Hon'ble Prakash Krishna,J.
(Delivered by Hon'ble Ashok Bhushan,J) We have heard Shri A.K. Jain assisted by Shri Rajeev Chaddha and Shri Rajesh Jain for the petitioner, Shri Vishwajeet Bhattacharya, Additional Solicitor General of India and Shri S.P. Kesarwani for the respondents.
This writ petition questions the jurisdiction of Additional Director General, Directorate General of Central Excise, Intelligence in issuing show cause notice dated 01/10/2009 to the petitioner initiating proceedings for determining the liability under Section 11A and other provisions of the Central Excise Act, 1944 (hereinafter called the "Act, 1944") and the Central Excise Rules, 2002 (hereinafter called the "2002,Rules"). The writ petition raises the issue pertaining to interpretation of Section 2(b) of the Act,1944 and Rule 3 of 2002, Rules.
The facts of the case which need to be briefly noted for deciding the issues of the writ petition are: The petitioner was engaged in the manufacture and clearance of Gutkha and Pan Masala bearing "SIR" brand name. During the year 2007-08, search and seizure were carried out at the premises of the petitioner as well as at places of transporters, distributors etc. by the officers of the Directorate General of Central Excise, New Delhi which was followed by recording of statements of various persons. A show-cause notice dated 01/10/2009, under Section 11-A of the Act, 1944 was issued by one Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence asking the petitioner to show cause to the Commissioner, Central Excise, Kanpur within 30 days as to why the duty, penalty and interest be not imposed.
Petitioner's case in the writ petition is that the Board i.e. i.e. Central Board of Excise and Customs by letter dated 03/12/2009, replying an application under the Right to Information Act, 2005 informed that Dr. Devender Singh was posted as Additional Director General, DGCEI, New Delhi vide Office Order dated 14/5/2009. The petitioner claims to have filed interim reply as well as further interim preliminary objections before the Commissioner of Central Excise, Kanpur. One of the objection taken by the petitioner before the Commissioner of Central Excise was that the appointment of Dr. Devender Singh has not yet been notified in the Official Gazettee, hence he had no authority and jurisdiction to issue show cause notice dated 01/10/2009 to the petitioner. The Commissioner also noted the objection of the petitioner in the proceedings dated 25/2/2011. Objections of the petitioner as noted in the proceedings were that the show cause notice issued to the petitioner has not been signed by the competent authority. No approval was sought by the Additional Director General, Directorate General of Central Excise Intelligence from the Adjudicating Authority for issuing the show cause notice. The petitioner has come up in the writ petition praying for quashing the show cause notice dated 01/10/2009, alleging it to be without jurisdiction. A writ of prohibition has been sought restraining the respondents from taking any coercive steps against the petitioner.
Learned counsel for the petitioner contends that Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence had no jurisdiction to issue the show cause notice dated 01/10/2009 under Section 11A of the Act, 1944. It is submitted that Dr. Devender Singh, is not a "Central Excise Officer" within the meaning of Section 2(b) of the Act, 1944. It is further submitted that no notification regarding appointment of Dr. Devender Singh, Central Excise Officer has been published in the Official Gazettee as required by the Rule 3(1) of the 2002, Rules. It is submitted that as per 2002 Rules, the appointment of Central Excise Officer by Central Board of Excise and Customs can be made only by a notification which is required to be published in the Official Gazettee as per Rule 2(f) of the 2002, Rules and no notification of appointment of Dr. Devender Singh as a Central Excise Officer having been published in the Official Gazettee he had no jurisdiction to issue the show cause notice and it is liable to quashed on this ground alone. It is further submitted that Dr. Devender Singh, Additional Director General, who had issued the show cause notice has asked the petitioner to show cause to the Commissioner Central Excise, Kanpur which clearly indicates that he had no jurisdiction to issue show cause notice he being not the adjudicatory authority. It is submitted that if the notice was to be issued by the authority other than the adjudicatory authority, prior approval of the adjudicatory authority was required to be taken before issuance of the show cause notice. It is further submitted that the notice was unsigned.
