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Collector of Central Excise Vs. Pondicherry Papers Ltd. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(18)ELT17TriDel
AppellantCollector of Central Excise
RespondentPondicherry Papers Ltd.
Excerpt:
.....it necessary to confer a right of appeal on the 'revenue' against the orders passed by the board. appeals against the orders of the board are not maintainable and the aggrieved person does not include the revenue. according to him, the collector is not competent to prefer an appeal as an executive collector against the order of the board on the ground of equity and in the interest of revenue.10. according to him, though the collector has taken the sanction of the board before filing this appeal but this cannot be said to be a validsanction as the sanction should have come from the government, and therefore, the appeal filed by the collector of central excise, madras is not maintainable and the same be rejected on this preliminary ground.11. shri sunder rajan, the departmental.....
Judgment:
1. Collector of Central Excise, Madras filed an appeal to this Tribunal under Section 33(b) of the Central Excises and Salt Act, 1944 against the order of the Central Board of Excise & Customs, New Delhi No.248-249 of 1982 dated 7-8-1982.

2. As per the facts on record M/s. Pondicherry Papers Limited the respondents manufacture inter alia M.F. (Machine Finished) Violet Wove Paper in their factory. During the course of verification of stock and accounts by the Central Excise Staff on 8-12-1980, the officers found 4 rolls of M.F. Violate Wove Paper in the finishing room but the stock card showed Nil stock on that date. The officers seized the said four rolls since they were not accounted for in the R.G. 1 record as required under Central Excise Rules and as it also appeared that the said paper would be correctly classifiable under Item No. 17(2), C.E.T.as it stood then, whereas the assessees had declared the Violet Wove Paper as writing and printing paper under Tariff Item No. 17(1) of the Central Excise Tariff.

3. Show cause notice was served upon the assessees asking them to show cause to the Central Excise, Madras, as to- (i) why a penalty should not be imposed upon them under Rule 173Q of the Central Excise Rules; (ii) why the differential duty of Rs. 3,00,188.76 for the clearance of 1,567,959.6 Tonnes of M.F. Violet Wove Paper made during the period from November 1978 to November 1980 and Rs. 1,994.77 for the clearance of 10,498.8 Tonnes of M.F. Grey Wove Paper during the month of March 1980 should not be demanded under the extended time-limit under proviso to Sub-rule (1) of Rule 10 of the Central Excise Rules, 1944 and proviso to Sub-section (1) of Section 11A of the Central Excises and Salt Act, 1944; (iii) why the 197 Kgs of M.F. Violet Wove Paper seized on 8th December, 1980 should not be confiscated under Rule 173Q of the Central Excise Rules, 1944.

4. After considering all the points put forth by the party both in their reply to the show cause notice as well as the personal hearing, the Collector of Central Excise in his order C. No. V/17/15/1/81-CX.Adj. I dated 28-1-1982 held that the M.F. Violet Wove Paper manufactured by M/s. Pondicherry Papers Limited is classifiable under Item 17(2) and that the same had been removed by M/s. Pondicherry Papers Limited mis-declaring it as writing and printing paper under Tariff Item No. 17(1), thus evading payment of duty, he therefore, demanded a duty of Rs. 3,00,188.60 under the extended time-limit under Rule 10 and Section 11A due in respect of 1567.859 tonnes of M.F.Violet Wove Paper cleared during November 1978 to November 1980 and Rs. 1,995.77 due in respect of 10.499 tonnes of M.F. Violet Wove Paper cleared during March, 1980 by M/s. Pondicherry Papers Limited and confiscated 197 Kgs. of paper and ordered it to be released on payment of a fine of Rs. 100 alongwith the confiscation of other lots seized.

He also imposed a penalty of Rs. 10,000/- on M/s. Pondicherry Papers Limited.

5. Aggrieved by the said order of the Collector of Central Excise, Madras, M/s. Pondicherry Papers Limited and M/s. Krupakar Paper Mart filed an appeal to the Central Board of Excise & Customs, New Delhi who in their order-in-appeal No. 248-249 of 1982 dated 7-8-1982 held that going by the LSI specification for Match paper on the one hand and printing and writing paper on the other hand, it is not possible to conclude that the paper in question is match paper and not printing and writing paper and that no evidence for deciding the question of classification with respect of ISI specification has been disclosed in Collector's order. The Board held that the paper deserves to be classified as printing paper and that the question of any demand for the additional duty does not arise and set aside the Collector's order and allowed the appeal.

6. Not satisfied with the order of the Central Board of Excise and Customs, the Collector of Central Excise, Madras filed an appeal to this Tribunal after obtaining the sanction of the Central Board of Excise and Customs.

7. During the course of arguments of the appeal, Shri Gopal Prasad, Consultant of the respondents M/s. Pondicherry Papers Limited, raised a preliminary objection that the Collector of Central Excise, Madras, has got no locus standi to file this appeal to this Tribunal and sought the rejection of this appeal on this preliminary point.

8. We have heard Shri Gopal Prasad, Consultant for the respondent and Shri A.S. Sundar Rajan, J.D.R., for the appellants on this preliminary point and have gone through the record.

