2005 (2) TMI 136 - SC - Central Excise

Whether assessee were not entitled to the benefit of the Notifications as they were using the logo of ATR belonging to one M/s. ATR St. Moritz A.G., Switzerland? Held that - Administrative directions cannot take away jurisdiction vested in a Central Excise Officer under the Act. At the highest all that can be said is Central Excise Officers, as a matter of propriety, must follow the directions and only deal with the work which has been allotted to them by virtue of these Circulars. But if an Officer still issues a notice or adjudicates contrary to the Circulars it would not be a ground for holding that he had no jurisdiction to issue the show cause notice or to set aside the adjudication. We, therefore, see no infirmity in the Judgment dated 25th June, 2003. We hold that the Superintendent had jurisdiction to issue show cause notice and the Deputy Commissioner had jurisdiction to adjudicate. We see no reason to interfere. The Appeals stand dismissed

Issues Involved:
1. Jurisdiction of the Superintendent to issue show cause notices.
2. Jurisdiction of the Deputy Commissioner to adjudicate.
3. Entitlement to the benefits of Notification No. 1 of 1993 as amended and Notification No. 16 of 1997.
4. Allegations of suppression of facts and non-payment of duty.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Superintendent to Issue Show Cause Notices:

The appellants contended that the Superintendent was not competent to issue the show cause notices, as alleged suppression of facts was involved. The relevant provision, Section 11A of the Central Excise Act, 1944, as it stood prior to 14th May 1992, required that in cases of fraud, collusion, wilful misstatement, or suppression of facts, the show cause notices could only be issued by the Collector. However, after the amendment on 14th May 1992, the term "Collector" was replaced with "Central Excise Officer," thus broadening the scope of officers who could issue such notices. The Supreme Court held that the Superintendent, being a Central Excise Officer, had jurisdiction to issue the show cause notices.

2. Jurisdiction of the Deputy Commissioner to Adjudicate:

The appellants also argued that the Deputy Commissioner was not competent to adjudicate the matter. The Supreme Court examined the amended Section 11A and Section 2(b) of the Central Excise Act, which defines a "Central Excise Officer" to include various ranks, including the Deputy Commissioner. The Court noted that the Board's Circulars dated 27th February 1997 and 13th August 1997, which allocated adjudication powers based on the amount of duty involved, were administrative directions and could not override the statutory provisions of the Act. Therefore, the Deputy Commissioner had jurisdiction to adjudicate the matter.

3. Entitlement to the Benefits of Notification No. 1 of 1993 as Amended and Notification No. 16 of 1997:

The appellants were engaged in the manufacture of Textile Printing Adhesives and claimed the benefits of the specified notifications. However, it was alleged that they were using the logo of "ATR" belonging to a foreign company, which disqualified them from availing the benefits. The CEGAT, in its order dated 19th July 2001, held that the appellants were not entitled to the benefits of the notifications as they used the brand name of another company on their products. This finding was not contested in the present appeal.

4. Allegations of Suppression of Facts and Non-payment of Duty:

Show cause notices were issued alleging that the appellants had suppressed facts and had not paid the required duty, leading to a demand of Rs. 26,74,875.75 and a penalty of Rs. 26,00,000/-. The Commissioner (Appeals) initially remitted the matter back with directions to re-adjudicate based on whether the suppression of facts was to be retained or not. However, CEGAT directed the Commissioner (Appeals) to decide the matter on merits. The Supreme Court upheld the jurisdiction of the Superintendent to issue the show cause notices and the Deputy Commissioner to adjudicate, thereby dismissing the appeals.

Conclusion:

The Supreme Court dismissed the appeals, holding that the Superintendent had jurisdiction to issue the show cause notices and the Deputy Commissioner had jurisdiction to adjudicate. The Court found no infirmity in the orders of CEGAT and upheld the directions given by the Commissioner (Appeals) to re-adjudicate the matter. The appeals were dismissed with no order as to costs.

← Previous Next →