1990 (5) TMI 114 - AT - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the authority issuing the show cause notice.
2. Validity of the show cause notices issued by the Assistant Director, Directorate of Anti-Evasion.
3. Admissibility of raising the jurisdiction issue at the appellate level.

Issue-wise Detailed Analysis:

1. Jurisdiction of the authority issuing the show cause notice:

The appellants raised a preliminary objection that the show cause notices were issued by an authority not vested with the powers of an Assistant Collector of Central Excise. They argued that the Assistant Director, Directorate of Anti-Evasion (C.E.), was not empowered to issue such notices, rendering the proceedings void ab initio.

The respondent contended that prior to the bifurcation of the Directorate of Anti-Evasion from the Directorate of Revenue Intelligence, the officers of the Anti-Evasion Directorate functioned as an administrative wing of the DRI and should be presumed to have been vested with the same powers.

2. Validity of the show cause notices issued by the Assistant Director, Directorate of Anti-Evasion:

The appellants argued that the Directorate of Anti-Evasion (DAE) became an independent entity from the Directorate General of Revenue Intelligence (DGRI) on 1-4-1986. Before this date, the officers of DAE were not appointed as Central Excise officers and were not invested with the requisite powers. They referenced several notifications, including Notification No. 157/69, which did not include officers of DAE, and Notification No. 191/84, which invested the Director of Anti-Evasion with the powers of a Collector of Central Excise.

The respondent maintained that the officers of DAE should be presumed to have the same powers as those of DRI due to their administrative association. However, the Tribunal noted that the issuance of specific notifications, such as Notification No. 191/84 and its amendment by Notification No. 166/85, indicated that the CBEC did not consider the officers of DAE to be automatically vested with such powers.

3. Admissibility of raising the jurisdiction issue at the appellate level:

The respondent argued that the appellants had not raised the jurisdiction issue before the lower authorities and thus could not do so at the appellate level. They cited several decisions, including M/s. Pannalal Binjraj and Others v. Union of India and Others, where the Supreme Court refused to entertain jurisdictional objections raised belatedly.

The appellants countered that an action without jurisdiction is void ab initio and can be challenged in collateral proceedings. They cited cases such as Commissioner of Sales Tax, U.P. v. Sarjoo Prasad Ram Kumar, where the Supreme Court held that an objection as to jurisdiction goes to the root of the case and can be raised at any stage. The Tribunal agreed with the appellants, noting that the jurisdictional issue could be addressed at the appellate level as it goes to the very root of the subject matter.

Conclusion:

The Tribunal concluded that the show cause notices signed by the Assistant Director (AE) were without jurisdiction and thus invalid. Consequently, the adjudication proceedings based on these notices were also invalid. The Tribunal allowed all the appeals, set aside the impugned orders, and provided consequential relief to the appellants. The Central Excise authorities were granted the liberty to issue fresh show cause notices if otherwise possible.