1. In this Second Appeal by the Union of India (excise authorities) certain substantial questions of law have been framed at the time of admission of the Second Appeal. Moat of these questions relate to the bar of jurisdiction of the Civil Court in respect of the matters arising under the Central Excises and Salt Act and the Rules thereunder.
2. The facts leading to this Second Appeal are brief and simple. The respondent No. 1 herein (the plaintiff) is a partnership firm dealing in tobacco. It was issued a show cause notice (ex. 56) dt. 19th February, 1968 wherein it was alleged that M/s. Urvish Snuff Factory (the plaintiff) had removed 3175 Kgs. of Black Chopadia whole leaf tobacco from their warehouse premises otherwise than as provided by the Rules and they had not produced their account books before the Central Excise officers for inspection and the plaintiff was required to show cause as to why duty should not be recovered in respect of the tobacco and why penalty should not be imposed on them. Along with the show cause notice enclosures were copies of the Panchnama dt. 13-4-1967 and 18-4-1967. Panchnama dt. 16-1-1968 and the statements dt. 16-1-1968 and 8-2-1968 were already supplied on the spot as mentioned in the notice. By ex. 59 the plaintiff requested for time of four weeks and it was mentioned that if there was other evidence than the one mentioned in the show cause notice, the same was requested to be supplied. By another application ex. 61 another request was made for time for 20 days and a reminder was also made that copies of additional evidence, if any, be sent to them. By reply ex. 62 dt. 20th May 1968 it was clarified that the documents on which the charge was framed had been supplied and, therefore, the plaintiff should file written explanation within 10 days. Accordingly the reply and the explanation was filed on 1st June, 1968 which is at ex. 63.
3. In the reply it was contended that on 13th April, 1967 the firm of M/s. Gandabhai Harilal, had filed Special Civil Suit No. 26/67 in the Nadiad court and obtained ex parte order of attachment before judgment against Popatlal Pranjivandas Bhavsar, who is one of the partners in the plaintiff firm which is at Palanpur. In pursuance of the ex parte order of attachment before judgment, the bailiff of the Palanpur court came to the warehouse of the plaintiff with a partner Bechardas of Nadiad firm which had filed the suit and the licensed warehouse of the present plaintiff was sealed by the bailiff by putting court's seals and making a panchnama thereof. On 18th April 1967 the seals were opened for making inventory of the goods lying therein and it was found that no tobacco or goods were found inside the warehouse. The panchnama in that regard was also made. These are the two panchnamas which were referred to as enclosures to the show cause notice. At the personal hearing before the Assistant Collector, Central Excise, on 28th September 1968 the statement of partner of the plaintiff firm was recorded. In the explanation ex. 63 and the reply ex. 65 it was contended that during the period from 13th April to 18th April 1967 the licensed warehouse of the plaintiff firm was under the seals of the court and, therefore the custody and possession of the warehouse and the goods contained therein was with the court and during this period if tobacco was removed by anyone by theft or mischief or other illegitimate way the plaintiff was not liable for such removal and the plaintiff could be asked to pay duty or penalty in that connection.
4. The Assistant Collector of Central Excise by his order dt. 30th October 1968 (ex. 66) came to the conclusion that between 13-4-1967 and 18-4-1967 both the seals as well as the lock were intact and they were not tampered with and that proved that the tobacco had not been removed by anybody between these two dates but the same was removed prior to 13-4-1967; and, therefore, he held that even if it was accepted that the possession of the warehouse was not with the plaintiff during that period, still the plaintiff would be liable for the removal of the goods because such removal had taken place prior to 13-4-1967. The Assistant Collector, Central Excise, came to the conclusion that there was no tobacco in the warehouse on 18-4-1967 and that the warehouse was not opened between 13th to 18th April 1967 and therefore he passed the impugned order to levy the penalty of Rs. 200/- and to demand duty at the appropriate rate on 3175 Kgs. of tobacco.
5. The matter was carried in appeal by the plaintiff before the Collector of Central Excise. That appeal has been dismissed by the appellate order dt. 12-8-1971. The Collector did not go into the question whether the goods were removed before the warehouse was sealed by the court bailiff or whether the goods were removed after such sealing by the court bailiff. The Collector proceeded on the basis of Rule 225 of the Central Excise Rules, which provides that if any excisable goods are removed by any person from the place they are warehoused, a licensee of the warehouse shall be held responsible for such removal and shall be liable to be dealt with according to the provisions of the Act and the Rules as if he had removed the goods himself. Relying on that rule, the Collector held that the plaintiffs are themselves responsible for duty and penalty for the tobacco missing from their warehouse, and, therefore, the appeal was rejected.
6. At the hearing of this Second Appeal, it has been admitted by the learned counsel for the respondent-plaintiff that Revision Application filed by them is pending and is now transferred to the Central Excise Appellate Tribunal, Bombay Range.
