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S. Raman Paramakudi Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
AppellantS. Raman Paramakudi
RespondentCollector of Central Excise
Excerpt:
.....of gold ornaments during the preceding three years at paramakudi as envisaged in rule 2(f) of the gold control (licensing of dealers) rules, 1969. this view of the additional collector is challenged before us in appeal proceedings.2. during the course of the preliminary discussions of this case, a question of law has come to our notice. in the interest of uniformity of practice and desirability of having the issues settled, even for our guidance at the best possible level, we would take up that point first.the east regional bench consisting of brothers k. gopal hegde and k.l.rekhi had, in the case of shri sunil kumar ghosh v. collector of customs and central excise, west bengal-appeal no. g.d. (t) cal 7/83, [1983 e.l.t. 1964 cegat)] held that an appeal against an order of the additional.....
Judgment:
1. The Additional Collector of Central Excise, Madurai, by his Order C.No. XVII/7/13/83-GC. I, dated 1-7-1983, has rejected an application from Shri Raman of Paramakudi for grant of a gold dealer's licence. In doing so, he has kept in view the turnover of gold ornaments during the preceding three years at Paramakudi as envisaged in Rule 2(f) of the Gold Control (Licensing of Dealers) Rules, 1969. This view of the Additional Collector is challenged before us in appeal proceedings.

2. During the course of the preliminary discussions of this case, a question of law has come to our notice. In the interest of uniformity of practice and desirability of having the issues settled, even for our guidance at the best possible level, we would take up that point first.

The East Regional Bench consisting of brothers K. Gopal Hegde and K.L.

Rekhi had, in the case of Shri Sunil Kumar Ghosh v. Collector of Customs and Central Excise, West Bengal-Appeal No. G.D. (T) CAL 7/83, [1983 E.L.T. 1964 CEGAT)] held that an appeal against an order of the Additional Collector under the Gold (Control) Act will lie to the Collector (Appeals). We also note that the North Regional Bench has held a similar view in the case of Kanti Prasad & Sons, Meerut v.Collector of Central Excise, Meerut, in Appeal No. GC(DEL) (T)/AppeaI/18/82-[1983 ECR 749(CEGAT)].

3. We note that in these two decisions our brethren had taken particular note of Notification No. S.O. 985-E, dated 27-12-1980, as amended, issued by the Central Government in terms of Clause (b) of Section 78 of the Gold (Control) Act, 1968. According to SI. No. 3 of that Notification, both an Additional Collector of Customs and Additional Collector of Central Excise can exercise powers of adjudication, confiscation and imposition of penalty where the value of gold liable to confiscation does not exceed Rs. 10 lakhs. The Calcutta Bench has interpreted this notification in two ways : (a) The need for the issue of a notification under Section 78(b) would itself indicate that the Additional' Collector is not a 'Collector', as otherwise he would be governed by Clause (a) giving unlimited powers to a Collector ; and (b) The fact that the powers of adjudication have been limited would indicate that the officer is lower in rank to that of a Collector.

From this premise, they referred to the provisions of Section 80 which provides that when a person is aggrieved by a decision passed by a Gold Control Officer "lower in rank" than a Collector of Central Excise or Customs, the appeal would lie to the Collector (Appeals).

4. The Senior Departmental Representative, Shri S.K. Choudhury, canvasses the view that an Additional Collector of Central Excise is a 'Collector' for purposes of the Gold (Control) Act.

5. The crucial point for decision is whether for purposes of the Gold (Control) Act, an Additional Collector of Customs/Central Excise is an officer lower in rank than that of a Collector of Central Excise/Customs. Before proceeding further, we would advert to the judgment of the ad hoc Bench constituted by the President in the case of S. Kumar and Ors. v. Collector of Central Excise and Ors. [1983 E.L.T. 1057 (CEGAT)] which dealt with the question whether for purposes of the Central Excises and Salt Act, 1944, an Additional Collector of Central Excise is an officer subordinate to the Collector of Central Excise. After examining the case law in detail, that came to the conclusion that an Additional Collector of Central Excise is a Collector for purposes of the Central Excises and Salt Act.

6. The Gold (Control) Act by itself does not define the terms 'Collector' or 'Additional Collector'. In the absence of any such definition, one would naturally turn to the parent Acts under which these officers are created to understand the true scope and meaning of the phrases and terms occurring in the Gold (Control) Act. If as held by the ad hoc Bench an Additional Collector of Central Excise is a Collector for purposes of the Central Excises and Salt Act- which we should presume should act as a guidance in interpreting the Gold (Control) Act-it does not stand to reason that because he acts for certain purposes under the Gold (Control) Act he suddenly becomes subordinate to the Collector or lower in rank to that of a Collector.

