1. M/s. Sundaram Fasteners Ltd., Madras were paying duty on 32 items of Connecting Rod Bolts concerned in this appeal as falling under Tariff Item 52. But subsequently they sought to reclassify the said 32 items under Tariff Item 68. On adjudication the Assistant Collector under his order dated 4-5-1982 rejected their request. But on appeal the Appellate Collector accepted their contention and ordered reclassirication under Tariff Item 68. It is against the said order that the present appeal has been preferred by the Collector of Central Excise, Madras.
2. When the appeal was taken up, Shri Chandrasekharan, learned Counsel for the respondents, raised two preliminary objections. They were : (i) the authorisation by the Collector is not signed by him and the appeal was, therefore, not validly preferred ; (ii) the authorisation does not disclose that the Collector had applied his mind before authorising the filing of the appeal.
3. Since these two objections were fundamental to the further hearing of the appeal, both parties were heard on the said matter on 4-12-1984.
That day we had indicated that we were reserving our decision on the said questions and that-if we hold against the respondents on these matters a further date would be fixed for hearing the appeal on merits.
We had indicated that we would express our opinion on this matter by 18-12-1984. On 18-12-1984, when the appeal came up for mention we had indicated that we were over-ruling the ' preliminary objections raised by the respondents and the appeal would, therefore, be heard on merits.
This order is to give our detailed reasons for our opinion expressed on 18-12-1984.
4. No doubt, the authorisation filed with the appeal is not actually signed by the Collector (Shri B.R. Reddy). But his name is typed and the authorisa tion has been attested by the Assistant Collector under his original signature. But Shri Tayal points that under Rule 9(2) of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 what is required to be filed in such matters is an attested copy of the order containing the direction of the Collector for filing the appeal. In view of this provision it appears to us that the objection of Shri Chandrasekharan cannot be upheld on this point. We accordingly over-rule that objection.
5. The appeal has been filed under the provisions of Section 35-B(2) of the Central Excises and Salt Act. The said provision reads as follows : 35-B(2): "The Collector of Central Excise may, if he is of opinion that an order passed by the Appellate Collector of Central Excise under Section ,. . 35, as it stood immediately before the appointed day or the Collector ,, (Appeals) under Section 35-A, is not legal or proper, direct any Central Excise Officer authorized by him in this behalf hereafter in this Chapter referred to as the authorized officer) to appeal on his behalf to the Appellate Tribunal against such order." The provision therefore requires that the Collector should have been of opinion that the. order passed by the Appellate Collector was not legal or proper and in such an instance he may direct the filing of an appeal against the said order. Shri Chandrasekharan contends that the authorisation produced does not disclose that the Collector had formed any such opinion as required under the said provision. He contends that the authorisation does not even indicate that the Collector had applied his mind to the facts of the case and had thereafter come to the conclusion that the order of the Appellate Collector was not legal or proper. He claims that this would, therefore, be a case where it ought to be held that the Collector had not applied his mind and for that reason the authorisation or sanction must be held to be invalid.
6. 'But Shri Tayal for the department contends that the words used in the Section are "is of opinion" as distinguished from other words in other provisions such as "has reason to believe" or "is satisfied" and, therefore, it would suffice if the authorisation or sanction to file an appeal indicates that the Collector is of that opinion and it is not necessary that the grounds for coming to such an opinion should be disclosed. He contends that it would not be open to the Tribunal to go into the sufficiency of the grounds for the Collector to be of opinion as required under the Section.
