1974 (10) TMI 95 - HC - Central Excise

Issues:
1. Competency of the Collector, Central Excise, to revise the order allowing the petitioner's appeal.
2. Misrepresentation by the petitioner regarding the factory shift and sale of original machinery.
3. Validity of cancellation of petitioner's license based on the sale of factory to another firm.
4. Application of Central Excise Rules regarding transfer of license and entitlement to concession under notification.
5. Legality of canceling the license without valid grounds and breach of license conditions.

Analysis:
1. The judgment addresses the issue of whether the Collector, Central Excise, had the authority to review the order permitting the petitioner's appeal. The Collector's decision was challenged based on the argument that it was not a case of review but a fresh order due to new facts. However, the court found that the facts relied upon were not new and were known to the Department, concluding that the Collector was not authorized to review the earlier order based on these facts.

2. The judgment highlights the misrepresentation by the petitioner regarding the factory shift and sale of original machinery. The authorities were misled by the petitioner's statement that the factory was merely shifted, whereas it was revealed that the original plant and machinery were sold to another firm. The court emphasized that the Collector's reliance on the sale of the factory was not a new fact and was clearly mentioned in previous orders, indicating a misrepresentation by the petitioner.

3. The validity of canceling the petitioner's license based on the sale of the factory to another firm is examined in the judgment. The Collector's decision to cancel the license was primarily based on the sale of the factory and the petitioner's application for an amendment to the license after the sale. However, the court found that the cancellation was not justified as the sale did not warrant canceling the license, and the petitioner was entitled to apply for a fresh license under the Central Excise Rules.

4. The application of Central Excise Rules regarding the transfer of the license and entitlement to concession under a notification is discussed in the judgment. It is highlighted that the concession under the notification was available to licensees before a specific date, and the transfer of the license to another party required obtaining a fresh license. The court emphasized that the concession granted to another firm did not justify canceling the petitioner's license, as it was legally incorrect.

5. The judgment also addresses the legality of canceling the license without valid grounds and breaching the license conditions. It emphasizes that a license can only be revoked or suspended if there is a breach of conditions or provisions of the Act. The court concluded that the cancellation of the petitioner's license was unjustified and lacked legal basis, leading to the quashing of the orders by the Collector, Central Board of Excise and Customs, and the Government of India.

In conclusion, the judgment ruled in favor of the petitioner, allowing the petition and quashing the orders canceling the license. The court emphasized the misrepresentation by the petitioner, the incorrect application of Central Excise Rules, and the lack of valid grounds for canceling the license as key factors in its decision.

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