1993 (12) TMI 63 - HC - Central Excise

Summary

Issues Involved:
1. Competence of the second respondent-Collector to conduct investigations outside his territorial jurisdiction.
2. Requirement to furnish copies of documents relied upon in the show cause notice.
3. Validity and specificity of the show cause notice.
4. Jurisdiction over Bush India, located outside the territorial jurisdiction of the second respondent.

Summary:

1. Competence of the second respondent-Collector to conduct investigations outside his territorial jurisdiction:
The primary issue was whether the second respondent-Collector had the authority to investigate outside his territorial jurisdiction. The petitioners argued that the second respondent's jurisdiction was confined to his territory as per Rule 2(ii)(k) of the Central Excise Rules, 1944, and Section 2(b) of the Central Excises and Salt Act, 1944. They contended that material collected outside this jurisdiction could not be relied upon. The court, however, found that the second respondent had the jurisdiction to enforce the provisions of the Act concerning excisable goods manufactured within his territory. The court held that tax evasion investigations might require collecting materials from outside the territorial jurisdiction, and such investigations could be conducted through competent officers of the respective areas. The court emphasized that the purpose of the law would be defeated if the second respondent had to seek additional powers for each investigation outside his territory. The court also noted that the legality of search and seizure does not vitiate the relevancy of the evidence collected, citing precedents like Pooran Mal v. Director of Inspection (Investigation) of Income Tax and Dr. Partap Singh v. Director of Enforcement.

2. Requirement to furnish copies of documents relied upon in the show cause notice:
The petitioners contended that they were not furnished with copies of the documents relied upon in the show cause notice, which amounted to a denial of reasonable and adequate opportunity. The court clarified that the requirement was to furnish copies of the materials relied upon, not merely referred to, in the show cause notice. The court noted that the show cause notice allowed the petitioners to inspect and take extracts of the seized documents. The petitioners did not take advantage of this offer and instead filed writ petitions. The court found no de facto illegality in the proceedings as the petitioners were informed and given opportunities to access the documents.

3. Validity and specificity of the show cause notice:
The petitioners argued that the show cause notice was vague and uncertain. The court dismissed this contention, stating that the show cause notice, when read with its annexures, provided detailed facts and clearly outlined the basis of the action. The court found the notice to be sufficiently specific and valid.

4. Jurisdiction over Bush India, located outside the territorial jurisdiction of the second respondent:
Bush India contended that it was located outside the territorial jurisdiction of the second respondent and that any allegations against it should be investigated and adjudicated in Bombay. The court reiterated that when the cause of action for investigation and adjudication arose in Bangalore, the second respondent had jurisdiction. The court noted that Bush India was alleged to have connived and abetted with the Manufacturing Company to reduce tax liability, and thus, the second respondent had the authority to issue a notice under Rule 209A and adjudicate the matter.

Conclusion:
The court dismissed the writ petitions, finding no merit in the arguments presented. The second respondent's actions were within his jurisdiction, and the procedural requirements were adequately met. The rule was discharged.