TMI Blog2000 (11) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... llector of Central Excise, Calcutta-I to adjudicate the case and the orders were reserved on this issue. 3.Shri S.K. Bagaria, ld. Adv. appearing for the appellants submitted that the demand of duty has been confirmed against M/s. T I Ltd. whose factory is situated at Tezpur in the State of Assam and admittedly the Collector of Central Excise, Calcutta-I did not have any jurisdiction over the appellants' factory. He further submitted that the factory of M/s. Mayur Exports was under the jurisdiction of Calcutta-II Collectorate, factory of M/s. Bagaria Udyog was also under the jurisdiction of Calcutta-II Collectorate. M/s. Bihar Ispat Engineers (P) Ltd. were having their factory which fell under the jurisdiction of Coimbatore Collectorate in the State of Tamil Nadu. It was only the Registered Office of M/s. T I Ltd. and other appellants which were situated within the geographical jurisdiction of the Collector of Central Excise, Calcutta-I which factor did not confer any jurisdiction on the said Collector to initiate the proceedings or to adjudicate the same as regards the demand of duty against the appellant. If at all any clubbing of clearances of all the units was required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .N. Mukherjee Road, Calcutta along with the head office of M/s. Mayur Export and Bagaria Udyog maintained at the same premises and the godown of these appellants at 20, British India Street, Calcutta were searched on 10-1-1990 jointly by the officers of Anti Evasion Units, Central Excise Calcutta-II Collectorate and C.P.C. Calcutta-I Collectorate. During the search, number of incriminating records and documents were seized from the factories as well as the head office and godown. Finished goods valued approx. Rs. 7,15,000/- were also seized from the factory of Mayur Export and Bagaria Udyog respectively and the said factories are admittedly in the State of West Bengal falling under the jurisdiction of Central Excise Calcutta. He submits that as three of the units fall under the jurisdiction of Calcutta, the territorial jurisdiction between Collectorate-I and Collectorate-II, which for the sake of better administration will not make much of a difference. He further submits that as the head office of the units fell under the jurisdiction of Calcutta-I, the matter was specifically taken up by the Principal Commissioner, who vide his noting dated 5-7-1990 made on the file directed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged on that ground alone. In this connection he placed strong reliance on the decision of the Hon'ble Supreme Court in the case of Hiralal Patni v. Sri Kalinath - 1962 AIR 199 (S.C.) wherein rejecting the objection of the territorial jurisdiction raised by the appellant in that case it was observed by their Lordships that the objection to the territorial jurisdiction is one which does not go to the competence of the Court and can therefore be waived. He also relied upon another decision of the Tribunal in the case of Nandy Metal Mills v. C.C.E. Bhubaneswar - 1996 (85) E.L.T. 199 (Tribunal), wherein it was held that the Commissioner of Central Excise having jurisdiction over the area from where the excisable goods were seized as having been cleared without payment of duty from the factory located under the jurisdiction of another Central Excise Commissionerate was perfectly legal and valid. He also relied upon Calcutta High Court's decision in the case of I.T.C. Ltd. v. Union of India - 1991 (53) E.L.T. 234 (Calcutta). Wherein it was observed that dividing of territories is only for the sake of administrative purposes. As such he submitted that there was no lack of jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the order has been assailed. For deciding the validity of the order on the point of jurisdiction we have to keep in mind the fact that collective show cause notices were issued to five different assessees spread in different areas. Proceedings which were for the clubbing of clearances of all the units cannot be divided to be adjudicated by different Central Excise officers having jurisdiction over different factories. There has to be joint proceedings in respect of the manufacturers and that the Collector was the competent authority under the law to do so, is not disputed. It is seen from the note sheets produced on record by the Revenue that the question of jurisdiction was considered by the Principal Commissioner prior to issuance of the show cause notice and it was decided that the Commissioner of Calcutta-I would be the best person to issue the show cause notice as the head office of M/s. Trade Industries (P) Ltd. (main accused) fell under the jurisdiction of Calcutta-I Collectorate. We find a lot of force in the submissions made by the Revenue that as the incriminating documents on the basis of which proceedings were started against the appellants were seized from the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat ground alone. The Court in the said case has also observed that decision of the Privy Council in the case of 13, Ind. App. 134 (P.C.) is an authority for the proposition that consent or waiver can cure defect of jurisdiction, but cannot cure inherent lack of jurisdiction. By having not raised and agitated the point of jurisdiction before the Collector