Learned counsel for the petitioner in support of his submission has placed reliance on the judgment of the Gauhati High Court in Central Excise Appeal No. 7/2009, The Union of India & Anr Vs. M/s Khusi Aromatics & Ors, dated 04/6/2010, wherein the Division Bench of the Gauhati High Court while considering Section 2(b) of the Act, 1944 and Rule 3 of the 2002 Rules, held that the notification appointing a person as a Central Excise Officer is required to be published in the Official Gazettee and when there was no publication of the appointment of Shri Amar Singh, Chief Commissioner, Central Excise, Ranchi Zone as Commissioner Central Excise, Shillong he had no authority to participate in the proceeding and such decision was vitiated as nonest. Learned counsel for the petitioner further submits that against the order of the Gauhati High Court, Union of India had filed a Special Leave to Appeal (Civil) Nos. 7681-7683/2011 in which although the leave was granted on 23/1/2012, but no stay has been granted. He submits that the judgment of the Gauhati High Court in the case of The Union of India & Anr Vs. M/s Khusi Aromatics & Ors (supra) is fully attracted in the facts of the present case and the appointment of Shri Devender Singh having not been notified as Central Excise Officer under Rule 3(1) of the 2002, Rules, he had no authority to issue the impugned show cause notice.
Shri Vishwajeet Bhattacharya, Additional Solicitor General of India appearing for the respondents refuting the submission of the learned counsel for the petitioner contended that the Additional Director General, Directorate General of Central Excise Intelligence was a Central Excise Officer and fully entitled to issue show cause notice under Section 11-A of the Act, 1944. It is submitted that the Board had already issued notification dated 26/6/2001, in exercise of power under Section 2(b) of the Act, 1944 read with sub-rule (1) of Rule 3 of the Central Excise Rules, 2001, appointing the officers specified in Column 2 as Central Excise Officer and investing them with all the powers, to be exercised by them throughout the territory of India, in which Additional Director General, Directorate General of Central Excise Intelligence was specified as Commissioner, Central Excise hence he was fully competent to issue the impugned show cause notice. It is further submitted that there was no necessity for publication of notification dated 26/6/2001 in the Gazettee. He submits that the 2002, Rules saves the things done under the 2001 Rules, hence investing them with all the powers by notification dated 26/6/2001 continues to operate and the submission that Devender Singh had no jurisdiction to issue the show cause notice is in correct. He submits that the Additional Director General, Directorate General of Central Excise Intelligence /Commissioner, Central Excise had every jurisdiction to issue the show cause notice and no prior approval of the adjudicatory authority was required. He further submits that there is no challenge to the notification dated 26/6/2001, in this writ petition, thus, the competence of Additional Director General, Directorate General of Central Excise Intelligence to issue notice as Commissioner of Central Excise cannot be challenged or entertained in this writ petition.
We have considered the submissions of the learned counsel for the parties and have perused the record.
Before we proceed to consider the submission of the learned counsel for the parties, it is necessary to refer to relevant provisions of the Act, 1944 and the rules framed thereunder and the relevant statutory changes brought from time to time.
The definition of Central Excise Officer is contained in Section 2(b) of the Act, 1944.
Section 2(b) of the Act, 1944 earlier to its substitution by the Finance Act, 1995 was to the following effect:
"2.Definitions.- In this Act, unless there is anything repugnant in the subject or context,-
(a) ............................
(b) "Central Excise Officer" means 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 of Revenue Act, 1963 with any of the powers of a Central Excise Officer under this Act;"
The above definition of the "Central Excise Officer" was amended and the definition as it exists today as well as at the relevant time is as follows:
"2.Definitions.- In this Act, unless there is anything repugnant in the subject or context,-
(a)...............................
(b) "Central Excise Officer" means the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Deputy Commissioner of Central Excise, Assistant Commissioner of Central Excise or any other 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 of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act;"
From the above definition of Section 2(b) of the Act, 1944 as was enacted, the "Central Excise Officer" was defined to mean following two categories of officers:
(i) Any officer of the Central Excise Department, or
(ii) Any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 with any of the powers of a Central Excise Officer under this Act.
The definition of "Central Excise Officer" as amended and as now exists under Section 2(b) of the Act, 1944 now consists of three categories which are as follows:
"(i) Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Deputy Commissioner of Central Excise, Assistant Commissioner of Central Excise, or
(ii) any other officer of the Central Excise Department, or
(iii) any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 with any of the powers of a Central Excise Officer under this Act."
