The concept of investing power by the Board presupposes that the person on whom the power is being vested does not have power to act as such. As observed above, Chief Commissioner of Central Excise or Commissioner of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to prefer an appeal under Section 53A, against a direction for investigation, as that itself is an appealable right independent of any decision or order which may be made or passed by the Commission. 43. It is a settled principle of law that the words "or" and "and" may be read as vice versa but not normally. "...You do sometimes read 'or' as 'and' in a statute... But you do not do it unless you are obliged because `or' does not generally mean 'and' and 'and' does not generally mean 'or'." [Green v. Premier Glynrhonwy Slate Co. (1928) 1 KB 561 p. 568)]. 44.As pointed out by Lord Halsbury, the reading of "or" as "and" is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done." (Mersey Docks and Harbour Board v. Henderson Bros. (1888) 13 AC 595 at pg 603). The Court adopted with approval Lord Halsbury's principle and in fact went further by cautioning against substitution of conjunctions in the case of Municipal Corporation of Delhi vs. Tek Chand Bhatia (1980) 1 SCC 158, where the Court held as under:(SCC p.163, para 11) 11. ......As Lord Halsbury L.C. observed in Mersey Docks Harbour Board v. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously refunded and that in the case of the aforesaid nature the provision of Section 11-AB would apply for effecting such recovery. 16.We have very carefully read the impugned judgment and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of Section 11AB of the Act and Rules 3 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. 17.A statutory provision is generally read down in order to save the said provision from bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Central Excise), New Delhi is under the Ministry of Finance, Department of Revenue. The Department of Revenue handles all matters relating to Central Board of Excise and Customs and Central Board of Direct Taxes. The Government of India in the Department of Revenue and Banking vide order dated September 22, 1976 set up a Directorate of Internal Audit for Customs and Central Excise Department and posts were sanctioned and Director of Inspection (Audit) to oversee the working of the internal audit organisation of the various customs houses and central excise collectorates was set up. It formed part of the Directorate of Inspection (Customs and Central Excise) including Directorate of Audit under the Department of Revenue as a separate department and not part of or a subordinate organisation of the Central Excise Department. There are four subordinate organisations detailed in the Allocation of Business Rules, 1961, namely, Income-tax Department, Customs Department, Central Excise Department and the Narcotics Department but they are separate and distinct from the Directorate general of Inspection and Audit (Customs Central Excise). By the aforesaid notification dated Janua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means the totality of the powers, administrative, territorial and pecuniary. This interpretation would effectuate the power under Section 2(b). 24. Section 2(b) of the Act defines a Central Excise Officer to mean besides an officer of the Central Excise Officer, any person invested with any of the powers of a Central Excise Officer under the Act. Every provision of a statute has to be given full effect to. The Court cannot place a construction on a provision which would tend to make it redundant. On the contrary, the Court's duty is to give effect to all portions of a statute. One of the principles for construction is that a statute ought to be so construed that, if possible, no word shall be superfluous, void or insignificant. If we accept the construction of the counsel for the petitioners, that would have the effect of ignoring the second part of Section 2(b) of the Act. Such a construction is plainly not permissible. 25. This Court has to take into consideration the object for which and intention with which such a power was conferred. Similar powers have been in existence in various fiscal statutes starting from Sea Customs Act, 1878, Section 6. In "Ram Kirpal v. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oiner", 1975(3) All. E.R. 1050 thus : ".... If it states at greater length what an expression used in other provisions in the statute 'means', it is no more than a drafting device to promote economy of language. It is a direction to the reader : 'Wherever you see this shorter expression in the statute you must treat it as being shorthand for the longer one.'