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TMI Blog1990 (11) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... by the persons appointed by the petitioner, namely the Engineering Systems (P) Ltd. The petitioner itself has a manufacturing unit outside the State of Karnataka close to Bangalore City where it manufactures the very same part to be used in the conveyor system. Therefore, in Bangalore, it styled itself as a mere trader in the goods and traded the goods without paying any excise duty on the same. When the premises of the 3 manufacturers as well as the godowns of the petitioner company were raided by the Excise staff at Bangalore, they discovered the finished products lying in the godowns of the petitioner as well as in the factory premises of some other factories and after seizing the same, issued notice under Section 11A of the Central Excises and Salt Act calling upon the petitioner-company to show cause why the goods manufactured by the 3 units to made use of by them should not be charged to excise levy falling under Tariff Item No. 68 of Schedule I to the Act. Similarly, notices were issued to the 3 manufacturing companies who had been employed on payment of labour charges to produce and manufacture the goods for the petitioner in regard to proceedings which may result in the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner has approached this Court for relief under Articles 226 and 227 of the Constitution of India inter alia by-passing the statutory remedies provided under the Act, inter alia contending that the Additional Collector lacked jurisdiction to make an order of adjudication and consequently an order of confiscation and imposition of penalty. 3. In the third petition, i.e. W.P. No. 6448/1986, the petitioner is Elmech Moulding, a partnership concern having its works at Bangalore and is manufacturer of Trailers. The petitioner is also aggrieved by the order passed by the respondent-Additional Collector of Central Excise, Bangalore, as at Annexure-A to the petition passed on 3-9-1985 and issued on 23-12-1985 after notice under sub-section (1) of Section 11A of the Act. By the impugned order, the petitioner Elmech Moulding, was subjected to duty liability under Tariff Item 15A(2) of the Central Excise Tariff and eligible for exemption claimed under Notification No. 150/82 and the petitioner was called upon to pay the Central Excise duty of Rs. 38,572.68 under Rule 9(2) of the Central Excise Rules read with Section 11A of the Act on 899.13 Kgs. of fibre glass reinforced epoxy l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere securing of additional fittings from the open market and attaching the same to the trailer did not constitute any integral part of manufacturing the trailer and therefore such additional fittings delivered at the request of the customers could not form part of the cost of the trailer which should be exigible to excise duty. That came to be negatived and therefore aggrieved by the order of the respondent - Additional Collector of Central Excise, Club Road, Belgaum. He has approached this Court by-passing the statutory remedy inter alia on the ground that the Additional Collector had no jurisdiction to proceed and adjudicate under sub-section (2) of Section 11A of the Act read with Section 33 of the Act. He has also challenged the validity of Rules 4 and 5 of the Central Excise Rules, 1944, inter alia on the ground that they are arbitrary and ultra vires of the provisions of the Act. 6. Before us, Mr. Chander Kumar appearing for the petitioners in the last mentioned two petitions has submitted, both on questions of fact regarding the exigibility to tax as well as lack of jurisdiction by the Additional Collector to pass the impugned orders. The other Counsel in addition to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration is only the validity of Rules 4 and 5 of the Central Excise Rules. Rule 4 of the Central Excise Rules reads as follows:- "4. Appointment of Officers. - The Central Board of Excise and Customs may appoint such persons as it thinks fit to be Central Excise Officers or to exercise all or any of the powers conferred by these Rules, on such Officers." Rule 5 of the Central Excise Rules reads as follows :- "5. Delegation of powers by the Collector. - Unless the Central Government in any case otherwise directs, the Collector may authorise any officer subordinate to him to exercise throughout his jurisdiction, or in any specified area therein, all or any of the powers of a Collector under these Rules." From the language employed in the Rules which is simple and straightforward, we have no difficulty in holding that rule 4 is for the purpose of conferment of power on the Board to make appointment of Excise Officers and also confer on such Officers such powers as the Board may deem fit. Similarly, in Rule 5, the Collector may authorise any officer subordinate to him to perform the duties of all or any of the duties which he is required to perform. We are unable to see any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y following the session or the successive session aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule should not bemade or the notification should not be issued [ii] notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification." Therefore, when the rules are framed by the Central Government and in terms of sub-section (2) of Section 38, they are laid before each house