Order of Collector of Central Excise imposing penalty.

RAMAKRISHNA, J.

This writ appeal is filed under the Letters Patent against the decision of Ramachandra Iyer, J., (as he then was), in writ petition No. 590 of 1958. The prior facts which led to the present proceedings, are briefly the following :

The petitioner in the writ petition is a dealer in scented chewing tobacco, cigars and beedies, and he had a licence for maintaining warehouse for the storing of tobacco. Under the rules, for the grant of such licence, the petitioner had to keep proper accounts of the stock of tobacco in the warehouse. On a check by the Excise authorities, his stock was found short by a substantial quantity. This made the petitioner liable to certain penalties, under the Central Excise Rules, 1944 (Rule 223-A). The Collector of Central Excise called upon him to show cause, why a penalty should not be inflicted upon for the shortage. After receiving the petitioner's explanation, the Collector found that the explanation was not satisfactory and imposed on the petitioner a penalty in a sum exceeding a lakh of rupees, under Rule 223-A of the Central Excise Rule.

Section 35 of the Central Excises and Salt Act (Central Act I of 1944), gave the petitioner a right of appeal to the Central Board of Revenue, which he availed himself of, and thereafter, the Central Board of Revenue passed an order on his appeal to the following effect :

"Having regard to all the circumstances of the case, the Central Board of Revenue hereby directs without prejudice to the merits of the case (italics ours) that the order dated 13th March, 1956, passed by the Collector of Central Excise, Madras shall be vacated" *

This order was passed on 25-7-1958, and was communicated to the petitioner on 5-8-1958. But three days earlier, the Collector of Central Excise, Madras, issued a notice dated 2-8-1958, again under Rule 223-A of the Central Excise Rules, calling upon the petitioner to show cause why a penalty should not be imposed upon, in respect of the very shortage of the stored tobacco, which was the subject matter of the adjudication by the Central Board of Revenue leading to the order above mentioned. The petitioner felt aggrieved by this fresh proceeding commenced against him by the Collector of Central Excise, notwithstanding the order of the Central Board of Revenue passed in appeal. He, therefore applied to the High Court, under Art. 226 of the Constitution for the issue of a writ of Prohibition, prohibiting the Collector of Central Excise from making any further enquiry, in pursuance of the show cause notice dated 2-8-1958.2The learned Judge (Ramachandra Iyer, J.) was of the . opinion that, in the absence of any direction in the appeal order of the Central Board of Revenue, remanding the matter to the original tribunal for fresh enquiry, the Collector of Central Excise had no jurisdiction to undertake a de novo enquiry. The learned Judge, thereupon, granted the petitioner's prayer, and made the rule Nisi absolute. From this decision, the present appeal is filed by the Collector of Central Excise.

3.The main argument pressed before us, by the learned Advocate-General who appeared for the appellant, is that the words in the aforesaid appellate order of the Central Board of Revenue, which have been italicised by us, expressly reserve the merits of the case to be gone into by the original tribunal, and therefore this gave jurisdiction to Collector of Central Excise, to undertake a de novo enquiry.

4.After careful consideration of the arguments of the learned Advocate-General for the appellant and also of the respondent we are of the opinion that in the absence of any specific words in the order of the Central Board of Revenue, it is not possible to spell out from its terms a precise direction for a de novo enquiry, giving jurisdiction to the Collector, for that purpose. Learned Advocate-General drew our attention to a decision of a Bench of this Court, comprising of Rajamannar, Chief Justice and Venkatarama Aiyar, J., in Sat