. Alternatively an interpretation clause may be used by the draftsman not to define the meaning of an expression appearing in the statute but to extend it beyond the ordinary meaning which it would otherwise bear. An indication that this may be its purpose is given if it purports to state what the expression 'includes' instead of what it 'means'; but the substitution of the one verb for the other is not conclusive of its being a direction to the reader : 'Wherever you see this shorter expression in the statute you may treat it as bearing either its ordinary meaning or this other meaning which it would not ordinarily bear.' Where the words used in the shorter expression are in themselves too imprecise to give a clear indication of what is included in it, an explanation of their meaning which is introduced by the verb 'includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed) to be held, by judicial construction, to be ultra vires. (See Attorney General v. Great Eastern Railway Co. (1880) 5 AC 473 at p. 478). Relying upon the principles laid down by the House of Lords in the aforesaid case in my view unless the Statute in question had expressly prohibited conferring such concurrent jurisdiction, the notification cannot be declared to be ultra vires, particularly in view of the fact that such a power, even assuming that it does not directly flow from Rule 4 of the said Rules should be held to be an incidental or consequent upon those things which the legislature have authorised upon the authorities particularly in view of the object of the Act. The jurisdiction of an officer appointed by the Central Board should not also be interfered with unless it could be shown that either it is prohibited under the law or is contrary to law. In the instant case certainly it cannot be said that the petitioner would be in a most disadvantage position if notice were issued by 5 different Collectors than by one Collector in respect of all the areas and on the basis of a single show cause notice in respect of the self-same matter, and in my view it would not cause any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, the Director, Directorate of Anti-Evasion (Central Excise), Block No.8. It has been contended that the alleged evasion of excise duty has taken place all over India. Only a Collector of Central Excise has been given jurisdiction under the proviso to Section 11-A to issue a show cause notice where an assessee is guilty of fraud, collusion or any wilful misstatement or suppression of fact or contravention of any of the provisions of the Excise Act as a result of which excise duty has not been levied or paid or has been short levied or short paid. Sub-section (2) of Section 11-A makes it clear that the Collector of Central Excise is the only authority which can determine the amount of excise due in such a contingency. It has been argued that under the provisions of the Central Excise Rules, a Collector exercises its jurisdiction in certain areas. The jurisdictions of the Collectors have been specified in Rule 2. It has, therefore, been contended that one single person cannot be invested with the jurisdiction of a Collector all over India. 63. I am unable to uphold this contention. All that the impugned Notification dated 27-3-1986 has done is to invest certain Officers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2001 has been annexed where the Additional Director General has been specified to be in the rank of Commissioner, Central Excise. Dr. Devender Singh, who issued the impugned show cause notice dated 01/10/2009 was Commissioner of Central Excise and for Commissioner, Central Excise it is not necessary that he be invested with the power of Central Excise Officer and his appointment be published in the Official Gazettee. The Commissioner, Central Excise is fully entitled to exercise all powers of Commissioner under the Act, 1944. The notification dated 26/6/2001, may have been issued for the convenience of the officers, and investing of the powers may be required for the persons who are not working in the Central Excise Department. The notification dated 26/6/2001, contains several designations of the officers who were not working in the Department of Central Excise and for them the appointment was necessary by the Board for investing the power. Since the notification dated 26/6/2001 was issued by the Board under the 2001 Rules, all action done under the 2001, Rules, have been saved in the 2002, Rules as noticed above. The said notification still continues to hold the field an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection could not have taken away the jurisdiction to issue the show cause notice or to the adjudicating authority. It is useful to quote paragraphs,5,6,10,11 and 12 of the said judgment. 5. No stay was granted in this Appeal, therefore, the Commissioner (Appeals) adjudicated and confirmed the demand by an Order dated 17th July, 2002. The Appellants then filed an Appeal before CEGAT wherein the only contention taken was that the Superintendent had no jurisdiction to issue show-cause-notices and the Deputy Commissioner had no jurisdiction to adjudicate. CEGAT has dismissed the Appeal by the Order dated 25-6-2003. The Appellants have filed Civil Appeal No. 406 of 2004 against this Order. 