TMI Blog1983 (10) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... of these machines was 18,000 tons. of paper per annum. Two more machines styled as Machine Nos. 3 and 4 were installed on 23rd March, 1964 and 29th August, 1965, respectively. In the year 1965, the plaintiff Company installed a machine called 'laminating machine' for manufacturing various types of Board paper, called Duplex Board, Triplex Board, Ace Cote Art Boards etc. which are processed from manufactured paper. This laminating machine which was commissioned on 12th June, 1965, was called 'Machine No. 5' till a 5th machine for production of paper was installed with effect from 11th February, 1972. Thereafter, the machine manufacturing board paper came to be called 'Laminating Machine. 3. Section 3 of the Central Excises and Salt Act, 1944, (hereinafter referred to as the 'Act') authorizes the Central Government to levy and collect excise duty on all the excisable goods other than salt, which are produced by the manufacturers in India at the rates fixed in the First Schedule. The excise duty includes the basic duty and the special excise duty imposed by the Annual Finance Acts. Paper is Tariff Item No. 17 of the First Schedule. Rule 8 of the Central Excise Rules, 1944, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted to the Assistant Collector Central Excise Nagpur, on 13/14 November, 1969 refund claim for Rs. 38,818.59 Ps. The Assistant Collector, Central Excise, I.D.O., Nagpur rejected the claim on the ground that the paper used for laminating purposes had inter alia come from Machine Nos. 1 and 2 the production from which was not entitled to the concession under the relevant notification and since the plaintiff Company had not maintained any log-book in respect of the laminating machine showing the quantity of paper utilised out of the machine other than Machine Nos. 1 and 2, the plaintiff Company was not entitled to the said concession. 6. Being aggrieved by this order, the plaintiff Company preferred an appeal to the Collector, Central Excise, Nagpur. The Collector upheld the order of the Assistant Collector holding that as the plaintiff Company had not maintained log-book for laminating machine showing the exact quantity of paper produced on Machine No. 4 and laminated on Machine No. 5, the concession under the relevant notification cannot be granted. The revision petition filed by the plaintiff Company to the Joint Secretary, Ministry of Finance against the order-in-appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the contention that the suit was barred by limitation either by virtue of Section 40(2) of the Act or under Article 58 or Article 113 of the Indian Limitation Act. He also rejected the contention that after having exhausted the special remedies provided by the Act, which is a complete Code in itself, it was not open to the plaintiff Company to file a suit to reagitate the question before the Court and the jurisdiction of the Civil Court stood ousted in view of the provisions of Section 40 of the Act. On the basis of these findings, the learned Trial Judge decreed the claim to the extent of Rs. 21,560.83 only rejecting the rest as being barred by limitation though granting a declaration that the entire production on laminating machine was entitled to concession. Being aggrieved by the rejection of the most of its claim, the plaintiff Company has preferred First Appeal No. 11 of 1978 while the Union of India has preferred First Appeal No. 61 of 1978 to challenge the decree to the extent of the relief given to the plaintiff Company. 9. Obviously, the learned Trial Judge erred in granting a declaration that the entire production of laminating machine was entitled to the concession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement. The relevant averments are as follows : "Thus from the above facts, it may kindly be seen that the claim of the plaintiffs was rejected only on the ground namely that they had not been able to substantiate their plea that the papers used for laminated purposes was exclusively produced on machine Nos. 3 and 4, the production of which is certainly entitled to concession in view of the judgment and order of the High Court referred to above." (Emphasis supplied). 10. The order to which reference is made in the written statement was passed in Special Civil Application No. 498 of 1970, which the plaintiff Company was obliged to file because the officers of the department of Revenue and Insurance interpreted the above referred notifications to mean that the concession was available only to the first enlargement of capacity and first increase in production effected by any factory after 1st March, 1964 and was not available for subsequent enlargements of capacity and increase in production and on the basis of this wrong interpretation granted concession to the plaintiff Company only to the production on machine No. 3 and denied the same in respect of production on Machines N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborate procedure made in the Madras General Sales Tax Act, which provided a complete Code for redress of grievances of the parties aggrieved by the assessment, straightway filed a suit to challenge the assessment. Their Lordships observed as follows in Para 12 of the judgment. "It is necessary to add that these observations, though made in somewhat wide terms, do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant taxing statute, its validity can be challenged by suit on the ground that it is correct on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with. Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. Similarly, if an appropriate authority has acted in violation of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1969 SC 78), the Supreme Court summarised the law on this point and laid down the following principles: "(1) Where the statute gives a finality to the orders of the special tribunals the Civil Court's jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Court would normally do in a suit. Such provision, however, does not exclude, those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case, it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 3(2) could be challenged in a Civil Court in an appeal. The Supreme Court held that as the Special Officer had based his determination on a report of his Assistant, who had considered the entry in the Settlement Register of another village, the determination was based on no evidence with the result that it was in violation of the fundamental principles of judicial procedure. 