7. The suit was filed when the orders of the Assistant Collector and the appellate Collector were passed. In the plaint it has been mentioned that against the order of the Assistant Collector appeal was filed before the Collector and in Para 9 it is mentioned that the said appeal was pending. However in Para 12 of the plaint it is mentioned that the appeal was dismissed by the Collector and it was submitted that the order in appeal was also null and void. The filing and pendency of the Revision Application is admitted by the plaintiff-respondent.
8. The question of jurisdiction of the Civil Court in the matters arising under the Central Excises and Salt Act has been considered by Division Bench of this court (M.P. Thakkar and P.D. Desai, JJ.) in Union of India v. Jyoti Ltd. First Appeal No. 696/66 decided on 24th November 1972. The contention of the manufacturer was that vertical motors were not covered by Item 16 which fixed the tariff value in regard to squirrel cage motors other than totally enclosed motors of the horizontal type and they made a claim for refund. The contention of the manufacturer company was not accepted and the company did not prefer regular appeal but made representation. The company did not file any appeal or revision under the Central Excises and Salt Act but instituted a civil suit for refund which was decreed by the trial court and the First Appeal at the instance of the union of India came to be decided by the Division Bench. The Division Bench felt that the questions squarely fell within the jurisdiction of the authorities constituted under the Excises Act and Civil Court had no jurisdiction to entertain such a dispute. The Division Bench referred to the Supreme Court judgment in the case of union of India v. Narasinhulu, 1969 (2) S.C.C. 659. In that case the High Court had held that the Civil Court had jurisdiction; but the Supreme Court reversed the same by observing that even an erroneous decision of the customs authority cannot be said to be reached without jurisdiction merely because it may be shown in some collateral proceedings to be wrong and in the case of a right which depends upon a statute, the jurisdiction of the Civil Court to grant relief may by express provision or by clear implication of the statute be excluded e.g. where a statute creates a new right or liability and provides complete machinery for obtaining redress against erroneous exercise of authority, the jurisdiction of the Civil Court to grant relief is barred. The Supreme Court further observed that liability to pay duty of customs is not a common law liability and it arises by virtue of the Customs Act in respect of any grievance arising in consequence of enforcement of that liability, machinery has been provided by the Act and having regard to the complicated nature of the questions which arise in the determination of liability to pay duty of customs the Legislature has invested the power of determining liability and the manner of enforcement thereof upon a specially authorised hierarchy of tribunals; and therefore the jurisdiction of the civil court was held to be barred by clear implication of the statute. The Supreme Court also observed that the bar of jurisdiction of the civil court does not bar the jurisdiction of the High Court under the Constitution. In the case before the Supreme Court, the Supreme Court was satisfied that identical question was already determined by the Madras High Court and if the plaintiff in that suit had moved the High Court, in exercise of jurisdiction under Article 226, the Union of India had practically no defence. Even in such a clear case the Supreme Court held that the civil court had no jurisdiction and the suit was ordered to be dismissed.
9. Following the above judgment of the Supreme Court the Division Bench of this Court in the case of Union of India v. M/s. Jyoti Limited, decided on 24th November, 1972 held that the Central Excises and Salt Act is complete Code and if relief against excessive or erroneous taxing is to be obtained by an assessee under the provisions of the Act, the jurisdiction of the Civil Court to entertain a suit would be excluded. The decision of the Supreme Court under Sea Customs Act was held to be directly applicable to the Central Excises and Salt Act in view of the similarity of the provisions and the machinery. After referring to the provisions of the appeal and the revision under Sections 35 and 36 of the Central Excise Act, the Division Bench held that the machinery built in the Excise Act with regard to the refund, appeal and the revision, constituted a complete Code in order to seek redress in such matters and inasmuch as it is a complete Code, the jurisdiction of the Civil Court was clearly ousted. The Division Bench also observed that the machinery embodied in the Excise Act and Rules provides complete and adequate remedy to do what the Civil Court is required to do. An argument was made that competent excise authority by erroneous decision would require an assessee to pay the duty and it might be complained that the tax is sought to be collected 'not in accordance with law' and reliance was placed by the plaintiff on the judgment in the case of Dhulabhai v. State of M.P. - AIR 1969 SC 78. The Division Bench held that the Competent excise authority had jurisdiction to interpret the notification and to determine all questions arising before him and in case of erroneous decision redress could be obtained by resorting to the machinery built in the Excise Act. Since authority under the Act has the jurisdiction to decide the question arising before him, the jurisdiction of the Civil Court to decide questions could not be invoked in view of the finality attached to the orders of the authorities under the Excise Act. The Division Bench observed that the competent authority under the Excise Act is required in order to determine the duty to interpret the provisions in question as a step in the process of assessment and it cannot be said that it had acted without jurisdiction. Further reliance was placed on the Supreme Court judgment in the case of State of West Bengal v. The Indian Iron and Steel Co. Ltd., AIR 1970 SC 1298. In that case interpretation placed by the assessing authority was clearly contrary to the interpretation which had been upheld by the Supreme Court itself in another matter, yet the Supreme Court took the view that it was a case of improper interpretation and not a case of overlooking or ignoring the provisions of law and the Supreme Court followed the well settled principles that if the provisions of the Act form a precise, self-contained code, an assessee cannot be permitted to challenge the same in a Civil Court. The Division Bench ultimately laid down the following principle :
'The principle which emerges is that if the assessing authority has misinterpreted a provision, it cannot be said that he has done something which is not in conformity with law or not in accordance with law. It is a question of an erroneous interpretation and having regard to the machinery provided by the Act itself, recourse must be had to that authority. This principle is directly attracted in the present case. On the same analogy it is evident to us that redress could be had by the plaintiff company by setting into motion the machinery enacted by the Excise Act and the Rules. Under the circumstances, the Civil Court will not have the jurisdiction to determine the question as to whether or not excise duty should have been collected on the footing that tariff values had been determined in regard to vertical type squirrel cage motors as well. It will be recalled that in the course of the discussion at the earlier stage we have already expressed the opinion that the interpretation canvassed by the other side is equally possible. Under the circumstances, the Civil Court cannot assume jurisdiction to decide questions which can be appropriately decided by the competent authorities under the Excise Act particularly inasmuch as a special machinery has been enacted into the Act and the Rules in this behalf which constitute a complete Code in itself.
