2010 (12) TMI 1132 - HC - Central Excise

Summary

Issues Involved: Interpretation of statutory provisions regarding the incorporation of penal provisions from one Act into another Act.

Analysis:
1. The High Court was tasked with determining whether the provisions of sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, incorporated by reference the provisions of the Central Excise Act, 1944, concerning confiscation of goods, offenses, and penalties. The Court directed the Tribunal to provide a statement of the case under the Central Excise Act, 1944 for this purpose.

2. Despite the respondent not being served, the Court proceeded with the hearing due to the matter being conclusively settled against the Revenue by a Supreme Court decision. The Court considered the issue resolved by a previous Supreme Court judgment and the relevance of penal provisions under the Additional Duties of Excise Act.

3. The Revenue argued that penalties would be attracted for non-payment of duty under the Additional Duties of Excise Act based on a Constitution Bench decision. The Tribunal had relied on a Delhi High Court decision, which the Revenue contested, emphasizing the applicability of penal provisions from the Central Excises and Salt Act to the levy and collection of duty under the Additional Duties of Excise Act.

4. The Apex Court's decision in Collector of Central Excise, Ahmedabad v. Orient Fabrics Pvt. Ltd. clarified that the breach of the Additional Duties of Excise Act did not entail penalties or confiscation of goods. The Court highlighted the necessity of a clear legal authority for imposing penalties, citing Article 265 of the Constitution.

5. The Court differentiated the issues in the present case from those in Ujagar Prints v. Union of India, emphasizing that the controversy revolved around the incorporation of penal provisions from the Central Excise Act into the Additional Duties of Excise Act. The decision in Orient Fabrics case directly settled the matter at hand.

6. Ultimately, the Court answered the reference in the negative, stating that the provision of sub-section (3) of Section 3 of the Additional Duties of Excise Act did not incorporate the penal provisions of the Central Excise Act. The judgment was based on the precedent set by the Apex Court in the Orient Fabrics case, concluding that penalties were not automatically applicable under the Additional Duties of Excise Act.

7. The reference was disposed of in line with the Apex Court's decision, affirming that the controversy in the present case was conclusively resolved by the Orient Fabrics judgment, which clarified the absence of penal provisions in the Additional Duties of Excise Act.