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1997(7) Supreme 164
SUPREME COURT OF INDIA
(From Customs Excise & Gold (Central) Appellate Tribunal, Delhi)
S.P. Bharucha, V.N. Khare, JJ.
GTC Industries Ltd. -Appellant
versus
Collector of Central Excise, New Delhi -Respondent
Civil Appeal Nos. 10858-10860 of 1996
Decided on 22-7-1997
Counsel for the Parties:
For the Appellant, J. Vellapalli, Sr. Advocate, Mrs. Rohina Nath, Advocate for Khaitan & Co., Advocates.
For the Respondents, K.N. Bhat, Sr. Advocate, S.D. Sharma, C.B. Babu, V.K. Verma, Advocates.
Held : Section 35E(1) empowers the Board to call for and examine the record of any proceeding in which the Collector of Central Excise, as an adjudicating authority, has passed any decision or order under the Act for the purpose of satisfying itself as to the legality and propriety thereof. It can direct the Collector to apply to the Tribunal for determination of such points as arise out of the decision or order as are specified by the Board. Sub-section (3) of Section 35E requires that no order shall be made under sub-section (1) after the expiry of one one year from the date of the decision or order of the adjudicating authority. (Para 9)
The said adjudication order was made on 21st August, 1987. The Boards order was made on 29th May, 1992. Prima facie, the Boards order was well beyond the permitted time. (Para 10)
The High Court s order dated 20th June, 1984 required the Revenue not to communicate to the assessee the said assessment order. It imposed no restriction on the activities of the Revenue. That this is so is borne out by the terms of the subsequent order of the High Court dated 18th June, 1991 in which the Revenue was directed to supply copies of the said assessment order to the assessee s advocates. The examination of the said assessment order by the Board under Section 35E of the Act was in no way inhibited by any order of the High Court; nor was the passing of an order directed to the assessing authority consequent upon such examination. We, therefore, hold that the Boards order was passed after the period prescribed in that behalf by Section 35E of the Act. (Para 11)
(ii) Central Excise and Salt Act, 1944-Section 35E-Adjudication order made on 21.8.1987-Revenue s appeal filed on 13.12.1995-Held, appeal filed long after the permissible period of three months-High Court by its order dated 21.7.1994 permitted the assessee and Revenue to file appeals against the adjudication order within two months-Revenue did not take advantage thereof. (Paras 12, 13)
(iii) Central Excise and Salt Act, 1944-Section 35E-Three show cause notices issued-Each show cause notice must be limited to the case that is made out therein by the Revenue-It is not within the jurisdiction of Tribunal in holding that allegations contained in third show cause notice should be looked into for purpose of adjudication of first and second show cause notices-It is beyond its purely adjudicatory function. (Para 14)
JUDGMENT
S.P. Bharucha, J.-The assessee is in appeal against an order of the Customs, Excise and Gold (Control) Appellate Tribunal.
2. We set out the facts only insofar as they relate to the three issues which are canvassed at the Bar.
The assessee, a cigarette manufacturing company, was issued a show cause notice on 26th August, 1983 in respect of its Bombay factory. A demand for exercise duty in the sum of Rs. 28.93 crores was raised for the period 1978 to 1983. On 19th April, 1984 a second show cause notice was issued to the assessee. It was in respect of its Baroda factory. It related to period 1978 to 1983 and demanded Rs. 35.32 crores by way of excise duty. On 2nd September, 1985 a third show cause notice was issued to the assessee which related in its Bombay and Baroda factories. It sought to make the assessee and two of its job workers liable to excise duty in the sum of Rs. 13.37 crores for the period 1st July, 1978 to 30th June, 1980. The third show cause notice was issued by the Deputy Director of Anti Evasion, Central Excise, New Delhi.
3. In 1984 the assessee filed a writ petition before the High Court at Bombay challenging the first show cause notice. At subsequent stages the writ petition was amended so that the second and third show cause notices were also subjected to challenge. On 20th June, 1984 the High Court permitted the Revenue to proceed with the adjudication of the first show cause notice, but directed:
"The order signed by the concerned officer as provided herein above will not be communicated to the respondents nor will the concerned officer or any other officer of the Excise Department inform the respondents of the fact that the order has been passed and/or signed by the concerned officer."
On 18th June, 1991 the High Court noted that orders had been passed in the adjudication proceedings and directed that the sealed cover in which the orders had been placed by opened and the orders shows to learned counsel for the assessee and the Revenue; also that the Revenue should supply copies of the orders to the assessee s advocates. On 21st July, 1994 the High Court directed that the assessee and/or the Revenue "may file appeal to the Tribunal against the said orders within two months from today..." and "if the said appeal is filed by the petitioners or the respondents, as the case may be, the Tribunal to entertain the said appeal on merits without taking the objection of limitation."
4. On 29th May, 1992 the Central Board or Excise & Customs made an order under the provisions of Section 35E(1) of the Central Excise and Salt Act, 1944 directing the Commissioner (L & A) as Collector of Central Excise to apply to the Tribunal for determination of the questions therein stated, which arose out of the adjudicating order dated 21st August, 1987 passed by the Director (L & A) on the three show cause notices, heard and dealt with together. The order of the Central Board was endorsed, amongst others, to the Principle Collector of Central Excise, New Delhi.
5. On 16th September, 1944 the assessee filed appeals before the Tribunal against the said adjudication order insofar as it related to the first and second shoe cause notices, which was adverse to it.
6. On 14th December, 1995 an application for clarification/directions was made by the Commissioner (L & A), Customs and Central Excise, New Delhi to the Tribunal. The application stated that an appeal had been lodge by the applicant against the said adjudication order on that day, namely, 13th December, 1995, It stated that since a copy of the Boards order under Section 35E(1) had not been endorsed to the applicant, although there was a direction to file an appeal, he did not have knowledge of the direction until he was informed by the Deputy director (Investigations), Directorate General, Anti Evasion, New Delhi by his letter dated 7th December, 1996. The Application submitted that the date of communication of the Boards order should be taken to be the date on which the a
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