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TMI Blog1993 (1) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise duty, and without following the procedure as prescribed under the Central Excise Rules, 1944 (hereinafter referred to as the Rules ). The appellants were required to show cause to the Additional Collector, Central Excise, Indore, as to why Central Excise duty amounting to Rs. 48,558.41 on 1,26,12,575 hand-made branded biris removed during the financial years 1981-82 to 1984-85 should not be recovered from them under Rule 9(2) of the Rules, read with Section 11A of the Act, and why penalty should not be imposed upon them under Rules 9(2), 52A, 209 and 226 of the Rules. 3. In the Order-in-Original issued from file No. V (Ch. 24) 15-1/88/Adj., on 12-5-1989 by the Additional Collector, Central Excise, Indore, the appellants were ordered to pay Central Excise duty on hand-made branded biris manufactured during the period 10-10-1983 to 1984-85 under Section 11A of the Act. The Assistant Collector, Central Excise, Bhilai was asked to work out the Central Excise duty afresh on hand-made branded biris removed during the period 10-10-1983 to 1984-85, and was asked to demand the same from the appellants. The Additional Collector, Central Excise, Indore also imposed a pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants firm was working under physical control system and the assessments of the firm had already been finalised under physical control system. 5. The case was fixed for hearing on 16-12-1992 when the Order-in- Original passed by the Additional Collector, Central Excise, Indore was assailed by the appellants on the grounds of (1) Jurisdiction, (2) Limitation, (3) Adjudication Order not being a speaking Order, and (4) The Order being deficient in as far as the quantification of the demand was concerned. 6. With regard to the jurisdiction, it was submitted that the show cause notice had been issued by the Additional Collector while under Section 11A of the Act, the demand of duty beyond a period of 6 months could only be made by the Collector of Central Excise. 7. Shri N.L. Srivastava, the learned Advocate appearing for the appellants invited attention to Tribunal s decision in the case of Eicobex Metals (P) Ltd. v. Collector of Central Excise [1992 (58) E.L.T. 108 (Tribunal)] in which it has been held by the Tribunal that the show cause notice issued by the Deputy Collector of Central Excise, Jaipur on 6-3-1986 demanding duty of Rs. 11,83,19,476.94 for the period from 1-3-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been issued by the Deputy Collector of Central Excise. In the case before us, the show cause notice has been issued by the Additional Collector, Central Excise. Thus the decision of the Tribunal in the Eicobex Metals case is not applicable to the case before us. 14. At the outset, we may refer that the appellants have come to the Tribunal in appeal against the Order-in-Original passed by the Additional Collector of Central Excise, as under the scheme of the Act and the Rules, the Additional Collector of Central Excise is an officer not subordinate to the Collector. The Customs, Excise and Gold (Control) Appellate Tribunal, Regional Bench, by the Order, dated 12-2-1985 [referred to in the case Bansal Industrial Gases (Bihar) Ltd. v. Collector of Central Excise - 1988 (37) E.L.T. 347 (Cal.)], considered all the case laws for the determination of the question whether the post of an Additional Collector is lower in rank to the post of Collector of Central Excise or not and held that the post of Additional Collector of Central Excise was not lower in rank to the post of Collector of Central Excise and as such the appeal would lie to the appellate Tribunal in view of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order or final order in the appeal to be filed by the petitioner. Against this order the petitioner filed another application before this Court whereupon I disposed of the writ application on 15-1-1985 to refile the appeal before CEGAT, Calcutta, which was returned by the Collector of Central Excise (Appeals), Calcutta by the order dated 27-10-1984, within a period of three weeks from that date and the said authority will decide the issue about the maintainability of the appeal before the Tribunal in view of the two decisions cited by the petitioner which were reported in 1983 (13) E.L.T. 1964 and 1983 (12) E.L.T. 645 and other decisions that might be placed before the Tribunal within a month from the date of presentation of appeal. The impugned order was passed pursuant to the direction given by me on 15th of January, 1985 by which the Customs, Excise and Gold (Control) Appellate Tribunal, Regional Bench by the order dated 12th February, 1985 considered all the case laws for the determination of the question whether me post of an Additional Collector is lower in rank to the post of Collector of Central Excise or not, and held that the post of Additional Collector of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord shall be superfluous, void or insignificant. 17. In the case Bansal Industrial Gases (Bihar) Ltd. v. Collector of Central Excise [1988 (37) E.L.T. 347 (Cal.)] decided by the High Court at Calcutta, the question of law involved was whether the Additional Collector, Central Excise is an authority lower in rank to the Collector of Central Excise, or not. In that case the show cause notice had been issued by the Additional Collector of Central Excise, and the Adjudication Order had also been passed by the Additional Collector of Central Excise. 