1970 (9) TMI 34 - SC - Central Excise

Validity of a warrant issued by Assistant Collector, Central Excise, Allahabad, authorising the Superintendent, Central Excise, Varanasi to enter certain premises, search the same and seize the documents therefrom challenged Held that - In the notifications which were issued applying, inter alia, Section 105(1) and Section 110 of the Customs Act, 1962 no such changes have been made as can possibly fall within the meaning of the word alterations .Objection was taken only with regard to the word alterations but that word must be understood in the sense in which it was open to the legislature to employ it legitimately and in a constitutional manner. No question is thus involved of delegation, either of any essential legislative functions or any change of legislative policy. It is unnecessary to mention the other provisions because a comparison of the recognised formulae with the text of Section 12 of the Act shows that the provisions of the Sea Customs Act, 1878 were not meant to be incorporated in the Act and were only to be applicable to the extent notified by the Central Government for the purpose of the duty leviable under Section 3. It was in these circumstances that it was held that section 129 of the Sea Customs Act, 1878 could not be made applicable so as to whittle down the substantive right of appeal conferred by Section 35 of the Act. The previous notification under the Sea Customs Act, 1878 stood superseded and no question survives with regard to the validity of the notification issued in 1963 and amended in 1965. Appeal dismissed.

Summary

Issues:
Challenge to validity of warrant issued by Assistant Collector, Central Excise
Interpretation of Section 12 of the Central Excises and Salt Act, 1944
Applicability of Sea Customs Act, 1978 provisions under Section 12 of the Act
Validity of search and seizure under Section 105 of the Customs Act, 1962

Analysis:

Issue 1: Challenge to validity of warrant issued by Assistant Collector, Central Excise
The appellant challenged the validity of a warrant issued by the Assistant Collector, Central Excise, authorizing the search and seizure of documents from the appellant's factory premises. The warrant was issued based on suspicion of evasion of excise duty due to alleged misuse of ammonia for purposes other than chemical fertilizer manufacturing.

Issue 2: Interpretation of Section 12 of the Central Excises and Salt Act, 1944
The appellant contended that Section 12 of the Act conferred excessive powers on the Central Government to modify provisions of the Sea Customs Act, 1878. The argument focused on the scope of "alterations" within Section 12 and whether it allowed for essential changes beyond minor modifications. The court clarified that the power to modify did not extend to making essential changes and was limited to alterations of a minor character.

Issue 3: Applicability of Sea Customs Act, 1978 provisions under Section 12 of the Act
The appellant raised concerns regarding the application of provisions from the Sea Customs Act, 1878 under Section 12 of the Act. The court analyzed the legal framework and established that the Customs Act, 1962 could be read in place of the Sea Customs Act, 1878 under Section 12. The court emphasized that Section 12 empowered the Central Government to apply provisions of the Sea Customs Act with necessary modifications for enforcing Section 3 of the Act.

Issue 4: Validity of search and seizure under Section 105 of the Customs Act, 1962
An argument was presented regarding the validity of search and seizure conducted under the authorization of the Assistant Collector under Section 105 of the Customs Act, 1962. The appellant claimed that the Assistant Collector did not apply his mind to relevant facts while issuing the warrant. The court dismissed this contention, affirming that the warrant was valid and based on sufficient grounds as required by Section 105(1) of the Customs Act, 1962.

In conclusion, the Supreme Court upheld the dismissal of the writ petition challenging the warrant's validity. The court clarified the interpretation of Section 12 of the Act, affirmed the applicability of Customs Act provisions, and validated the search and seizure conducted under the Assistant Collector's authorization. The appeal was dismissed with costs.