Calcutta-I at the time of adjudication of the case itself, the appellants are deemed to have consented to the jurisdiction of the Collector to adjudicate the case. Unless it is seen that the authority who passed the order was entirely lacking any jurisdiction i.e. it was incompetent to adjudicate the case which would turn the subsequent proceedings as null and void, the challenge to the order on the basis of territorial jurisdiction at the appeals stage cannot be accepted. It is a well settled law that consent of parties could not operate to confer jurisdiction on a Court which was incompetent to try the suit, but the said rule of law will not operate in the cases like the present where there can be no question of inherent lack of jurisdiction. Objection to territorial jurisdiction does not go to the competence of the Court and ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation coming from the appellants' as to why the point of territorial jurisdiction was not raised before the Collector and as to why if the appellants felt that the appellant was not competent on the point of geographical demarcation to adjudicate the matter, he was allowed to proceed ahead with the adjudication. Having done so, they have conferred their consent on the adjudicating authority and having done so, they have cured the defect of jurisdiction, if any. By participating in the adjudication proceedings the appellants are deemed to have waived this objection to the territorial jurisdiction of the Commissioner. The Hon'ble Supreme Court in the case of Hiralal has observed that it is well settled that the objection as to local jurisdiction of a Court does not stand on the same footing as an objection to the competence of a Court to try a case. Whereas competence of a Court to try a case goes to the very root of the jurisdiction, objection to the local jurisdiction of a Court can be waived. 12.It is thus clear that the appellants having participated in the adjudication proceedings and having consented to the jurisdiction of the Collector are now estopped from raising the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SSI exemption notification. (7) Hence the demand of duty against the first appellant. (8) Show cause notice for demand of duty and for imposition of penalties on all the appellants issued by CCE Calcutta-I (now Cal. IV). (9) Appellants joined the proceedings. No dispute regarding lack of jurisdiction was raised by the first appellant at the adjudication stage. Demand of duty has been confirmed against the 1st appellant and the penalties imposed on all the appellants by the adjudicating authority. (10) Question of jurisdiction has been raised now at the appellate stage by the first appellant. 16.Learned advocate for appellants' pleas are as follows : (1) Central Excise duty is on the event of manufacture of goods. It is collected at the time of removal of the goods from the concerned factory or at the time of its consumption, within the factory, for manufacture of another commodity. (2) Liability for payment of duty on manufactured goods falls on the manufacturer of goods. (3) First appellant has been held to be the manufacturer of all the goods including the goods manufactured by the so-called dummies. (4) Fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty of every adjudicating authority to satisfy itself that it has a jurisdiction under the Act to proceed with adjudication thereof, even if such a question is not raised by the parties because jurisdiction is a question of law under the relevant Act and not a matter of consent between the parties. 17.Pleas of the counsel for Revenue has been set out fully in the learned sister's proposed order. 18.I am inclined to agree to the various submissions of the learned Advocate, Shri S.K. Bagaria for the appellants as set out from sub-paras (6) to (9), in para 16 above. Excise is a tax on manufacture of goods. It is collected at the time of removal of goods from the place of manufacture either for home-consumption or for manufacture of another commodity in the same place. Revenue is demanding duty on tea-making machinery assembled/ manufactured at the site of the customers (tea-gardens) all of which are outside the jurisdiction of the adjudicating authority. Only the Commissioner of Central Excise concerned having jurisdiction over each of such place of manufacture/assembling will have the jurisdiction to levy and collect duty in terms of various rules. It is not disputed that the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seizure and no fault can be found by their action of seizure and correspondingly even a show cause notice can also be issued consequent to such a seizure. In any case, we do not pronounce upon the validity of the show cause notice issued by the Visakhapatnam Collectorate inasmuch as that issue is not before us." 21. It is also to be noted that in that case (Nandi Metal) show cause notice for evasion of duty was issued by competent officer of Bhubaneswar Commissionerate where the factory of manufacture of goods seized in Vishakhapatnam Commissionerate was located. Case before the Tribunal in Nandi Metal came upon adjudication of show cause notice in Bhubaneswar Commissionerate. Regarding the show cause notice issued in Vishakhapatnam Commissionerate, perhaps for confiscation of seized goods, no pronouncement for validity or otherwise of that show cause notice was made by the Tribunal as is evident from para 5 of the said Report. In fact, Nandy Metal supports the contention of the learned Advocate Shri Bagaria, rather than of the Revenue. 