TMI Blog2003 (11) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... nfiscation proceedings taken against the respondents and the penalty imposed upon them were totally without the authority of law and were rightly set aside by the Tribunal. Appeal dismissed. - 4914 of 1997 - - - Dated:- 25-11-2003 - V.N. Khare, C.J.I., S.B. Sinha and Dr. A.R. Lakshmanan, JJ. [Order]. - The short question that arises for our consideration in these appeals, which arises from the judgments and orders dated 10-2-1997 and 26-3-1996, as regards jurisdiction of the authorities under the Central Excise Act, whether it is permissible to resort to penalty proceedings or forfeiture of goods for non-payment of additional duty in terms of the Additional Duties of Excise (Goods of Special Importance) Act , 1957 (for short 'the Act') by taking recourse to the provisions of the Central Excise Act and Rules framed thereunder. 2.The respondents herein carry on business of manufacture of man made fabrics. They have alleged to have misdisclosed the composition of certain sorts of fabrics. They were further alleged to have under valued goods by not paying duty on to the amount realised through debit notes. The collector, by his order dated 17th November, 1987, confirmed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal mandate requires a clear authority of law for imposition for the same. Article 265 of the Constitution provides that no tax shall be levied or collected except by authortity of law. The authority has to be specific and explicit and expressly provided. The Act created liability for additional duty for excise, but created no liability for any penalty. That being so, the confiscation proceedings against the respondents were unwarranted and without authority of law. 7.The Parliament by reason of Section 63(a) of the Finance Act, 1994 (Act No. 32 of 1994) substituted sub-section (3) of Section 3 of the said Act, which now reads as under : "Levy and collection of Additional Duties :- …… …… The provisions of the (Central Excise Act, 1944) (1 of 1944), and the rules made thereunder, including those relating to refunds, exemptions from duty, offences and penalties, shall, so far as may be, apply in relation to the levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1)." 8.A comparison of the amended provisions with the unamended ones would clearly demonstrate that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k be carrying the theory of referential legislation too far to assume that Section 9(2) of the Central Act, 1956, purported to authorise the State Legislatures to impose liabilities in the nature of additional tax or penalties leaving their rates and conditions for their imposition also to be determined by the State Legislatures as and when the State Legislatures decided to impose or amend them. It is evident that these differ from State to State, and, in the same State, at different times. A conferment of such an uncontrolled power upon the State Legislatures could, if it was really intended, be said to travel beyond the provice of permissible delegated Legislation on the principles laid down long ago by this Court in Re Delhi Laws's case (supra) as no guidelines are given in Section 9(2) about the nature, conditions, or extent of penalties leviable. If such a power was really conferred would it not amount to an abdication of an essential legislative function with respect to a matter found as Item 92A of the Union List I of the Seventh Schedule so that, according to Article 246(1) of our Constitution, Parliament has exclusive power to legislate on a topic covered by it? As this qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary adjuncts are confiscation and penalty without which the imposition of taxes will lack teeth and become ineffective. If power to impose penalty for violation of the obligation to pay additional duty of excise is excluded in respect of the goods enumerated in the First Schedule of the Additional Duties Act, then these taxation provisions would be reduced to a donation drive in respect of these very items for which duty of excise is also imposed under the Central Excise Act, 1944 and the Rules made thereunder and violation of which would entail both confiscation and penalty." 14.It further referred to the amended provisions of the said Act, as would appear from the following : It will be noticed from sub-section (3) of Section 3 of the Additional Duties Act that all the provisions of the Central Excise Act, 1944 and the Rules made thereunder including those relating to refunds and exemptions are made applicable, so far as may be, in relation to the levy and collection of additional duty of excise. The provisions of the Central Excise Act, 1944 and the Rules made thereunder are made applicable to the additional duty of excise in the same manner and extent to which they ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoke the court's interpretative role to make a new offence. Making of legislation is not the job of the judiciary. Making of a penal legislation by the judiciary is strictly out of its bound. However, when the law working in the field is clear then what is necessary for it is to find out as to whether any offence has been created or not. Once it is held that the subject matter comes within the purview of the law, the Court may not go further and say by interpretative reasoning that the same is not so created." 19.It is now a well settled principles of law that expropriatory legislation must be strictly construed (see M/s. D.L.F. Qutab Enclave Complex Educational Charitable Trust v. State of Haryana and Ors., reported in AIR 2003 SC 1648). It is further trite that a penal statute must receive strict construction. 20.The matter may be considered from another angle. The Parliament by reason of the Amending Act 32 of 1994 consciously brought in the expression offences and penalties' in sub-section (3) of Section 3 of the Act. The mischief rule, if applied, would clearly show that such amendment was brought with a view to remedy the defect contained in the unamended provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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