of Parliament while it is in session to satisfy the other requirements of that sub-section. The rule shall become effective after it is published in the Official Gazette in accordance with the requirement of sub-section (2) of Section 38. In other words, the Legislature would be fully aware of the extent of power conferred on the Board under Rule 4 when it does not make any modification to the Rule as laid before the Legislature. As pointed out by the learned Standing Counsel for the Central Government, Sri Shylendra Kumar, Rule 4 does no more than a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcessive delegation and on that ground we cannot strike it down as unconstitutional or ultra vires of the Act. 15. An attempt was made by Mr. Chander Kumar to contend with reference to some Notifications that the Central Board of Revenue had done something which was not consistent with the provisions of the rules. He made a particular reference to a Notification by which the Board had authorised the Additional Collector to impose penalty and adjudicate in regard to matters involving excisable goods the value of which was only up to Rs. 1,00,000/- which according to him would be impermissible. In the view the Court may take as to the jurisdiction of the Additional Collector, we will make a reference to this aspect of the argument a little later. 16. In the guise of the challenge to the rules or their validity, question of jurisdiction is raised in these petitions. We have no hesitation in giving a finding that the challenge made to the Rules as ultra vires the provisions of the Act are futile and frivolous and are bound to be rejected and they are accordingly rejected. 17. The only question that remains for us to answer is the question of jurisdiction. Mr. Chander Kumar submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner applies only to the Salt Commissioner and not an Additional Collector and therefore the Additional Collector is not a Collector within the meaning as defined under Rule 2 and therefore the Addl. Collector, Central Excise, Bangalore, was not competent to pass an order of adjudication in terms of sub-section (2) of Sec. 11A(2) of the Act where only a Collector is mentioned. 18. We have carefully considered the submissions made in this behalf and we have tried to see whether such a construction is possible not merely on the Golden rule of construction to read the statute as it is but also to see whether it would lead to any absurdity if the construction suggested by Mr. Chander Kumar is accepted by us. First we must say that in some publications, the inclusion of Rule 2(ii)(A) in between Rule 2(ii)(A) and (B) is undoubtedly a printer's devil and no more. Even if the official text provided for the same, we would have construed it to be a mistake in printing and give Rule 2(iia) a ranking below 2(ii) as is normally done. Therefore, that may not help and assist the contentions of Mr. Chander Kumar. 19. Now in the scheme of the definition of Rule 2(ii), one sees a clear division b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 'A' 'B', it shall include "Additional Collector who shall, with reference to the excisable goods as well as with reference to the duties and functions of the Salt Commissioner, which are different to that of the Collector of excisable goods, it will be meaningful and will neither be repugnant to Rule 4 nor lead to absurdity. This will also give the proper emphasis to the expression at the beginning of the definition in Rule 2(ii) where Central Excise goods have been dichotomised from salt. So on this Golden rule of construction construing the rule as it is and to give a proper meaning and give effect to the provisions of the Act and the Rules made thereunder see harmony between Rule 2 and Rule 4, we have no choice but to hold that an Additional Collector is a Collector under the Rules. 21. Therefore, the Additional Collector if he is deemed to be a Collector by virtue of the definition in the Rules, then 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 the duties and functions required to be performed by the Additional Collector. 22. In the view we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate appearing on behalf of the petitioner is accepted that the Collector can exercise power independently under the Act and the rules, in that event, the Court have to read in words contrary to a scheme of the Act. The Court may read word which is considered to be necessarily implied by word which is already in the statute and as limited power to add to, alter or ignore statutory word in order to prevent a provision from being unintelligible, absurd or totally unreasonable, unworkable or totally irreconcilable to the rest of the statute. The meaning is clear and the intention of the statute is also clear. Any other meaning to the provisions of Section 33 could be contrary to the machinery provided under the Act. Accordingly, it is made abundantly clear that the post of Additional Collector comes within the definition of the word 'Collector' and the Additional Collector had to discharge the power and function of a Collector and accordingly, appeal would lie to the Appellate Tribunal under Section 35B of the said Act. It is immaterial whether against the order of adjudication, there would be one appeal or two appeals. If the adjudication is made by the Assistant Collector, the Act ..... 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