The Director of Anti-evasion (Central Excise) was properly invested with the powers of the Collector of Central Excise and the show cause notice issued by him was valid.

M.N. CHANDURKAR, C.J.

In the judgment appealed against, the learned single Judge has held as follows :

1.The Director of Anti-evasion (Central Excise), New Delhi, had been properly invested with the powers of the Collector of Central Excise.

2.In view of the inter-Collectorate ramification and the huge estimated evasion of excise duty, the notice to show cause issued to the appellant is not open to challenge on the ground of overlapping of jurisdiction.

3.Having regard to the fact that there are a large number of branches of the Indian Tobacco Co., throughout India, it will not only be desirable, but also proper that one officer exercises the powers of the Collector.

4.The contents of the show cause notice do not amount to prejudging the alleged evasion and before a notice to show cause was issued, the authority was required to beprima faciesatisfied that there are reasonable grounds for the issue of a show cause notice.

5.The question as to whether there has been a clandestine removal so as to attract the provisions of Rule 9(2) of the Central Excise Rules could be decided by the adjudicating authority.

6.The contentions which were advanced before the learned single Judge are reiterated at the stage of admission of these writ appeals. We are however not satisfied that there is any error in the view taken by the learned single Judge.

7.The show cause notice issued by the Director of Anti-evasion (Central Excise) refers to contravention of the provisions of Rule 9(1), Rule 52, Rule 52A and Rule 209 of the Central Excise Rules, by the Indian Tobacco Co. Ltd. as well as its seven outside contract Manufacturers. The present appellant is one such outside Contractor Manufacturer. The estimated evasion is more than Rs. 800 crores. In so far as the appellant is concerned the estimated evasion is to the tune of Rs. 43.07 crores. They have paid excise duty to the tune of Rs. 116.70 crores, on the footing that they received Rs. 304.61 lakhs as job charges. According to the Department, the appellant has conveniently suppressed the fact of receivingad hocpayments as compensation from Messrs. Indian Tobacco Co. Ltd. which have been accounted in the books of accounts of the appellant as trade discount. The show cause notice refers to several facts which cannot be gone into at this stage.

8.The contention of the appellant is that under Section 37 of the Central Excise and Salt Act (hereinafter referred to as the Act), power is given to the Central Government to make rules to provideinter alia'for the assessment and collection of duties of excise, the authorities by whom function under this Act are discharged, the issue of notice requiring payment, the manner in which the duties shall be payable and the recovery of duty not paid' [see Section 37(2)(ib)]. It is argued that in exercise of this power while defining the meaning of the term 'Collector' insofar as the Districts of Coimbatore, Periyar, Nilgiris, Salem and Dharampuri in the State of Tamil Nadu are concerned, 'Collector' is defined as meaning the Collector of Central Excise, Coimbatore. Therefore, insofar as the appellant is concerned, since the factory is situated in Hosur, District Dharampuri, the Collector of Central Excise, Coimbatore, alone is the proper authority to issue notice. No other person, according to the learned counsel for the appellant, can be authorised to exercise this power by virtue of an executive order of the Central Board of Excise. This contention overlooks the fact that Section 2(b) of the Act defines 'Central Excise Officer' as meaning 'any officer of the Central Excise Department or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards and Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer'. The definition of a 'Collector' apart from defining what a Collector is, also contains an inclusive clause. In view of this definition, undoubte