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Collector of Central Excise Vs. Raman Boards Limited - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC2366Tri(Chennai)
AppellantCollector of Central Excise
RespondentRaman Boards Limited
Excerpt:
1. the above appeals are filed by the collector of central excise, bangalore, respectively against the orders of the collector of central excise (appeals), madras, dated 25-1-1984 and 3-5-1983 referred to supra, rejecting the appeal filed by the assistant collector of central excise (legal) headquarters office, bangalore under section 35e(4) of the central excises and salt act, 1944, hereinafter referred to as the act, pursuant to the direction of the collector of central excise, bangalore, dated 5-12-1983 and issued under section 35e(2) of the act.since a common ques tion of law and interpretation arises in both the appeals, they are taken up together and disposed of by a common order.2. the collector of central excise, bangalore, in exercise of his suo motu revisional powers under.....
Judgment:
1. The above appeals are filed by the Collector of Central Excise, Bangalore, respectively against the orders of the Collector of Central Excise (Appeals), Madras, dated 25-1-1984 and 3-5-1983 referred to supra, rejecting the appeal filed by the Assistant Collector of Central Excise (Legal) Headquarters Office, Bangalore under Section 35E(4) of the Central Excises and Salt Act, 1944, hereinafter referred to as the Act, pursuant to the direction of the Collector of Central Excise, Bangalore, dated 5-12-1983 and issued under Section 35E(2) of the Act.

Since a common ques tion of law and interpretation arises in both the appeals, they are taken up together and disposed of by a common order.

2. The Collector of Central Excise, Bangalore, in exercise of his suo motu revisional powers under Section 35E(2) of the Act and on examination of the proceedings of the Assistant Collector of Central Excise, IDO, Mysore, respectively in C. No. V/17/18/26/82 Ins., dated 30-9-1983 and C. No. V/17/18/61/82 Ins., dated 10-2-1983 on grounds of legality, propriety and correctness, directed the Assistant Collector of Central Excise, Legal to file appeals before the Collector of Central Excise (Appeals), in terms of Section 35E(4) against erroneous refunds granted to the respondent herein. The appeals were dismissed by the Collector of Central Excise (Appeals) on grounds of limitation under Section 11A of the Act out of which the present appeals arise.

3. The learned Senior Departmental Representative submitted that the suo motu revisional powers exercisable by the Collector of Central Excise by calling for and examining the record of any proceedings in which an adjudicat ing authority subordinate to him has passed an order to satisfy himself as to the legality or propriety of such an order to are not controlled and subject to the period of limitation envisaged under Section 11A of the Act. The Senior Departmental Representative in expatiating on this submission urged that a superior authority in law is empowered to call for and examine the record of a subordinate officer for purposes of satisfying himself about the legality or cor rectness of any order or decision passed by him and this exercise of the power of correctional jurisdiction is controlled by the built in period of limitation incorporated in Section 35E(3) of the Act which provides for a period of two years for such exercise of powers. If the period of limitation incorporated in Section 11A were to be read into Section 35E(2) of the Act, it would render nugatory and otiose Sub-section (3) of Section 35E and such a construction is neither legal nor proper. The learned Senior Departmental Representative further submitted that the Assistant Collector of Central Excise as an adjudi cating authority is empowered with a limited power of review in respect of duties not levied or not paid or short levied or short paid or erroneously refunded within a period of six months from the relevant date by serving a notice on the person chargeable with duty and an extended period of five years is provided for in case of fraud, collusion or wilful mis-statement or suppression of facts. If this power of the Assistant Collector vis-a-vis the power of limitation envisaged by Section 11A were to be read into Section 35E(2) of the Act, it would completely emasculate the revisional powers expressly conferred by Parliament on a Collector of Central Excise under Section 35E of the Act equating it to the limited power of review exercisable by a subordinate authority in terms of Section 11 A, besides rendering the Sub-section (3) of Section 35E inoperative.

4. The learned Counsel for the respondent urged that the reasoning of the Collector of Central Excise (Appeals) under the impugned orders is correct and unless a notice has been served within six months from the relevant date on the person to whom refund has been erroneously made, the Department would become disentitled to claim the same by reason of the bar of limitation under Section 11A of the Act. Such time bar claims cannot be resurrected and resuscitated by purported exercise of suo motu revisional powers. He also placed reliance on the ruling of the Calcutta High Court in the case of S. Venkatesan and Anr. v.Nihalchand Agarwal and Ors., reported in AIR 1962 Calcutta 258 and contended that if a show cause notice had not been issued within the prescribed time limit as in the instant case, the review pro ceedings initiated by the Collector would be without jurisdiction.

5. We have carefully considered the submissions of the parties herein.

In order to understand the import of the revisional powers which a Collector of Central Excise is suo motu empowered to exercise on grounds of legality and propriety in respect of an order passed by a subordinate authority, the relevant provisions may be extracted : "35E. (2) The Collector of Central Excise may, of his own motion, call for and examine the record of any proceeding, in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or pro priety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be speci fied by the Collector of Central Excise in his order.

