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TMI Blog2011 (8) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... d the counsel for both the parties at length. The facts which have given rise to the question of jurisdiction, we may clarify that we are taking note of those facts only which are relevant for deciding this controversy eschewing other details which do not concern the subject matter at this stage. 2. The appellant is in the business of manufacture of Baba‟ brand Scented Chewing Tobacco, Scented Ellaichi, Scented Supari, etc. Though it has a registered office at Chandni Chowk, New Delhi, one of its manufacturing units is situated in Barotiwala, District Solan, Himachal Pradesh. 3. Show cause notice dated 02.04.2003 was issued by the Office of the Deputy Commissioner, Central Excise Division, Shimla to the said unit of the appellant at Himachal Pradesh under Section 11A of the Central Excise Act, 1944 (hereinafter referred to as the Act‟) proposing to raise demand of short paid National Calamity Contingent Duty ( NCCD‟ for brevity) in the sum of ₹ 54,0004/- on additive mixture cleared during the period from 01.04.2002 to 16.10.2002 along with interest under Section 11AB of the Act. Penalty under section 25 of the Central Excise Rules, 2002 (hereinaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs with lead case M/s. Sterling Agro Industries Ltd. Vs. Union of India Ors. (decided on 01.08.2011 in W.P. (C) No.6570/2010, submitting that the said judgment is applicable on all forces in this case and clinches the issue. 7. The submission of Mr. Pritesh Kapur, learned counsel appearing for the appellant, per contra, was that the aforesaid judgment in M/s. Sterling Agro Industries Ltd. (supra) dealt with the question of jurisdiction and was not concerned with statutory appeals. He argued that insofar as statutory appeals like the present one preferred under Section 35G of the Act are concerned, these would be covered by the specific provision and argued that reading these provisions would clearly demonstrate that the appeal was maintainable in the High Court of Delhi. Before we take note of this submission in detail, we would discuss the judgment of M/s. Sterling Agro Industries Ltd. (supra) in the principles for discerning the territorial jurisdiction, which are laid down therein, as the understanding of those principles stated in the said judgment would be necessary to understand and deal with the contentions of the learned counsel for the appellant. 8. In the case b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... few paras of the said judgments along with conclusion stated in Para 32: 30. From the aforesaid pronouncements, the concept of forum conveniens gains signification. In Black‟s Law Dictionary, forum conveniens has been defined as follows: The court in which an action is most appropriately brought, considering the best interests and convenience of the parties and witnesses. 31. The concept of forum conveniens fundamentally means that it is obligatory on the part of the court to see the convenience of all the parties before it. The convenience in its ambit and sweep would include the existence of more appropriate forum, expenses involved, the law relating to the lis, verification of certain facts which are necessitous for just adjudication of the controversy and such other ancillary aspects. The balance of convenience is also to be taken note of. Be it noted, the Apex Court has clearly stated in the cases of Kusum Ingots (supra), Mosaraf Hossain Khan (supra) and Ambica Industries (supra) about the applicability of the doctrine of forum conveniens while opining that arising of a part of cause of action would entitle the High Court to entertain the writ petition as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and depend upon the lis in question. (e) The finding that the court may refuse to exercise jurisdiction under Article 226 if only the jurisdiction is invoked in a mala fide manner is too restricted / constricted as the exercise of power under Article 226 being discretionary cannot be limited or restricted to the ground of mala fide alone. (f) While entertaining a writ petition, the doctrine of forum conveniens and the nature of cause of action are required to be scrutinized by the High Court depending upon the factual matrix of each case in view of what has been stated in Ambica Industries (supra) and Adani Exports Ltd. (supra). (g) The conclusion of the earlier decision of the Full Bench in New India Assurance Company Limited (supra) that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens is not correct. (h) Any decision of this Court contrary to the conclusions enumerated hereinabove stands overruled. 34. Ex consequenti, we answer the reference by partially overruling and clarifying the decision in New India Assurance Company Limited (supra) in the above terms. Matters be listed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision is as under: Section 35G. Appeal to High Court. (9) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section. 