18. The Hon ble High Court observed that when Collector has been defined extensively, and when it was provided that the word Collector includes Additional Collector it must be held that the word Additional Collector is included within the definition of the word Collector . It was added that in order to establish that the post of Additional Collector is subordinate in rank to the word Collector , it must be shown from the Act and the rules framed thereunder that the Additional Collector had been conferred with some specific powers and/or under the provisions of the Act, it could be found out that the Additional Collector is inferi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Collector is a Collector under the rules and that he may exercise the powers of a Collector, notwithstanding any specific conferment of power, by the Board in terms of Section 11A of the Act or any other provisions of the Act, regarding the duties and functions required to be performed by the Additional Collector. It was held that the orders passed in terms of the provisions of Section 11A of the Act by the Additional Collector were passed by an authority who had competent jurisdiction, and, therefore, they did not suffer from want of jurisdiction. 23. Thus, the plea taken on behalf of the appellants that the Additional Collector had no jurisdiction to issue show cause notice in this case merit rejection. 24. It may be added that in a number of cases the Tribunal has taken a view that in case where short-levy has arisen by reason of fraud, collusion or any wilful mis-statement or suppression of facts the competent authority to issue show cause notice is the Collector. But in none of those cases, the show cause notice had been issued by an Additional Collector. 25. In the case - Mysore Pre-Fabs and Pre-fabs India v. Collector of Central Excise, Bangalore [1987 (27) E.L.T. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Additional Collector. The notice invoking the extended period of limita tion had been issued by Officers lower in rank to that of Collector. 30. As we have come to finding that Collector includes Additional Collector, we hold that there is no infirmity with regard to jurisdiction of the Additional Collector issuing show cause notice invoking an extended period of limitation. 31. As regards the rest of the points urged before us, as we propose to accept the appeal on merits of the case/we do not consider it necessary to deal with them. 32. Now we come to the merits of the case. 33. The case of the department is based on the 32 records made available by one Shri Mahendra Kumar Dongre, an ex-employee of the appellant firm. Reliance has also been placed on his statement in which he has alleged evasion of Central Excise duty by the said firm. 34. Shri Dongre handed over the records to the Central Excise department after leaving his job. These records were reported to be in his custody even after he was no longer concerned with the said firm. The records pertain to the period prior to 1985 while they were made available to the department in 1986. The statement was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 19-8-1986, Shri Dongre had given figures of evasion as per his knowledge. No basis had been indicated by him as to how he has arrived at those figures of evasion. 44. There is no corroboration of the testimony of Shri Dongre either from the conduct of the parties or the surrounding circumstances. In our considered view, the testimony of the complainant was not enough to establish the charge against the appellants, in this case. 45. No independent investigations had been made to substantiate the figures of production of biris as arrived at on the scrutiny of the records made available by Shri Dongre. The main raw material for production of biris is the tobacco. No investigations have been made with regard to the source of supply of such tobacco. There is nothing in the Order passed by the Additional Collector as from where the tobacco was procured and how the biris alleged to have been produced clandestinely were disposed of. There is no mention about the sale proceeds. There is no finding on these important points in the Order-in- Original. 46. No seizure of any biris had been effected. 18 records recovered by the department subsequent to the complaint by Shri Dongre w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was working under physical control system. The records and documents recovered from them subsequent to the enquiries made on receipt of the complaint from Shri Dongre did not reveal anything incriminating against them. Except the statement by Shri Dongre and the records made available by him there is nothing to establish clandestine production and removal of biris on which the duty has been confirmed in the-Order-in-Original passed by the Additional Collector, Central Excise, Indore. As we have noted above, Shri Dongre had a grudge against the appellant firm and wanted to implicate them for the dispute he had with them. In our considered view, in the circumstances of the case, it is not proper to rely upon the testimony of Shri Dongre, without corroboration. 52. Having regard to the foregoing discussions, we consider that the appeal by the appellants merit acceptance and consequently, we set aside the impugned Order with consequential relief to the appellants. 53. As we have accepted the appeal on merits of the case, we do not consider it necessary to discuss the other points raised by the appellants except the question of jurisdiction which we have already discussed above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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