(3) No order shall be [made under Sub-section (1) or Sub-section (2) after the expiry of two years from the date of the decision or order of the adjudicating authority.

(4) Where in pursuance of an order under Sub-section (1) or Sub-section (2), the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Collector (Appeals) within a period of three months from the date of communication of the order under Sub-section (1) or Sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Collector (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicat ing authority and the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 35B shall, so far as may be, apply to such application." The above provisions make it abundantly clear that the Collector of Central Excise may, of his own motion, call for and examine the record of any proceedings in which an adjudicating authority subordinate to him has passed any order under this Act for the purpose of satisfying himself as to the legality or propriety of such decision and may by order direct such authority to apply to the Collector (Appeals) for determination of such points arising out of the decision or as may be specified by the Collector of Central Excise in his order. This power is subject to a period of limitation of two years from the date of the decision or order of the adjudicating authority. Pursuant to an order under Sub-section (2) of Section 35E if the adjudicating authority or the authorised officer makes an application to the Collector (Appeals) within a period of three months from the date of communication of the order under Section 35E(2) to him, such application shall be heard by the Collector (Appeals) as if such an application were an appeal made against the decision or order of the adjudicating authority. Since under Section 35E(4) of the Act an application made by an authorised officer before the Collector (Appeals) in pursuance of an order of the Collector of Central Excise under Sub-section (2) of Section 35E shall be heard as if it were an appeal against the decision or order of the adjudicating authority, the provisions of the Act regarding appeals under Sections 35 and 35A would be applicable. Section 35A deals with procedure in appeal and the second proviso to Section 35A(3) reads as under: "Provided further that where the Collector (Appeals) is of opinion that any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short levied or short paid or erroneously refunded shall be passed unless the appellant is given notice within the time limit specified in Section 11A to show cause against the proposed order." The Parliament in its legislative wisdom, in our opinion, has advisedly used the word 'appellant' in the second proviso to Section 35A of the Act extracted above. If issuance of a show cause notice within the statutory period of limitation envisaged under Section 11A were to be construed as sine qua non and a condition precedent for the very exercise of suo motu revision al powers by a superior authority viz.

the Collector of Central Excise in terms of Section 35E of the Act, the same would have been clearly expressed in Section 35A, more particularly when the second proviso to Section 35A expressly refers to the 'appellant' before Collector (Appeals), the time limit specified in Section 11A in relation to him and the statutory embargo on the Collector (Appeals) from passing an order requiring the appellant before him to pay any duty not levied or paid or short-paid or short-levied or erroneously refunded unless there was due compliance of Section 11 A. In other words, the Collector (Appeals) as an appellate authority exercising powers in appeal under Section 35A of the Act, is statutorily precluded from passing an order requiring the appellant before him to pay any duty not levied or not paid or short-paid or short-levied or erroneously refunded unless the appellant is given notice within the time limit specified in Section 11A to show cause against the proposed order. It should be noted in this context that in the instant case, the appellant before the Collector (Appeals) was the Assistant Collector (Legal). The second proviso to Section 35A referred to supra would refer to an appellant before the Collector (Appeals).

When specific express provision relating to the applicability of the period of limitation incorporated in Section 11A of the Act is made applicable to an appellant before the Collector (Appeals) regarding payment of duty not levied or paid or short levied or short paid or erroneously refunded, the absence of any such provi sion fettering the powers of the Collector of Central Excise seeking to recover an erroneously refunded amount in exercise of suo motu revisional powers under Section 35E(2) of the Act and pursuing a statutory remedy in terms of Section 35E(2) read with Section 35A of the Act would make it abundantly clear that Section 35E(2), (3) and (4) is neither controlled nor subject to Sec tion 11A of the Act. Apart from it, one of the cardinal Rules of interpretation of statutes is that even if a provision admits of two interpretations, the one which furthers the legislative intent should be preferred. As rightly pointed out by the learned Senior Departmental Representative, if the period of limi tation in Section 11A were to control and override the period of limitation in Section 35E(3), it would not only render Section 35E(3) nugatory and otiose but also inoperative and superfluous. It is a cardinal principle of interpreta tion of statutes that the legislature does not use meaningless language and every word used by it must be presumed to have some meaning even though the phraseology employed may sometimes be obscure or ambiguous. The words used in a statute are the primary and most reliable sources for inter preting the meaning and unless plain literal interpretation produces a main festly absurd and unjust result which could never have been intended by the legislature, courts would not be justified in modifying the plain language of the section. Ultimately it should be the endeavour or attempt on the part of a court or a tribunal to discover the intent of the legislature from the language used by it. After all, language is only an imperfect instrument for expression of human thought and to borrow the felicitous diction of the great jurist Lord Denning "it would be idle to expect every statutory provision to be drafted with divine prescience and perfect clarity". Section llA and Section 35E(3) should be construed harmoniously even if there be a conflict between the two so as to provide a workable and well reasoned basis on which each might fulfil its purpose in aid of the object of the enactment. In our opinion, if the power of the Collector of Central Excise exercisable under Section 35E is construed in proper prospective as one in the nature of a judicial examination of a decision of an inferior authority to rectify any error in the order, such powers though revisional in nature, would be appellate in character and it is not without legal significance that in jurisprudence revisional jurisdiction is regarded as part and parcel of the appellate jurisdiction and such correctional jurisdiction, which can be suo motu in the instant case, cannot be whittled down unless there is an express provision or necessary intentment therefor in the statute itself.

