1980 (2) TMI 83 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the special inspection conducted on 15-10-1961 and subsequent dates.
2. Denial of copies of depositions of two inspectors and its impact on principles of natural justice.

Detailed Analysis:

1. Legality of the Special Inspection:

The appellant argued that the special inspection conducted on 15-10-1961 and subsequent dates was unauthorized because, under Rule 196 of the Central Excise Rules, such an inspection required the sanction of the Collector of Central Excise, which was neither obtained nor communicated to the appellant. The court noted that the appellant had not raised this issue in the original writ petition (W.P. No. 1394 of 1961) and had not questioned the inspectors' authority at the time of inspection. The court referred to the affidavit filed in support of the earliest writ petition where the appellant acknowledged the special stock-taking ordered by the Collector, albeit without receiving a copy of the order.

The court further cited the judgment of V. Ramaswami J., which confirmed that an order for special stock-taking was indeed issued by the Collector on 17-10-1961, as evidenced by a letter written to the appellant's consultant. The court emphasized that this fact was not denied in the grounds of appeal. Therefore, the court concluded that there was an order from the Collector on 17-10-1961, and this was communicated to the appellant's consultant.

Even if there had been no sanction from the Collector, the court opined that the result of the stock-taking could not be ignored or deemed illegal. The weighment sheets were attested by the appellant himself, and he did not question the correctness of the weighments at the earliest opportunity. The appellant had admitted the existence of the shortage in his affidavit but contended that he was not responsible for it. Thus, the court held that the stock-taking results could be lawfully acted upon by the departmental officers.

2. Denial of Copies of Depositions:

The appellant contended that the refusal to provide copies of the depositions of two inspectors from the departmental proceedings constituted a failure of the principles of natural justice, preventing him from effectively defending himself. The court referred to the observations made by a Division Bench in a previous writ appeal, which suggested that denying the appellant the copies might not align with the principles of natural justice. However, the court noted that the Division Bench's observations were made in a different context, where the issue was the erroneous rejection of an appeal by the Central Board of Revenue.

The court agreed with the learned Judge's conclusion that the non-supply of the depositions did not prejudice the appellant. The appellant had signed the weighment sheets during the special inspection and had not questioned the correctness of the weighments or the existence of shortages in his earliest writ petition. The appellant's contention was limited to his non-responsibility for the shortages, attributing them to the machinations of his political opponents. Therefore, the court concluded that the denial of the depositions did not affect the fairness of the proceedings.

Conclusion:

The court dismissed the writ appeal, upholding the legality of the special inspection and concluding that the denial of copies of the depositions did not violate the principles of natural justice. The court found that the appellant had not been prejudiced by the non-supply of the depositions and that the stock-taking results were valid and could be acted upon by the departmental authorities.