TMI Blog2012 (8) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... of the items in terms of Notification No. 24/2005, dated 1-3-2005. Some of the items imported by the petitioners attracted concessional rate of duty. 2.2 On 13-8-2005, a team of Director General of Anti Evasion, Preventive Wing visited the factory premises of the petitioner company, seized documents and recorded statements of persons present. This was on the premise that according to the Revenue authorities, the final product manufactured by the petitioners was classifiable under Sub-Heading 9001.1000 and therefore, petitioners were not entitled to benefit of exemption Notification No. 24/2005. Communications in this respect were issued by the respondents dated 25-8-2005 and 26-9-2005. Against such communications, the petitioners approached this Court by filing Special Civil Application No. 19506/2005. Said petition was disposed of by order dated 27-10-2005. The Court allowed the petition, quashed the impugned communications primarily on the ground that such communications were issued in breach of principles of natural justice without hearing the petitioners. 2.3 The Deputy Commissioner of Central Excise, Silvassa issued a show cause notice on 15-2-2006 calling upon the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Central Excise. 2.8 It is the case of the petitioners that in such order the Commissioner also decided the question of classification of final product though same was never part of the show cause notice proceedings. Since the very issue of appropriate classification of goods in question was pending before the Deputy Commissioner, a Division Bench of this Court by an interim order dated 15-5-2008 while issuing notice desired that the Deputy Commissioner should take a final decision thereon preferably one month from the date of order. The Division Bench thereafter, passed yet another order on 16-5-2008 in Civil Application No. 6314/2008 and stated thus : Heard Mr. P.R. Nanavati for the petitioners and Mr. R.M. Chhaya, learned Standing Counsel for the Central Government. The Deputy Commissioner, Central Excise, Division-III, Silvassa shall adjudicate the show cause notice dated 15-2-2006 after giving the petitioners an opportunity of being heard, in accordance with law and without being influenced by the order dated 31-3-2008 passed by the Additional Director General of Revenue Intelligence, Ahmedabad. The order shall be passed as expeditiously as possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Appearing for the petitioners, learned counsel Shri Arun Mehta vehemently contended that order dated 31-3-2008 passed by the Commissioner is without authority of law. He assailed the order on following grounds : (1) That in the impugned order the Commissioner decided the question of classification of goods which was not part of the show cause notice at all. The Commissioner thus travelled beyond the scope of the show cause notice itself. His order was therefore, without jurisdiction and also in breach of principles of natural justice. (2) In the impugned order the Commissioner has noted that he is deciding the question of classification for guidance of the Deputy Commissioner before whom such issue was pending. The Commissioner could not have taken for consideration any issue which was otherwise pending before the Deputy Commissioner in exercise of his statutory powers. (3) The show cause notice was issued by the Additional Director General of DRI, Ahmedabad whereas the final decision was taken by the Commissioner of Central Excise and Customs which also could not have been done. 6.1 With respect to order passed by the Deputy Commissioner dated 17-6-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned leaving it open to the petitioners to avail all statutory remedies. 8. Having thus heard learned counsel for the parties, we may first examine the legality of the order dated 31-3-2008 passed by the Commissioner of Central Excise and Customs, Vapi. By such order he confirmed part of the duty, penalty and interest demand raised under the show cause notice dated 21-9-2006. Such show cause notice was issued calling upon the petitioners why differential customs duty of ₹ 2,80,84,430/- equivalent to the duty forgone on the goods imported under concessional rate of duty under Notification No. 24/2005 be not recovered with consequential effects such as charging of interest, penalties and confiscation. A perusal of the show cause notice itself suggests that the petitioners were to be denied such concessional rate of duty since according to the respondents the final product was classifiable under Chapter Sub-Heading No. 9001.1000. In the show cause notice itself detailed tentative grounds were indicated for such purpose. The show cause notice also refers to certain materials collected by the department to indicate that the correct classification would be under Chapter Sub-Headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in AIR 1958 SC 667, Constitution Bench of the Supreme Court quashed an assessment order by the Commercial Tax Officer when it was found that he had acted under the instructions of the higher authority. It was observed as under : 18. From the detailed narration of the facts regarding this particular assessment it is quite clear that the first respondent did not exercise his own judgment in the matter of the assessment in question. Even though he was convinced to the contrary, he asked for the instructions of the Assistant Commissioner (C.S.) and followed the same and assessed the appellants to sales-tax in respect