9. Shri Gopal Prasad, Consultant of the respondents drew our attention towards a decision of the West Regional Bench, Bombay of CEGAT, Collector of Customs & Central Excise, Ahmedabad v. Narendra P. Unrao and Ors. [1984 (15) E.L.T. 275] in support of his contention that the expression "any person aggrieved" appearing in Section 35B of the Central Excises and Salt Act, 1944 does not take within its ambit the revenue or the Collector and refers only to the assessee or other persons other than the revenue. He argued that the scope of the provision of Section 35B of the Central Excises and Salt Act, 1944 cannot be extended for making the Collector of Central Excise and Customs competent to file appeals against the orders of the Central Board of Excise & Customs. The Board is an authority superior to the Collector and, therefore, it is unthinkable that a right to appeal is conferred on the Collector against the decision or the order by the Board. According to him, Parliament has taken sufficient care to safeguard the interests of thei 'revenue' inasmuch as a power on the Collector of Customs or Central Exc se to prefer an appeal against the order passed by the Appellate Collector and Collector (Appeals) has been provided and also conferred on the Board and the Collector to examine the proceedings of their subordinates for the purpose of satisfying themselves of the legality and propriety of their orders.

The Parliament did not consider it necessary to confer a right of appeal on the 'revenue' against the orders passed by the Board. Appeals against the orders of the Board are not maintainable and the aggrieved person does not include the revenue. According to him, the Collector is not competent to prefer an appeal as an Executive Collector against the order of the Board on the ground of equity and in the interest of revenue.

10. According to him, though the Collector has taken the sanction of the Board before filing this appeal but this cannot be said to be a validsanction as the sanction should have come from the Government, and therefore, the appeal filed by the Collector of Central Excise, Madras is not maintainable and the same be rejected on this preliminary ground.

11. Shri Sunder Rajan, the departmental representative countered the arguments of Shri Gopal Prasad, Consultant and submitted that Section 35B of the Central Excises and Salt Act, 1944 provides that "any person aggrieved by any of the orders mentioned therein" may appeal to the Appellate Tribunal against such orders. According to him, an order passed by the Board can be challenged in appeal before the Tribunal under the provisions of this Section. The Collector of Central Excise comes within the purview of "any person aggrieved" by the order passed by the Central Board of Excise & Customs and, therefore, this appeal filed by him is maintainable. He further argued that the ratio of the decision of the West Regional Bench of Bombay reported in 1984 E.L.T.275 does not apply in this case because in that case the Collector of Customs had not obtained the prior sanction of the Board before filing the appeal but in this case the sanction from the Board had already been obtained before filing this appeal. He drew our attention towards a case of Calcutta High Court in Union of India v. Shyamlal Dey and Ors. (1978 E.L.T. J 523) in support of his contention that the word "any person" under Section 128 of the Customs Act, 1962 or Section 35B of Central Excises and Salt Act, 1944 applies not only to the individuals but also includes any juristic person and is competent to file an appeal under Section 35B of the Central Excises and Salt Act, 1944. He also drew our attention towards a decision of this Bench of the Tribunal being order No. 22/1983 (Misc.) in Appeal No. ED(SB) 125/78-C, M/s. Kota Box Manufacturing Company v. Collector of Central Excise, Jaipur, in support of his contention that 'any person' as mentioned in Section 35 includes the Collector of Central Excise and Customs and it also includes an artificial person. According to him 'any person' include Government and local authority and even a public officer is competent to prefer an appeal against the order of the Central Board of Excise & Customs under Section 35B of the Central Excises and Salt Act, 1944 as "any person aggrieved' against the order passed by the Central Board of Excise & Customs.

12. According to Shri Sundar Rajan, the West Regional Bench of Bombay had not taken into consideration the Division Bench decision of Calcutta High Court in the case of Union of India v. Shyamlal Dey (Supra) and the Supreme Court decision in the case of Bar Council of Maharashtra v. M.V. Dabholkar (AIR 1975 S.C. 2097) and the decision of the Special Bench 'C' of the CEGAT in the case of M/s. Kota Box Manufacturing Co. v. Collector of Central Excise, Jaipur [Order No. 22 of 1983 (Misc.) dated 21-12-1983] while interpreting the words "any person". He further argued that the constitution of a three member Bench to decide a matter of a Regional Bench is in violation of the provisions of Section 129C (2 & 3) of the Customs Act, 1962 and the decision given by such an illegally constituted Bench cannot create a precedent to be followed in a later decision by this Tribunal.

13. The entire case hinges upon the interpretation of the words "any person aggrieved" as mentioned in Section 35B of the Central Excises and Salt Act, 1944. Whether a Collector can be said to be 'any person aggrieved' entitling him to file an appeal against the order passed by the Central Board of Excise & Customs has been thoroughly discussed and decided by the West Regional Bench Bombay of CEGAT and now we are not in a position to discuss about its legality or illegality. It might become an issue for discussion before a larger Bench of 5 members or before an Appellate Authority.

14. As has been laid down by the West Regional Bench of Bombay (CEGAT) in Collector of Customs & Central Excise v. Narendra P. Unrao and Ors.

(Supra), the Collector of Customs & Central Excise being an authority subordinate to the Central Board of Excise & Customs cannot file an appeal against the order of the Central Board of Excise and Customs; so following the decision of the West Regional Bench of Bombay in the said case we also hold that the Collector of Central Excise, Madras has no locus standi to file an appeal against the impugned order passed by the Central Board of Excise & Customs. The mere fact that before filing this appeal, the Collector of Central Excise had obtained the sanction of the Board does not make any difference because the Central Board of Excise & Customs is not competent to grant sanction of filing appeal against its own order.

15. Under these circumstances, we uphold the objection raised by the respondents and reject the appeal on this preliminary point.


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