6. It must be mentioned that the only point agitated is that the Superintendent had no jurisdiction to issue the show-cause-notices and that the Deputy Commissioner had no jurisdiction to adjudicate. This is because in an earlier round it has already been held by CEGAT, by its order dated 17.10.2000 that the appellants are not entitled to the benefit of the notifications. Against that Order Civil Appeal No.4050 of 2001 is pending before this Court. 10. Section 2(b) of the Act defines a "Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders are not passed upto 28-2-1997, will be adjudicated as provided hereinafter :- (A) All cases involving fraud, collusion, any willful mis-statement, suppression of facts, or contravention of Central Excise Act/Rules made thereunder with intent to evade payment of duty and/or where extended period has been invoked in show cause notices, (including MODVAT cases, Rule 9(2) cases of this type) will be adjudicated by :- (Amt. of duty involved) Commissioners Without limit Addl. Commissioners Upto Rs. 10 lakhs (B) In respect of cases which do not fall under the category (A) above, will be adjudicated by :- (Amt. of duty involved) Commissioners Without limit Addl. Commissioners/ above Rs. 2 lakhs and upto Dy. Commissioners Rs. 10 lakhs Assistant Commissioner Upto Rs. 2 lakhs Notwithstanding the powers of Assistant Commissioners to adjudicate the cases involving duty amount upto Rs. 2 lakhs only as above, all cases of determination of valuation and/or classification other than those covered under Category (A) above, will be adjudicated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular may please be acknowledged. 10. The trade and field formations may be suitably informed." By clauses 3(A) and 5.1 of this Circular, the Board is directing that in cases of fraud, collusion, willful misstatement or suppression of facts the notice must be issued and adjudication must take place by the Commissioner without limit and by the Deputy Commissioner up to a limit of Rs.10,00,000/-. Thereafter the Board by another Circular dated 13-8-1997 reiterated the above position. 11. The Appellants place strong reliance upon these two Circulars and submit that by virtue of these Circulars the Superintendent had no jurisdiction to issue the show-cause-notices and that the Deputy Commissioner had no jurisdiction to adjudicate. 12.As noted above, the Legislature has purposely omitted the word "Collector" from the proviso to Section 11-A and replaced it with the words "Central Excise Officer". It is the Act which confers jurisdiction on the officer(s) concerned. The Act permits any Central Excise Officer to issue the show-cause notices even in cases where there are allegations of fraud, collusion, willful misstatement and suppression of facts. The question there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraphs 15,18,21 and 22. "15. Admittedly, there was no notification Under Rule 3(2) to confer on Shri Amar Singh, the then Chief Commissioner, Central Excise, Ranchi the jurisdiction to act as Chief Commissioner Shillong as a member of the aforementioned committee. 18.In view of the definition of "notification" provided in Rule 2(f) of the Rules, the same would clearly signify that the same has to be published in the official gazette. Such is the peremptory mandate of the above legal provision that any omission in that regard has to be assuredly viewed to vitiate the resultant act. 21. In view of the authoritative pronouncement as above and having regard to the scheme of the Act and the underlying purpose of the notification to acquaint all concerned about the composition of the Review Committee for the sake of transparency, fairness and predictability of its decisions we are of the unhesitant opinion that the word "may" used in Rule 3(2) of the Rules is of mandatory connotation leaving the Department with no discretion what so ever but to notify the jurisdiction of the Officers as and when sought to be conferred. This applies per force in the matter of constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the issue and held that Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence having been authorised to act as a Commissioner, Central Excise was a Central Excise Officer, within the meaning of Section 2(b) of the Act, 1944 and was fully authorised to issue the show cause notice. Thus, the above judgment of the Gauhati High Court is clearly distinguishable and does not help the petitioner in the present case. The submission which has been next pressed by the learned counsel for the petitioner is that the authority who had issued the show cause notice ought to have obtained prior permission from the adjudicating authority before issuing the show cause notice. The impugned show cause notice dated 01/10/2009, directed the petitioner and others as mentioned therein to show cause before the Commissioner, Central Excise, Kanpur who was the adjudicating authority. The Additional Director General, Directorate General, Central Excise Intelligence having been specified as a Commissioner, Central Excise was fully entitled to issue the show cause notice under Section 11-A of the Act,1944 he being a Central Excise Officer. No such provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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