Important point
In terms of Section 11A of Central Excise Tariff Act, a Superintendent has power to issue show cause and Deputy Commissioner had jurisdiction to adjudicate the show cause matter.

Headnote:Central Excise Tariff Act, 1985—Section 2(b) and 37B Chapter Heading No. 3402—Appellants were manufacturer of Textile Printing Adhesives and claimed benefit of Exemption Notification—Show cause alleging that they were not entitled to benefit of Notification as they were using logo of “ATR” belonging to a Company in Switzerland—After hearing, Deputy Commissioner confirmed the demand and imposed penalty—Appeal was dismissed and order was confirmed by CEGAT—Appeal—Contention that Superintendent had no jurisdiction to issue show cause and Deputy Commissioner had no jurisdiction to adjudicate—Act permitted any Central Excise Officer to issue show cause—Question could the Board override provisions of the Act by issuing directions and if Board could not do so what was the effect of circulars?—Board had no power to issue instructions or orders contrary to provisions of the Act—Superintendent was competent to issue show cause and Deputy Commissioner had jurisdiction to adjudicate—Impugned order suffered no illegality.
Held : As noted above, the Legislature has purposely omitted the word “Collector” from the proviso to Section 11A and replaced it with the words “Central Excise Officer”. It is the Act which confers jurisdiction on the concerned Officer/s. The Act permits any Central Excise Officer to issue the show-cause notices even in cases where there are allegations of fraud, collusion, willful, misstatement and suppression of facts. The question therefore is: Can the Board override the provisions of the Act by issuing directions in the manner in which it is done and if the Board cannot do so then what is the effect of such Circulars? In order to consider the powers of the Board one needs to see certain provisions of the Act. Section 2(b) defines the “Central Excise Officer” and it is mentioned therein that any Officer of the Central Excise Department or any person who has been invested by the Board with any of the powers of the Central Excise Officer would be a Central Excise Officer. Thus, the Board has power to invest any Central Excise Officer or any other Officer with powers of Central Excise Officer. By virtue of Section 37B the Board can issue orders, instructions or directions to the Central Excise Officers and such Officers must follow such orders, instructions or directions of the Board. However, these directions can only be for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods. It is thus clear that the Board has no power to issue instructions or orders contrary to the provisions of the Act or in derogation of the provisions of the Act. The Board can only issue such direction as is necessary for the purpose of and in furtherance of the provisions of the Act. The instructions issued by the Board have to be within the four corners of the Act. If, therefore, the Act vests in the Central Excise Officers jurisdiction to issue show-cause-notices and to adjudicate, the Board has no power to cut down that jurisdiction. (Paras 10 and 11)
We, therefore, see no infirmity in the Judgment dated 25th June, 2003. We hold that the Superintendent had jurisdiction to issue show-cause-notice and the Deputy Commissioner had jurisdiction to adjudicate. (Para 12)

Judgment

S.N. Variava, J.—Civil Appeal No. 2350 is filed against the Judgment dated 19th July, 2001 passed by the Customs, Excise & Gold (Control) Appellate Tribunal (for short ‘CEGAT’) and Civil Appeal No. 406 of 2004 is filed against the Judgment dated 25th June, 2003 passed by CEGAT. Both these Appeals can be disposed off by this common Judgment as the parties are the same and the question involved is the same.

2. Briefly stated the facts are as follows:

The Appellants are engaged in manufacture of Textile Printing Adhesives falling under Chapter Heading No. 3402 of the Central Excise Tariff Act, 1985. The Appellants were claiming benefit of Notification No.1 of 1993 as amended and Notification No. 16 of 1997. Show-cause-notices were issued to them alleging that they were not entitled to the benefit of the Notifications as they were using the logo of “ATR” belonging to one M/s. ATR St. Moritz A.G., Switzerland. Duty and penalty was demanded from them for having suppressed the facts and non-payment of duty. The Appellants replied to the notices. However, the Deputy Commissioner confirmed the demand of Rs. 26,74,875.75 and imposed a penalty of Rs. 26,00,000/-.

The Appellants filed an Appeal before the Commissioner of Central Excise (Appeals). They inter alia contended that, as suppression has been alleged, the Superintendent who had issued the show-cause-notices was not competent to issue the show-cause-notices and the Deputy Commissioner was not competent to adjudicate. The Commissioner (Appeals) upheld the contention that the show-cause-notices were wrongly issued and had been wrongly adjudicated by the Deputy Commissioner in excess of powers vested in him by the Central Board of Central Excise (for short ‘Board’). The Commissioner (Appeals) remitted the matter back with the following directions:-

“I. If the matter does not really merit invocation of suppression of facts, wilful misstatement, etc., the superfluous words may be got deleted from the subject Show Cause Notices by issuing suitable corrigenda and the matter may be re-adjudicated by the competent adjudicating authority. The SSI Notification Nos. may also be duly amended and substituted by Notifications in force during the periods of demand.

II. If the charge of misstatement suppression of facts etc. is to be retained, fresh Show Cause Notices may be issued in supersession of the impugned Show Cause Notices in line with the instructions contained in the two circulars referred to above.

III. While re-adjudicating the matter, the appellants’ contention that vide their letter dated 1.4.99, they had sent a specimen of the label to be used by them and that this specimen shows that their own brand name was more prominently displayed than the foreign brand name and that the price should be treated as cum-duty price should be examined in the light of the various CEGAT decisions available on this subject.”

3. Aggrieved by the directions given, the Appellants filed an Appeal. CEGAT by its Order dated 19th July, 2001 held that the Commissioner (Appeals) should not have remitted the matter back with the above directions and directed the Commissioner (Appeals) to decide the matter on merits. CEGAT also held on merits that the Appellants were not entitled to the benefits of the above mentioned Notifications as they used the brand name of another Company on their products. Aggrieved by this Order the Appellants have filed Civil Appeal No. 2350 of 2002.

4. No stay was granted in this Appeal, therefore, the Commissioner (Appeals) adjudicated and confirmed the demand by an Order dated 17th July, 2002. The Appellants then filed an Appeal before CEGAT wherein the only contention taken was that the Superintendent had no jurisdiction to issue show-cause-notices and the Deputy Commissioner had no jurisdiction to adjudicate. CEGAT has dismissed the Appeal by the Order dated 25th June, 2003. The Appellants have filed Civil Appeal No. 406 of 2004 against this Order.

5. It must be mentioned t

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2005 Supreme(SC) 342

Important pointIn terms of Section 11A of Central Excise Tariff Act, a Superintendent has power to issue show cause and Deputy Commissioner had jurisdiction to adjudicate the show cause matter.

Important point
In terms of Section 11A of Central Excise Tariff Act, a Superintendent has power to issue show cause and Deputy Commissioner had jurisdiction to adjudicate the show cause matter.