2008 (9) TMI 624 - AT - Central Excise

Adjudication order - Jurisdiction - Held that - no public official can exercise the statutory powers without being vested with jurisdiction under the relevant tax statute in the manner prescribed under the law. It is inconceivable that an official can perform duties under a tax statute without having lawful authority or jurisdiction. The law is emphatic and unequivocal that the Central Excise Officers including the Commissioner of Central Excise must be appointed by a Gazette Notification. If that is not done, an official cannot legally perform the statutory duties relating to levy and collection of taxes under the Central Excise Law. Shri C.M. Mehra having not been appointed as the Commissioner of Central Excise, Kolkata-I in the manner prescribed under the Central Excise Act and Rules, had no jurisdiction to pass the impugned Order confirming the duty demand and imposing the penalty - we waive the requirement of predeposit, set aside the impugned Order - appeal allowed - decided in favor of appellant.

Summary

Issues: Lack of jurisdiction of the Commissioner of Central Excise, Kolkata-I in confirming duty demand and imposing penalty.

Analysis:
1. Appointment of Shri C.M. Mehra: The impugned Order-in-Original confirmed a duty demand and imposed a penalty on the Appellants. The Appellants argued that Shri C.M. Mehra was not appointed as Commissioner of Central Excise, Kolkata-I as required by law, rendering the Order without jurisdiction. The Appellants contended that Shri Mehra's appointment was necessary to exercise powers under the Central Excise Act and Rules, which had not been done through a Gazette Notification. The Appellants cited previous instances where Shri Mehra was found to have acted without jurisdiction, emphasizing the importance of proper appointment for legal validity.

2. Legal Arguments: The Appellants argued that under Article 265 of the Constitution of India, no tax can be levied or collected except by authority of law, which in this case refers to the Central Excise Act, 1944 and its Rules. They emphasized that statutory requirements for appointments must be strictly adhered to, as established by the Supreme Court in various judgments. The Appellants contended that lack of jurisdiction is a fundamental legal issue that can be raised at any stage of the proceeding, citing relevant case laws supporting their position.

3. Jurisdictional Authority: The Department produced documents showing the transfer of Shri A.K. Pawar and the additional charge given to Shri C.M. Mehra by the Chief Commissioner. However, it was clarified that there was no subsequent Order or Notification appointing Shri Mehra to Kolkata-I Commissionerate. The Department argued that the lack of jurisdiction was a procedural issue and should not impede the substantive consideration of duty demand and penalty imposition.

4. Tribunal Decision: After considering the arguments and previous judgments, the Tribunal concluded that Shri C.M. Mehra, not being appointed as Commissioner of Central Excise, Kolkata-I as required by law, lacked jurisdiction to pass the impugned Order. The Tribunal reiterated the legal principle that Central Excise Officers must be appointed by Gazette Notification to perform statutory duties lawfully. The Tribunal upheld the Appeal, waived the requirement of predeposit, and set aside the impugned Order, emphasizing the importance of compliance with legal procedures for both tax officials and taxpayers.

5. Final Remarks: The Tribunal highlighted the seriousness of not appointing Commissioners as per legal requirements but emphasized the necessity to apply the law uniformly without exceptions. The decision to allow the Stay Petition and the Appeal was based on the established legal principles regarding jurisdiction and appointment procedures under the Central Excise Act and Rules.

This detailed analysis of the judgment highlights the central issue of lack of jurisdiction of the Commissioner of Central Excise, Kolkata-I in confirming duty demand and imposing a penalty, along with the legal arguments, evidences presented, and the Tribunal's decision based on established legal principles and precedents.