of the disputed transactions. The order which he ultimately passed on January 15, 1955, further showed that he was merely voicing the opinion of the Assistant Commissioner (C.S.) without any conviction of his own and the only thing he had to say in regard to the various grounds mentioned in the letters dated November 21, 1953, and June 19, 1954, was that they appeared to him to be not at all satisfactory . This was hardly a satisfactory way of dealing with the matter. If the Assistant Commissioner (C.S.) had been dealing with the same he could have by all means gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asi-judicial functions and they have to act in independent manner. Collector cannot control such powers. It was observed : 4. Now it is common ground, it being admitted in the statement of case filed on behalf of the respondent that the paper was assessed to duty in accordance with the instructions from the Collector. The main question is whether an assessment made by a subordinate officer in accordance with the instructions issued by the Collector to whom an appeal lay against the order of that subordinate officer can be called a valid assessment in the eye of law. As has been pointed out in Orient Paper Mills Ltd. v. Union of India, (1969) 1 SCR 245 = (AIR 1969 SC 48) in which the parties were the same as before us now no authority, however high, can control the decision of a judicial or a quasi-judicial authority that being the essence of our judicial system. In the present case, when the assessment is to be made by the Deputy Superintendent or the Assistant Collector, the Collector, to whom an appeal lies against his order of assessment, cannot control or fetter his judgment in the matter of assessment. If the Collector issues directions by which the Deputy Superintendent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rary to the scheme of the Act and the nature of the power conferred upon the authorities invested with quasi-judicial power. 13. In case of Gujarat Gas Co. Ltd. v. Joint Commissioner of Income-tax (Assessment) reported in 245 ITR 84, this Court observed as under : In our opinion, the view which we are taking is also fortified by the proviso to Section 119 which specifically provides that CBDT cannot issue instructions to the Income Tax authority to make a particular assessment or to dispose of a particular case in a particular manner as well as not to interfere with the discretion of the Commissioner in exercise of his appellate functions. 14. When the question of classification of goods was pending before the Deputy Commissioner, in our opinion, therefore, it was wholly inappropriate on part of the Commissioner to proceed to decide the question through elaborate discussion. It was precisely for this reason that this Court by order dated 16-5-2008 directed the Deputy Commissioner to take a decision on the question of classification without being influenced by the observations made by the Commissioner. In any case, the Commissioner in our opinion proceeded to decide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the principles of natural justice or against the statutory provisions. We do not intend to take exhaustive stock of such grounds. Suffice it to record that maintainability of writ petition itself is not in question. What is to be decided is whether such writ petition should be entertained in facts of a given case. In other words, it is not the jurisdiction but the question of propriety of entertaining a writ petition which is in question in the present case. Facts are rather gross. We would therefore, not like to relegate the petitioner to appellate remedy. We say so for following reasons : (1) As already noted, the Commissioner had already taken a decision on what he thought was appropriate classification of the product in question. He classified the product under Chapter Sub-Heading No. 9001.1000. This was at a stage when the question of classification was pointedly at issue before the Deputy Commissioner in the pending show cause notice proceedings. Conscious of such pendency he still went ahead to decide the issue on the pretext that such decision would guide the Deputy Commissioner in the pending proceedings. (2) When this Court noticed such dichotomy, dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of the duty waived which issue is pending before the Commissioner and the question of classification, which can be decided only by the Deputy Commissioner, in the present case we provide that the Commissioner shall not take a fresh decision till the Deputy Commissioner decides the issue of classification in the remand proceedings which we intend to provide in this order itself. 20. Order of the Deputy commissioner dated 17-6-2008 is also set aside. He shall decide the entire issue of classification arising out of show cause notice dated 21-9-2006 afresh. Order of Commissioner under which detailed observations were made with respect to appropriate classification has already been quashed. The Deputy Commissioner shall not take recourse to any portion of the order which in any case now stands annulled. He shall take a fresh decision in accordance with law. 21. The above directions would dispose of Special Civil Application No. 7536/2008. 22. Insofar as Special Civil Application No. 13096/2008 is concerned, amount of ₹ 7,50,000/- and ₹ 1,67,814/- deposited before the Registry of this Court shall be released in favour of Respondent No. 2 along with accrued intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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