22. In fact the Commissioners of Central Excise had been taking such a view regarding jurisdiction, as had been held by me above. An instance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the correctness of the jurisdiction. Principal Collector's order cannot cure that defect because he has no authority or power to confer jurisdiction on a person who does not have it. 26.Question of jurisdiction goes to the root of the matter. Concerned Commissioner lacked inherent jurisdiction on the basis of allegations in the show cause. Appellants are entitled in law to raise this plea at any stage. 27. In view of the foregoing discussion, I hold that the appellants herein succeed on the question of jurisdiction itself. There is no need to go into other questions. Impugned order is, therefore, set aside and appeals are allowed with consequential relief to the appellants. Sd/- (P.C. Jain) Vice President POINT OF DIFFERENCE 28.Whether the appeals are to be allowed on the plea of the appellants regarding lack of jurisdiction of the adjudicating authority, as held by the Vice President. OR The said plea of lack of jurisdiction is required to be rejected as held by the Member (Judicial). Sd/- (P.C. Jain) Vice President Sd/- (Archana Wadhwa) Member (J) 1-9-1999 THIRD MEMBER DECISION 29.[Order per : Dr. S.N. Busi, Member (T)]. - The underm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise, Calcutta-I has no power and authority or jurisdiction over the Tezpur factory of M/s. T I Limited and the customers sites where the goods were stated to have been erected and/or installed, he had no competence whatsoever to initiate or decide any such proceeding. 30.1Referring to the provisions of Rule 4 of the Central Excise Rules, 1944, the ld. Advocate contends that wherever assessee's activities or the subject matters under dispute are spread over jurisdiction of different Collectorates/Commissionerates, the Central Board of Excise Customs, New Delhi issues notifications under Rule 4 ibid read with Section 2(b) of the Central Excise Act, 1944 appointing any particular Collector/Commissioner investing him with the powers over such assessee concerned throughout the territory of India for the purpose of investigation and adjudication of cases against such assessee. To illustrate the said point, he cites Notification No. 3/98-C.E. (N.T.), dated 27-2-1998 relating to M/s. Zinc Smelters and Refiners (I) Pvt. Ltd. and Notification No. 13/98-C.E. (N.T.), dated 21-5-1998 in respect of investigation and adjudication of cases against M/s. Western India Machinery Company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised either before the Adjudicating authority or the Hon'ble High Court of Calcutta. According to him, the issue relating to jurisdiction, power and competence can be raised at any stage as it goes to the root of the matter and there can be no waiver in this regard. To substantiate this plea, the ld. Advocate relies upon the judgment of the Hon'ble Supreme Court in Commissioner of Sales Tax v. Sarjoo Prasad Ram Kumar : 1976 (37) STC 533 and the decisions of the Tribunal in C.C. Ex. v. M/s. Ashok Leyland Limited : 1999 (35) RLT 769 (CEGAT) ; M/s. Sun Beverages Pvt. Ltd. v. C.C. Ex. : 2000 (36) RLT 684 (CEGAT) ; and M/s. Jayant Vitamins Limited v. C.C.Ex. : 1996 (81) E.L.T. 421 (Tribunal). At the end, Shri Bagaria, ld. Advocate supports the order recorded by Hon'ble Vice-President. 31.Shri B. Samaddar, ld. Advocate appearing for the Revenue, while countering the arguments of the appellant's Advocate, submits that mere "lack of territorial jurisdiction" will not vitiate the adjudication proceedings if the Adjudicating authority possesses "inherent jurisdiction". He, therefore, argues that non-territorial jurisdiction cannot render the order, ipso facto, a nullity. In a bid to sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity who has territorial jurisdiction alone is competent and has the power to adjudicate the cases falling in that geographical area although Collectors of other areas are of equal status. Viewed from this angle, I consider that Adjudicating authority in the instant case has no jurisdiction, power or competence to adjudicate the same. 36.On a careful perusal of the orders recorded by Hon'ble Vice-President and Hon'ble Member (Judicial) and the case law cited therein, I am inclined to agree with the view of Hon'ble Vice-President that lack of territorial jurisdiction of a Commissioner in the context of the provisions of the Central Excise Act and Rules made thereunder, implies inherent lack of jurisdiction as well. Failure to advance the plea of jurisdiction at the Adjudication stage, in my opinion, would not raise any presumption that the appellant has given his consent to Commissioner of Central Excise, Calcutta-I and as such cannot be deemed to have waived his right to raise the question of lack of jurisdiction at the appellate forum. Moreover, jurisdiction cannot be conferred by any authority other than the one specified in the Central Excise Statute. In the instant case, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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