7. Viewed in another angle, it is common ground that an Additional Collector of Customs is a Collector for purposes of the Customs Act, 1962. In fact, Section 2(8) of the Customs Act specifically states that "Collector of Customs" includes an Additional Collector of Customs.

There should be no scope for doubt or interpretation in so far as an Additional Collector of Customs is concerned. Here again, if under the parent Act under which the office of Additional Collector of Customs is created, he is a Collector, he does not cease to be Collector when he functions under the Gold (Control) Act. It is pertinent to note that in the notification relied upon by our brethren both Additional Collector of Customs and Additional Collector of Central Excise have been bracketed together. It cannot be what the Customs Act has given by way of legislation can be taken away by a mere notification under the Gold Control Act.

8. Section 78(a) of the Gold (Control) Act gives unlimited jurisdiction to a Collector of Customs or Central Excise. If, as we have noticed above, an Additional Collector of Central Excise or Customs is a 'Collector' for purposes of their parent Acts'-and hence for purposes of the Gold (Control) Act as well - in the absence of any specific limitation under the main Act, the natural presumption should be that they are Collectors and hence not lower in rank in the eyes of law whatever be the administrative hierarchy in the two Departments. What would then be the effect of the issue of the notification under Section 78(b)? Section 78(b) is an enabling provision which permits the Central Government to prescribe limits in respect of Gold Control Officers not below the rank of Superintendent of Central Excise. If, as we have noted above, an Additional Collector of Customs or Central Excise is a Collector for purposes of the Gold (Control) Act, the mere prescription of certain limits in terms of notification under Section 78(b) would at best be an exercise in futility. It is well-settled law that a notification issued under the Act cannot override the provisions of the Act itself. We are aware that a notification can be looked into for purposes of ascertaining the intention or the general trend of the Acts in limited circumstances. However, in view of what we have observed in paras 4 and 5 above we would hold that an Additional Collector of Central Excise or Customs is a Collector for purposes of the Gold Control Act as well, particularly with reference to Sections 80 and 81 thereof.

9. As, however, the above view would run contrary to the decision taken by the East and North Regional Benches (we are informed that the West Regional Bench has also taken a view), we direct that this matter be placed before the President for considering the constitution of an ad hoc Bench for deciding the issue.

10 Before concluding the reference, we would like to refer to our observations in paragraph 11 of our Order No. ED(T) (MAS) 6/82, dated 17-3-84- Manjoor Industrial Co-operative Factory, Nilgiris v. Collector of Central Excise, Madras, which is reproduced below for the sake of convenience : "11. While doing so, we would like to observe that it has been urged before us that the constitution of a Larger Bench is not warranted by the provisions of the Central Excises and Salt Act, 1944. In this connection, reliance is placed on Section 35(d)(1) of the Act which incorporates provisions of Section 129(1), (2), (5) and (6) of Section 129(C) of the Customs Act, 1962 in the functioning of the Tribunal in Central Excise cases. Section 35(d)(ii) of the Central Excises and Salt Act, 1944 provides that when matter relates to a question having a relation to the rate of duty and value, it shall be heard by a Special Bench and such Bench shall consist of not less than three members. Section 129(C)(2) states "that the Bench shall consist of one Judicial Member and one Technical Member". It is pointed out that in relation to a Special Bench dealing with rate of duty or valuation, the wording used is "that it shall consist of not less than 3 Members", whereas in other cases, it is stated that it shall consist of one Judicial Member and one Technical Member (emphasis supplied). Use of the word "shall" in Sub-section (2) of Section 129 of the Customs Act, as made applicable to the Central Excises and Salt Act, and reference to the Special Bench having a minimum of three members in Section 35(d)(ii) would indicate that the reference to two members in Sub-section (2) of Section 129 of the Customs Act, 1962 has to be construed as mandatory provision; in other words, matters other than valuation or classification shall always be heard by a Bench of only two members. If this view were to be adopted, constitution of a Special Bench consisting of more than two members for purposes of deciding matters, such as the one under reference would be beyond the scope of the Act. One could perhaps argue that it does not prevent constitution of an ad hoc Bench of just two members to decide such referred matters. These are, however, matters relating to jurisdiction which could be considered by the ad hoc Bench if one is ordered to be constituted by the President in terms of our request made in the last para."


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