14. Learned counsel, thus, submitted that since provisions of Section 100 of the Code of Civil Procedure were applicable to such appeals, it was necessary to fall back on that provision to ascertain whether High Court of Delhi will have jurisdiction or not. For this purpose, he emphasized upon the provisions of sub-Section (1) of Section 100, which makes the following reading: Section 100. Second Appeal. (1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law. 15. His submission that as per the said Section, appeal can lie to the High Court from the order passed in appeal by any court subordinate to the High Court . According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determinative factor for High Court to its territorial jurisdiction. The Court took note of the fact that situs of the Tribunal may vary from time to time, as the Tribunal was exercising jurisdiction over more than one State. In such a case, if the jurisdiction is confirmed merely because the Tribunal decided the appeal, it would lead to disastrous result and therefore, doctrine of cause of action would not be invoked in a case of this nature. It would be of interest to note that the argument of the appellant in the said appeal, predicated on the Constitution Bench judgment of the Supreme Court in the case of Nasiruddin Vs. S.T.A. Tribunal [AIR 1976 SC 331] was that the decision of the Tribunal provides cause of action and therefore, when decision was rendered by the Tribunal in Delhi, High Court of Delhi will have the jurisdiction holding that in case of appeal under Section 35G of the Act, this plea of cause of action would not be determinative, the Court explained the same in the following terms: 12. The said decision proceeded on the basis that part of the cause of action may arise at the forum where the appellate order or the revisional order is sourced. If, thus, a caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is advanced before us, based on sub-Section (9) of Section 35G of the Act and on that basis, relied upon sub-Section (1) of Section 100 of the CPC. The Court proceeded to repel this contention in the following words: 17. There cannot be any doubt whatsoever that in terms of Article 227 of the Constitution of India as also Clause (2) of Article 226 thereof, the High Court would exercise its discretionary jurisdiction as also power to issue writ of certiorari in respect of the orders passed by the Subordinate Courts within its territorial jurisdiction or if any cause of action has arisen therewithin but the same tests cannot be applied when the appellate court exercises a jurisdiction over Tribunal situated in more than one State. In such a situation, in our opinion, the High Court situated in the State where the first court is located should be considered to be the appropriate appellate authority. Code of Civil Procedure did not contemplate such a situation. It provides for jurisdiction of each court. Even a District Judge must exercise its jurisdiction only within the territorial limits of a State. It is inconceivable under the Code of Civil Procedure that the jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the said judgment in this behalf, also needs to be extracted Para 37 and 38: 37. However, we are not oblivious of another line of authority where the situs of the Tribunal was held to be the basis for determination of the jurisdiction of the High Court. In the said decisions, however, the contentions which have been raised before us did not arise for consideration. 38. We have noticed hereinbefore that if the decision of the High Court in the aforementioned question is taken to its logical conclusion, the same would lead to a great anomaly. It would also give rise to the problem of forum shopping. We may notice some examples to show that the determination of the appellate forum based upon the situs of the Tribunal would lead to an anomalous result. For example, 'an assessee affected by an assessment order in Bombay may invoke the jurisdiction of the Delhi High Court to take advantage of the law laid down by it which may be contrary to judgments of the High Court of Bombay. This cannot be allowed. [See Suresh Desai and Associates V. CIT 1998 (230) ITR 912 at 915-917 and CCE V. M/s. Technological Institute of Textile in 76 (1998) DLT 862 (DB]. 20. This judgment, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court to take advantage of the law laid down by it which may be contrary to the judgments of the High Court of Bombay". 7. Learned counsel for the Petitioner has relied heavily on the pronouncements in Canon Steels P. Ltd. -vs- Commr. of Customs (Export Promotion), 2007 (218) ELT 161(SC). Significantly, Ambica Industries was not cited or considered even though it was an earlier decision of a Coordinate Bench. Even more significant is the fact that Canon is irreconcilable with the view of the same learned Judge in Commr. of Central Excise, Delhi-III -vs- Enkay HWS India Ltd., 2002(139) ELT 21(Del) where it had been held that the site of the Commissionerate or Appellate Authority does not determine jurisdiction. It appears evident to us that what prevailed on his Lordship, Dr. Arijit Pasayat in Canon, was the fact that a writ petition had been filed and withdrawn in the High Court of Delhi, to be later filed in the High Court of Punjab and Haryana which also was found not to have jurisdiction. In order to effect substantial justice, their Lordships directed that the writ petition should be heard in New Delhi. What is interesting to note is the fact that the question that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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