2010 (5) TMI 912 - HC - Central Excise

Summary

Issues Involved:
1. Legality of Summons Issued u/s 14 of the Central Excise Act, 1944.
2. Petitioner's Non-appearance and Authorization of Senior Manager.
3. Department's Justification for Summoning the Managing Director.
4. Applicability of Circulars and Judicial Precedents.

Summary:

1. Legality of Summons Issued u/s 14 of the Central Excise Act, 1944:
The petitioner, Managing Director of M/s Aryan Ispat Power Pvt. Ltd., challenged the summons issued to him by the Central Excise authorities u/s 14 of the Central Excise Act, 1944, as arbitrary and illegal. The court examined Section 14, which empowers Central Excise Officers to summon any person for evidence or document production necessary for an inquiry.

2. Petitioner's Non-appearance and Authorization of Senior Manager:
The petitioner, citing old age and health issues, authorized the Senior Manager (Finance) to appear on his behalf, arguing that the Senior Manager was well-versed with the company's excise matters. The petitioner contended that his personal appearance was unnecessary as the company had cooperated fully by providing documents and statements through authorized representatives.

3. Department's Justification for Summoning the Managing Director:
The Department argued that the summons were part of an investigation into alleged excise duty evasion. They contended that the Managing Director's presence was necessary for clarifications and that the Senior Manager could not answer queries related to operational activities. The Department emphasized that the petitioner had not appeared despite multiple summonses, indicating a lack of cooperation.

4. Applicability of Circulars and Judicial Precedents:
The petitioner relied on a circular (C.B.E. & C Letter F.No.208/122/89-CX.6 dated 13.10.1989) instructing that Managing Directors should not be summoned unless absolutely necessary. The court noted that the circular, though issued in a different context, emphasized that summons should not be used to harass top management. Judicial precedents from the Calcutta High Court and the Supreme Court were cited, highlighting that directors not involved in day-to-day operations should not be unnecessarily summoned.

Conclusion:
The court found no specific reason for the petitioner's personal appearance, as the Department could not demonstrate that he possessed any crucial documents or information. The court directed the petitioner to provide a Board resolution ratifying the authorization of the Senior Manager and an affidavit undertaking that the authorized persons would cooperate fully. If the petitioner complied, his personal appearance would be dispensed with; otherwise, the Department could proceed with the summons.

Disposition:
The writ petition was disposed of with the above directions.