7. In this connection Shri Chandrasekharan relies upon certain decisions of the Supreme Court. They are :Barium Chemicals Ltd. v. Company Law Board (AIR 1967 SC 295), (ii) Rohtas Industries Ltd. v. S.D. Agarwal (AIR 1969 SC 707) and (iii) Jaswant Singh v. State of Punjab (AIR 8. In the first two cases cited above the provision that came up for cons truction was Section 237 of the Companies Act. Under the said Section "the Central Government may, if in its opinion there were circumstances, suggesting ". Two of the judges in the first case held that although the formation of opinion of the Central Government was a purely subjective process and such an opinion cannot be challenged in a court on the ground of propriety, reasonableness or sufficiency, the authority concerned is nevertheless required to arrive at such an opinion from the circumstances suggesting the conclusions as set out in Sub-clauses (i), (ii) and (iii) of Section 237 (b) and the expression "circumstances suggesting" cannot support the construction that even the existence of circumstances is a matter of subjective opinion. But two other judges held that the power conferred on the Central Government under Section 237 (b) was a discretionary power and no facet of that power was open to judicial review. The fifth judge offered no opinion on that aspect. Therefore, the Supreme Court had to consider the matter again in AIR 1969 SC 707 and, under that decision, upheld the view of the first two judges above-noted. That is to say, they held that the existence of the circumstances in. question was open to judicial review though the opinion formed by the government thereon was not amenable to review by the courts.
9. In the present instance it may be seen that Section 35-B(2) does not call for the existence of any such factual circumstances as mentioned in Section 237 (b) of the Companies Act. This Section only requires that the Collector should be of opinion that the order of the Appellate Collector was not legal or proper. In that view it would appear to follow from the decisions of the Supreme Court above cited that the said opinion of the Collector would not be open for review by this Tribunal at the preliminary stage.
10. But Shri Tayal further contends that even if it were to be held otherwise a perusal of the Collector's file would show that the Collector had fully apprised himself of the facts of the case and had then come to his con clusion that the order of the Appellate Collector was not legal or proper. We have perused the file and the notings thereon. We find that all the necessary facts had been placed before the Collector and, evidently on a perusal thereof, the Collector had approved of the proposal to prefer an appeal. It is seen that subsequently the draft grounds of appeal had again been submitted to the Collector and had been approved by him. In the circumstances even on facts we are satisfied that the Collector had come to his opinion on a consideration of all the relevant facts and on application of his own mind thereto.
11. The decision in AIR 1958 SC 124 reads that it should be clear from the form of the sanction that the sanctioning authority considered the evidence before it and after a consideration of all the circumstances of the case sanction ed the prosecution and, therefore, unless the matter can be proved by other evidence, in the sanction itself the facts should be referred to indicate that the sanctioning authority had applied its mind to the facts and circumstances of the case. Therefore, this does not lay down that the order of sanction must on the face of it disclose the facts to which the Collector applied his mind and the reasons for which he came to the conclusion he did. On the other hand, the judgment has laid down that the above-said matters can be proved by other evidence. In this case, as mentioned above, we have perused the file of the Collector from which it is clearly established that the Collector had applied his mind and come to the conclusion that an appeal should be preferred.
12. Shri Chandrasekharan further contended that the Collector had not applied his own mind in sanctioning the filing of the appeal and for that reason also the same is invalid. In making the submission he had referred to the notings on the file and pointed out that the office had relied upon the Board's Trade Notice Nos. 26/81 and 35/81 and that the Collector had been guided by the same in ordering the filing of the appeal without applying his own mind. We do not agree with this submission. The Collector was not acting as an adjudicating authority in deciding whether an appeal was to be filed or not. He was in the position of a litigant only to decide whether an appeal was to be filed or not. The fact, that the Trade Advice of the Board was also referred to in this con nection for arriving at the decision, docs not mean that the Collector was guided by the Trade Advice only or that he could not refer to the same in coming to his conclusion. The Trade Advice had been brought to the notice of the Collector by the office and he had taken that also into consideration, as he was entitled to.
13. We, therefore, hold that the Collector had, after taking into consideration the relevant material, decided to file an appeal against the order of the Appellate Collector and that the correctness of this decision is not open to challenge.
14. Accordingly, the preliminary objections raised by Shri Chandrasekharan are over-ruled and the appeal is directed to be posted for hearing on merits.