10. In view of this clear and binding pronouncement of the Division Bench in matters arising under the Central Excises and Salt Act the jurisdiction of the Civil Court is clearly barred. All questions sought to be raised by the present plaintiff-respondent in the civil suit can be raised before the authorities under the Central Excise Act and there is adequate remedy provided under that Act and these authorities have all the powers to give decisions and reliefs which the Civil Court can give and, therefore, the jurisdiction of the Civil Court is clearly barred in suits of this nature which are required to be decided by such authorities constituted under the Act and the Legislature has given finality to the same which by clear implications, bars the jurisdiction of the Civil Court. If the civil court has jurisdiction to deal with such matters finality attached to the orders of the Excise authorities would be lost and the provisions of finality given by the Legislature would be meaningless.
11. The learned counsel for the plaintiff-respondent sought to rely upon the exceptions laid down in the case of Dulabhai. He submitted that the provisions of the Act have not been complied with while passing the impugned order and submitted that regarding the quantum of duty and penalty. There is no intimation in the show cause notice, and Rule 147 which gives power to the excise authorities to grant remission in case of loss is also not considered. He also submitted that there is no machinery provided in the Act to meet with the peculiar circumstances of this type where for a temporary relevant period the custody and possession of the warehouse could not be said to be with the licensee. However, even in the facts of the present case all questions can be decided by the authorities under the Act. It is open to the plaintiff to make same submissions and raise some contentions before the authorities under the Act and the authorities are bound to decide the same in accordance with law and their final decision is also further subject to judicial review under the constitutional provisions. Therefore the plaintiff has ample remedies under the Act without recourse to the civil court. The Civil Court cannot give any relief. It might be merely an additional chance to agitate the same questions and sometimes to obtain a contrary decision satisfactory to the plaintiff. However, under the legislative scheme of the Act, that is not permissible.
12. The plaintiff has succeeded in both the courts below. However, must fail on the question of jurisdiction of the civil court and in that view the suit must be dismissed. He has filed Revision Application which is pending since more than a decade and now it is transferred to the Tribunal, Bombay Range. It is hoped that the Revision Application will now be decided by the Tribunal. However during the pendency of that Revision Application, which is old enough for final disposal, it would be unjust that the recovery should be enforced and the present appellant has a very arguable case which has appealed to two lower courts. In the High Court, he fails on the ground of lack of jurisdiction of the civil court. I have deliberately not dealt with any questions on merits. If the civil court has no jurisdiction to go into the merits, the High Court in Second Appeal also would not have jurisdiction to go into the merits which are left to be decided by the authorities under the Act. However, it is hoped that the Revision Application which is pending since more than a decade will be decided expeditiously and till then the recovery is not enforced against the plaintiff. It is to be noted that the Assistant Collector has proceeded on one ground whereas the appellate Collector in appeal has strictly gone by the letter of Rule 225, he has not referred to the power of remission under Rule 147. It is for the authorities constituted under the Act to come to conlusion and to find, as a matter of fact, as to whether the goods were removed prior to sealing by the court bailiff or thereafter and whether in the facts and circumstances of the case the present plaintiff-respondent would be held liable. Once the loss of goods is proved to the satisfaction of the Excise authorities the Excise authorities will have to consider how far Rule 225 is applicable and whether under Rule 147 a case is made out for remission. Therefore, the respondent - plaintiff will be at liberty to raise all contentions in his Revision Application and the same will be decided by the Tribunal in accordance with law; but in the present civil suit, the plaintiff cannot get any relief because the civil court has no jurisdiction.
13. In the result, the Second Appeal Succeeds and the judgments and decrees of the lower courts are set aside and the suit is dismissed. However, the parties shall bear their own costs throughout.