16. In Union of India v. Tarachand Gupta Bros. 1983 ELT 1456 (S.C.) = (AIR 1971 SC 1958), the Supreme Court held that the words 'Decision or Order passed by an officer of Customs under this Act' used in Section 188 of the Sea Customs Act (which is analogous to Section 35(1) of the Act) must mean a real and not a purported determination. Their Lordships also emphasised that the determination which takes into consideration, factors which the officer has no right to take into account, is no determination. While laying down this proposition, their Lordships observed that, that was also the view taken by the Courts in England and referred to the decision of Lord Reid in Anisminic Ltd. v. Foreign Compensation Commission reported in [(1969) 1 All. ER 208)]. 17. In the case of Anisminic Ltd. where al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as such entitled to decide that question wrongly as it is to decide it rightly." (Emphasis supplied) 18. It is contended on behalf of the plaintiff Company, and in our view quite rightly, that all the excise authorities, whose orders are challenged in the suit, refused to take into consideration the most material evidence on the question involved, thus acting in breach of the fundamental-principles of judicial procedure and hence the determination made by them was no determination at all. As mentioned above, it is an admitted position that the excise authorities rejected the claim of the plaintiff Company for refund of the excess excise duty solely on the ground that the plaintiff Company was not able to substantiate its plea that the paper used for laminated purposes was exclusively produced on machines Nos. 3 and 4. All the excise authorities, the Assistant Collector of the Central Excise I.T.D., the Collector of Central Excise, M.P. and Vidarbha, Nagpur and the Joint Secretary, Min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers to ascertain whether this could be verified from the records maintained by us. That the officers who come to verify this, were shown sufficient evidence in support of our claim. The records maintained by us since inception were produced before them. 4. The Collector does not appear to have been correctly informed in regard to the records maintained by us for our laminating machine. Even since the commencement of the production of our laminating machine, all the requisite records necessary to indicate production of the machine, consumption of paper etc., have been maintained by us which were duly produced before the Excise authorities. Further, we can furnish sufficient evidence to support the fact that almost all the production of our laminating machine was out of the paper produced on machines No. III and IV." 20. Brijendranath Shambhu, witness No. 2 for the plaintiff Company, who was working as Manager (Sales) in the Ballarpur Paper Mills and in that capacity was in charge of central excise assessment, appeal and other proceedings, has specifically asserted in his evidence that he had produced the files Arts. Nos. 5 to 8 (Exhs. 74 to 78) and log-books Arts. Nos. 9 to 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders are challenged. The determination made by these officers, therefore, was no determination at all. The orders, therefore, are nullities being without jurisdiction in the wider sense of the term and hence, the jurisdiction of the Civil Court to entertain and try the suit filed by the plaintiff Company was not ousted. 21. The next limb of the argument on the question of exclusion of the jurisdiction of the Civil Court is based on Section 40 of the Act. Section 40, which was substituted for the old section by Amendment Act No. 22 of 1973, which came into force on 19-5-1973 reads as follows:- "Protection of action taken under the Act :- (1) No suit, prosecution or other legal proceedings shall lie against the Central Government or any officer of the Central Government or a State Government for anything which is done, or intended to be done, in good faith, in pursuance of this Act or any rule made thereunder. (2) No proceeding, other than a suit, shall be commenced against the Central Government or any officer of the Central Government or a State Government for anything done or purported to have been done in pursuance of this Act or any rule made thereunder, without giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Limitation Act, 1963, and as the suit is not filed within one year from the date of the order of the Assistant Collector, it is barred by limitation. Article 100 of the Limitation Act consists of two parts. The first relating to a suit for setting aside a judicial order and the second relating to a suit to set aside any act or order of officer of Government in official capacity. The first part is analogous to Article 13 of the Limitation Act, 1908, while the second part is analogous to Article 14 of the said enactment. 25. In support of the proposition that the limitation would start from the date of the order of the Assistant Collector and not from the date of the order passed by the Joint Secretary in the revision application, reliance is sought to be placed on two decisions of this Court in Ganesh Shesho v. Secretary of State [MR 1920 Bom 105(1)] and Bruusgaard Kiosteruds Damp Skibs Aktieselskab v. Secretary of State (AIR 1940 Bom 294). In the first case, the suit was filed by the plaintiff for a declaration that the proceedings of the revenue authority in respect of the forfeiture of his land and in respect of its subsequent disposal were illegal and ultra vires and not bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the question of limitation practically resolves itself. They further observed that even if Article 14 of the Limitation Act was applicable to the suit, the suit was not barred by time because exlcuding the period of statutory notice under Section 80, it was filed within one year from the date of the final order, passed by the Board of Revenue rejecting the plaintiff's appeal. They, however, proceeded to hold that the case was governed by Article 62 of the Limitation Act, 1908. The Supreme Court confirmed this decision in an appeal preferred by the Union of India. In the penultimate paragraph of the judgment, which is reported in AIR 1971 SC 1558: (1971 Tax LR 706). Their Lordships have observed as follows (Para 25) : "In this view the order was in non-compliance of the provisions of the statute and, therefore, was covered by the exceptions laid down in Mask Co.'s case, 67 Ind App 222: (AIR 1940 PC 105). It was not an order in respect of which the Collector was invested with jurisdiction. That being so, the provision excluding the jurisdiction of Civil Courts was not applicable. Indeed, the order was nullity and Article 14 of the Limitation Act of 1908 could not be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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