6. Another important aspect of the issue is the significant usage of the expression "Assistant Collector" in Section 11A(2) of the Act dealing with the adjudicatory power of the Assistant Collector by way of a review. As a matter of fact when the power of an adjudicating authority to review his own orders was assailed, the Division Bench of the Delhi High Court in the case of Bawa Potteries, Mehrauli v. Union of India and Anr. reported in 1981 E.L.T. 114 (Del.), while considering the scope of Rule 10, as it then existed, held that the legislature has considered it expedient to confer on the assessing authority itself a limited power of review where according to him or his successor the earlier order is erroneous, "The language of the rule clearly postulates the existence of a prior quasi-judicial determination by way of levy of duty or grant of refund or a decision not to levy duty and confers on the same authority a power of review of the earlier decision, subject to fulfilment of the conditions men tioned in the rule and subject to action for review being taken within the prescribed period of limitation." Here, in the instant case, a plain reading of Section 11A would show that a limited power of review is expressly conferred on an adjudicating authority like the Assistant Collector.

7. The show cause notice contemplated within a statutory period under Section 11A(1) has to be followed up by adjudication by the officer designated in the section itself in Section 11A(2) "the Assistant Collector of Central Excise". It is nobody's contention and by no stretch of imagination can it ever be contended for that matter that the Assistant Collector and the Collec tor of Central Excise are one and the same. Therefore, it is absolutely clear that an adjudicating authority like the Assistant Collector is clothed with the power and jurisdiction to exercise what may be called a limited power of review to readjudicate the issue within a statutory period of limitation in respect of duty not levied or paid, short-levied or short-paid or erronously refunded. This limited power reviewed has been very succinctly explained in the ratio of the Bawa Potteries case referred to supra. Therefore, when the Parliament has clothed an authority like the Assistant Collector with a limited power of review to readjudicate issues in certain circumstances covered by Section 11A within a statutory period of limitation, it would be incongruous to envisage a superior authority, viz. the Collector of Central Excise invested with suo motu revisional and correctional powers of jurisdiction over his subordinate authority on grounds of legality and propriety to exercise the same power in the same and identical manner as his subordinate Assistant Collector does. Such a construction would cut at the root of the correctional jurisdiction envisaged by Section 35E and lead to a very anomalous situation of subordinate officers passing illegal or improper order on the last date of limitation specified under Section 11 A, leaving a superior officer like the Collector of Central Excise in vested with correctional revisional jurisdiction a sad hapless spectator, because the Collector of Central Excise cannot exer cise powers of review and call for and examine the records of his subordinate authority before the sub-ordinate authority passes any decision or order under the Act since a review can only be of an order passed and would not be able to do anything if a manifestly illegal order is passed by a subordinate authority on the last day of limitation specified in Section 11 A, if Section 11A with the period of limitation therein were to control and regulate the powers of the Collector of Central Excise. We therefore, hold that Section 11A and Section 35E operate entirely in different fields with different objectives and purposes. Therefore, Section 11A cannot be telescoped or super-imposed over Section 35E with an overriding effect. Thus, the Collector of Central Excise can exercise the powers of correctional jurisdiction by way of suo motu revision in terms of Section 35E(2) against an order passed by an adjudicating autho rity subordinate to him either in respect of an order passed after the issuance of a show cause notice within a period of six months or an order passed with out the issuance of any show cause notice. The issuance or otherwise of a show cause notice is not determinative and deciding criterion of the powers of the Collector of Central Excise under Section 35E of the Act.

8. The decision reported in AIR 1962 Calcutta 258 and relied upon by the respondent has no application to the facts and circumstances of this case. This decision relates to construction of Sections 39 and 190AoftheSea Customs Act, 1878 which are not in pan materia with Section 11A and Section 35E of the Central Excises and Salt Act, 1944 arising for consideration before us.

9. We, therefore, hold that the impugned orders appealed against are not sustainable in law and they are therefore set aside and the appeals are consequently allowed. As the lower appellate authority has not decided the issues on merits, the matter is remitted back to the Collector (Appeals) for consideration of the issues on merit as per law.


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