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TMI Blog2012 (11) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... olding the post of General Manager (F &A) appeared before the authority and gave his statements. Thereafter the Commissioner, Central Excise & Service Tax, Jamshedpur, issued summon under Section 14 of the Central Excise Act, 1944 on 11.11.2011 through the Superintendent (Prev.), Central Excise, Jamshedpur, directing the petitioner, Sri Sudhir Deoras, Managing Director of the petitioner-company, to appear personally before the said authority. In the said summon, though it is stated that he should bring with him information, documents and records specified in the schedule, which may in his knowledge or in his control or in his possession, however, in the schedule, it is specifically mentioned "NIL". Therefore, the present petitioner has been summoned to appear before the said authority in the proceedings of inquiry, which may be, to give evidence and, as per the notice, not for production of documents. The petitioner has challenged the summon on the ground that summon has been issued without there being any reason and in spite of the fact that the authorized officer of the company and who is General Manager (F & A), who has full knowledge of the facts of the case and who is dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of inquiry under section 14 of the Act of 1944, what is the scope and jurisdiction of the Enquiry Officer in the matter of summoning a person when the assessee is a company and in the opinion of the company, the authorized person has already appeared in inquiry and gave statements which the company is accepting to be the statements given correctly and fully to the Enquiry Officer, whether, in that situation, merely for the purpose of obtaining information with respect to interpretation of a document, company's Managing Director can be summoned even if the power under section 14 (1) and (2) of the Act of 1944 are wide enough to summon any person whose attendance is considered necessary by the Enquiry Officer? 5. It is submitted by the learned counsel for the Revenue that the representative of the writ petitioner, Mr. Ashim Roy, was summoned twice and he gave his statements but he gave evasive reply or shown his inability to explain the facts and, therefore, the Officer found it just and proper to summon the Managing Director of the petitioner-company to give statement in the inquiry. 6. We considered the submissions of the learned counsel for the parties and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 14 of the Act of 1944 has a very wide and very pervasive power and can summon any person to give evidence or to produce documents. Such power is very necessary power and was required to be given to such officer so that complete inquiry may be conducted by him. 7. Now the question arises as to how this power is to be exercised - whether exercise of such vast and important power, if is regulated by reasonableness, will amount to any unreasonableness restriction upon the power of such officer? We are of the considered opinion that this power is given to such officer so that he may discharge his legal obligation effectively but does not authorize him to act as per his whims or act but in reasonable manner. Reasonableness is inherent in any exercise of power. In section 14 itself it is provided that one can be summoned in the inquiry if in the opinion of such officer, presence of any person is "consider necessary", which is the only requirement for exercise of power to summon any person and if that is kept in mind and thereafter such officer summons any person whose appearance in inquiry is necessary, it will be reasonable exercise of the power by such officer. Reasonableness dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I cannot express my opinion whether this means a Turnkey/Composite contract to the best of his knowledge". It is also stated that "ownership of the plant and equipments (including spare parts) procured in the country where the site is located shall be transferred to the employer when the plant and equipments are loaded on to the mode of transport to be used to convey the plant and equipments". In the reply, it has been stated that "It is clear from the above (i) that the employer has not yet taken the care, custody and the risk of the equipment delivered by TRF to them till now. The employer will take over the goods together with the care, custody and the risks only after issuance of the completion certificate. Thus, ownership of the goods has not yet been passed. (ii) It falsifies, the statement of Sri Roy who told that the ownership of the goods gets transferred as per Sale of Goods Act, as the risk is still with TRF. (iii) It also makes suspicious and requires to be ascertained whether the statement dated 16.6.2010 of Sri Roy who in answer to Q.No.11 stated that the goods were not in a ready state for operation when the transfer of title took place". 10. In totality, it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives in interest for the purpose of contradicting, varying, adding to or subtracting from its terms. The principles of section 91 of the Indian Evidence Act and 92 of the Indian Evidence Act spell out what can be proof of written contract and section 91 of the Indian Evidence Act requires production of the contract itself and section 92 of the Indian Evidence Act excludes oral evidence and excludes oral agreement. This principle can be applied in the light of the legal position that when the deed and document are unambiguous and clear, neither by pleadings, nor by evidence its contents can be varied or altered by the parties. 12. In the light of this legal position as well as in the light of the nature of the affairs of any public limited company, the Officer under section 14 of the Act of 1944 should examine the relevant issue before summoning any person to give evidence because of the reason that every person of the company may not be a relevant person at all for the purpose of inquiry may he be holding highest position in the company because of the reason mentioned above. In that situation and to avoid unnecessary delay, it is always appropriate to first ask the company to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he should not summon unless it is required for the purpose of an inquiry. Sometimes such summon to the company's officer may also be misunderstood that the same has been issued by the Officer to show his authority. It is also not correct. In dealing with the public by all Officers having power to summon, such caution is required to be taken that no other impression be gathered by anybody; either by the high officers in the company or any of the persons who has been summoned by the authority, nor by the authority himself that either is only trying to show his authority or superiority. If this impression is removed by both the parties, then only enquiry may proceed smoothly without there being delay and thus, this will avoid unnecessary challenge to the orders of summoning the persons in inquiry. 13. At this stage, it will be very relevant to mention here that we have already noticed the provision of sub-section (3) of section 14 of the Act of 1944, wherein and whereby proceedings under section 14 of the Act of 1944 have been declared to be judicial proceedings and having consequence under section 193 and 228 of the Indian Penal Code. There may be possibility of avoidance of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of deciding of a larger issue to examine the scope and power of the Assessing Officer under section 14 of the Act of 1944, we are passing this order and we also are of the view that it is not necessary for the Assessing Officer to record reasons for summoning of witnesses in each and every case.
However, whenever action of the Assessing Officer is questioned in the matter of summoning witness, as is the case made out prima facie by the petitioner, then respondents may show reasons for summoning of the witnesses from record.
16. Here in this case, we are of the considered opinion that at this stage of inquiry, the evidence of the Managing Director may be dispensed with, with permission to the Assessing Officer to take a decision subsequently and if necessary, then to summon the Managing Director himself. It is also made clear that in case, the Assessing Officer proceeds to summon any of the witnesses of the company, he need not to record any reason and may summon any witness.
17. In view of the above observation, the summon dated 11.11.2011 contained in Annexure - 1 is quashed with liberty to the Assessing Officer to proceed in the light of the observations made above. X X X X Extracts X X X X X X X X Extracts X X X X
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