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2010 (6) TMI 662 - HC - Central ExciseJurisdictional issue pertaining to the Committee Commissioner of Central Excise Dibrugarh had by his order dated 23-4-2008 dropped all the charges brought against M/s. Kothari Products Ltdand consequentially allowed its products to be cleared from the factory - Members of the Committee on a consideration of the materials on record adjudged the said decision of the Commissioner and directed him (Commissioner of Central Excise Dibrugarh) to apply to the Tribunal for a correct determination of the points as enumerated in its order dated 24-7-2008 Respondents preferred against the decision dated 24-7-2008 of the Committee questioned its (Committee) jurisdiction and authority contending that the composition thereof was not in accordance with the mandatory requirements of Section 35(1B) of the Act and the relevant Rules framed thereunder According to them two members thereof namely Shri Rajendra Prasad who acted as Chief Commissioner of Central Excise Shillong and Shri Hrishikesh Sharan who did so as Chief Commissioner of Central Excise Kolkata had no locus standi to discharge their said roles as the necessary notification under Rule 3(2) of the Central Excise Rules 2002 to that effect which is obligatory had not been issued. Held that - By the Notification No. 23/2005-C.E. (N.T.) dated 13-5-2005 issued by the Joint Secretary to the Government of India Finance Department the appointment of Chief Commissioners of Customs to act as the Chief Commissioners of Central Excise for the purpose of constitution of committees under Section 35B(1B) of the Act was notified. The constitution of such committees was similarly notified by the Notification No. 24/2005-C.E. (N.T.) of the even date. At Sl. No. 21 of the said notification the composition of the committee for the area of jurisdiction (Dibrugarh/Shillong) has been indicated as hereunder 1.Chief Commissioner of Central Excise Shillong. 2.Chief Commissioner of Central Excise Kolkata. Board is empowered to specify the jurisdiction of a Chief Commissioner of Central Excise Commissioner of Central Excise or Commissioner of Central Excise (Appeals) it has to essentially do so by means of a notification. Rule 3(2) only enables the Board to confer the jurisdiction of the Officers mentioned therein if it so chooses but once it decides to do so it has to cause the same to be effected only by a notification and not otherwise. Date on which the Committee involved herein had rendered its decision i.e. 24-7-2008 there was no notification conferring jurisdiction on Shri Rajendra Prasad to function as the Chief Commissioner of Central Excise Shillong. Moreover there was no regular incumbent in the office of the Central Excise Shillong Zone. The Office Order No. 146/2008 dated 23-6-2008 whereby the Chief Commissioner of Customs Kolkata had been assigned the additional charge of the Chief Commissioner of Central Excise Shillong for the limited purpose of reviewing the orders passed by the Commissioners of Dibrugarh and Shillong until further orders not only on the face of it was a make shift arrangement but also not at all in conformity with the peremptory prescription of Rule 3(2) of the Rules. As by the said order the Chief Commissioner Customs was being endowed with the jurisdiction to act as the Chief Commissioner of Central Excise the same could not have been effected without a notification ordained by Rule 3(2). This coupled with the admitted absence of regular incumbent in the office of the Chief Commissioner of Central Excise Shillong, has rendered the proceedings before the Committee comprised of Shri Rajendra Prasad and Shri Hrishikesh Sharan a nulity. Alike the Tribunal this Court has not expressed any opinion on the merits of the case and this determination is limited to the jurisdictional issue pertaining to the Committee - On a totality of the consideration no merit in the appeal accordingly dismissed.
Issues Involved:
1. Validity of the Committee's appointment under Section 35B of the Central Excise Act, 1944. 2. Jurisdiction and authority of the Committee members. 3. Requirement of notification under Rule 3(2) of the Central Excise Rules, 2002. Issue-wise Detailed Analysis: 1. Validity of the Committee's Appointment under Section 35B of the Central Excise Act, 1944: The primary issue in this case revolves around the validity of the Committee's appointment under Section 35B of the Central Excise Act, 1944. The Tribunal's judgment dated 26-9-2008 allowed the appeals on the ground that the Committee members were not validly appointed. The respondents argued that the Committee's composition did not meet the mandatory requirements of Section 35(1B) of the Act and the relevant Rules. Specifically, the members, Shri Rajendra Prasad and Shri Hrishikesh Sharan, were not validly appointed as Chief Commissioners of Central Excise for the relevant areas, as no notification under Rule 3(2) of the Central Excise Rules, 2002, was issued. The Tribunal upheld this objection, rendering the Committee's order dated 24-7-2008 without jurisdiction. 2. Jurisdiction and Authority of the Committee Members: The respondents contended that the Committee members lacked the jurisdiction and authority to act in their roles because the necessary notification under Rule 3(2) of the Central Excise Rules, 2002, was not issued. The Revenue argued that the word "may" in Rule 3(2) did not impose a mandatory requirement for such a notification and that existing office orders were sufficient to confer the necessary jurisdiction. However, the Tribunal and the High Court disagreed, emphasizing the mandatory nature of the notification under Rule 3(2). The Court held that the omission to issue a notification specifying the jurisdiction of the Chief Commissioners rendered the Committee's actions null and void. 3. Requirement of Notification under Rule 3(2) of the Central Excise Rules, 2002: The Court analyzed the relevant legal provisions, including Section 2(b), 35B(1B), and 35E of the Central Excise Act, 1944, and Rule 3 of the Central Excise Rules, 2002. It concluded that the Board must issue a notification to confer jurisdiction on Chief Commissioners of Central Excise. The Court emphasized that the word "may" in Rule 3(2) should be interpreted as mandatory, requiring the issuance of a notification published in the official gazette. The absence of such a notification for Shri Rajendra Prasad to function as the Chief Commissioner of Central Excise, Shillong, rendered the Committee's actions invalid. The Court cited the Supreme Court's decision in Bachahan Devi v. Nagar Nigam Gorakhpur, which held that "may" could imply a mandatory requirement in certain contexts. Conclusion: The High Court upheld the Tribunal's decision, affirming that the Committee's composition was not in accordance with the mandatory requirements of the law. The absence of a notification under Rule 3(2) specifying the jurisdiction of the Committee members rendered their actions null and void. The appeal was dismissed, and the Court did not express any opinion on the merits of the case, limiting its determination to the jurisdictional issue.
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