2013 (3) TMI 340 - AT - Central Excise

Jurisdiction to pass an adjudication order - monetary limit - as per jurisdictional Commissioner the order passed by the Assistant Commissioner is not legally correct as the monetary limit for adjudication by the Assistant Commissioner is only up to ₹ 5 lakhs in terms of Board s Circular no. 865/3/2008-CX dated 19/02/2008 and, therefore, he filed an appeal before the lower appellate authority on the ground of exceeding jurisdiction - Held that - The demand has been confirmed by the Assistant Commissioner under the provisions of section 11A(1) of the Central Excise Act, 1944 and the said section empowers a Central Excise Officer to issue notice in cases where Excise duty has not been levied or paid or short-levied or short-paid or erroneously refunded. The Central Excise officer referred to therein is the officer competent to assess and determine the duty liability. Under the Excise law it is the Superintendent of Central Excise who is the assessing officer and, therefore, the notice issued by the jurisdictional Assistant Commissioner, who is a superior authority, is perfectly valid in law and, therefore, he is competent to adjudicate the duty not levied or short-levied or erroneously refunded. Power of adjudication prescribed by the Board vide a Circular dated 19/02/2008 is only an administrative order and it is meant for smooth and efficient running of the administration. Such circular cannot take away the power vested on a Central Excise officer under the provisions of the Central Excise Act. See Pahwa Chemicals Pvt. Ltd. vs. Commissioner of Central Excise, Delhi 2005 (2005 (2) TMI 136 - SUPREME COURT OF INDIA) wherein held that the administrative directions of the Central Board of Excise & Customs allocating different works to various classes of officers cannot cut down jurisdiction vested in them by statute and may be followed by them at best as a matter of propriety. Thus the Assistant Commissioner, who is a Central Excise Officer was statutorily competent to decide the matter. Therefore, setting aside such an order by the lower appellate authority, though on appeal filed by the Revenue, is clearly unsustainable and bad in law and, therefore, the order of the lower appellate authority has to be set aside.

Summary

Issues:
Jurisdictional limits of Assistant Commissioner for adjudication.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI was against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-II. The case involved the confirmation of Central Excise duty demand, interest, and penalty imposed on M/s Ahan Apparels Pvt. Ltd. by the Assistant Commissioner of Central Excise, Powai Division, Mumbai-II. The jurisdictional Commissioner contended that the Assistant Commissioner exceeded the monetary limit for adjudication set by the Board's Circular. The lower appellate authority accepted this argument and set aside the Assistant Commissioner's order. The Revenue, aggrieved by the lack of liberty granted for fresh adjudication, appealed against the appellate authority's decision.

The Additional Commissioner (AR) argued that the lower appellate authority erred by not allowing the competent authority to adjudicate the matter afresh, jeopardizing the Revenue's interests. The Tribunal noted that the Central Excise Act empowers the Central Excise Officer, typically the Superintendent of Central Excise, to issue notices and determine duty liability. The circular setting monetary limits for adjudication is administrative and does not diminish the statutory power of the Central Excise Officer. Referring to a previous case, the Tribunal emphasized that administrative directions cannot curtail officers' jurisdiction granted by statute. As the Assistant Commissioner was competent to decide the matter, the lower appellate authority's decision was deemed unsustainable and set aside.

The Tribunal found no necessity to direct a fresh adjudication, citing the precedent that upheld the validity of the original adjudicating authority's order. Since the respondent did not challenge the original order, the Tribunal decided to restore the order passed by the Assistant Commissioner. Consequently, the impugned order was set aside, and the original adjudicating authority's decision was reinstated. The appeal was disposed of accordingly.