Under the Central Excise and Salt Act, 1944, rules were framed namely; Central Excise Rules, 1944. Rule 4 of the 1944 Rules, deals with Appointment of Officers. Rule 5 of the 1944 Rules, deals with delegation of powers by the Commissioner. Rule 4 of the 1944 Rules was to the following effect:
"Rule 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."
Another set of Rules were framed namely; Central Excise Rules, 2001. Rule 3 sub-rule 1 of the Rules, 2001 were as follows:
"Rule 3 (1). Appointment and jurisdiction of Central Excise Officer:-The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer or to exercise all or any of the powers conferred by these rules, on such officer."
Rules, 2001 were superseded by 2002, Rules. 2002, Rules while superseding the 2001, Rules mentioned as follows:
"In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and in supersession of the Central Excise (No.2) Rules, 2001, except as respect things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:- Central Excise Rules, 2002."
Rule 2 (f) and Rule 3 of the 2002 Rules, which are relevant in the present case are quoted below:
"Rule 2. Definitions.- In these rules, unless the context otherwise requires, -
(a) .......................
(f) "notification" means the notification published in the Official Gazette;
Rule 3. Appointment and jurisdiction of Central Excise Officers.-(1) The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer to exercise all or any of the powers conferred by or under the Act and these rules.
(2) The Board may, by notification, specify the jurisdiction of a Chief Commissioner of Central Excise, Commissioner of Central Excise or Commissioner of Central Excise (Appeals) for the purposes of the Act and the rules made there under.
(3) Any Central Excise Officer may exercise the powers and discharge the duties conferred or imposed by or under the Act or these rules on any other Central Excise Officer who is subordinate to him."
Now we revert to Section 2(b) of the Act, 1944. The submission of the learned counsel for the petitioner as noted above is that unless an appointment of Central Excise Officer is notified and published in the Gazettee as required under Rule 3 of the 2002, Rules, no officer can exercise jurisdiction under the Act, 1944. He submits that since the appointment of Dr. Devender Singh, Additional Director General, Directorate General of Central Excise, Intelligence has never been published in the Gazette, he had no jurisdiction to issue the show cause notice dated 01/10/2009 under Section 11-A of the Act, 1944.
Section 2(b) of the Act, 1944 as was initially enacted and subsequently amended both have been noted above. In Section 2(b) of the Act, 1944 as was enacted, there were only two categories of persons who could be treated as Central Excise Officer namely: (i) any officer of the Central Excise Department, or (ii) any person (including an officer of the State Government) invested by the Board, the powers of Central Excise Officer. Both the aforesaid categories were joined by word "or". Similarly, in Section 2(b) of the Act, 1944 as it exists today, there are three categories which are joined by word "or". Although in the last category which was the second category, "investment" of powers by the Board is contemplated. The word "or" is a disjunctive word. It is well established principle of statutory interpretation that the word "or" is normally disjunctive and the word "and" is normally conjunctive. Both of them can be read as vice-versa, but that interpretation is adopted only where the intention of the legislature is manifest.
Justice G.P. Singh in the Principles of Statutory Interpretation (Thirteenth Edition) Chapter 7 page 485 has stated as follows:
"The word 'or' is normally disjunctive and 'and' is normally conjunctive but at time they are read as vice versa to give effect to the manifest intention of the Legislature as disclosed from the context. As stated by SCRUTTON,L.J.:"You do sometimes read 'or' as 'and' and in a statute. But you do not do it unless you are obliged because 'or' does not generally mean 'and' and 'and' does not generally mean 'or'. And as pointed out by LORD HALSBURY the reading of 'or' as 'and' is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done". Where provision is clear and unambiguous the work 'or' cannot be read as 'and' by applying the principle of reading down. But if the literal reading of the words produces an unintelligible or absurd result 'and' may be read for 'or' and 'or' for 'and' even though the result of so modifying the words is less favourable to the subject provided that the intention of the Legislature is otherwise quite clear. Conversely if reading of 'and' and 'or' produces grammatical distortion and makes no sense of the portion following 'and', 'or' cannot be read in place of 'and'. The alternatives joined by 'or' need not always be mutually exclusive."
The use of the word "or" in Section 2(b) of the Act, 1944 is clearly disjunctive and cannot be read as conjunctive. The (unamended) definition clause reads the Central Excise Officer, means any officer of the Central Excise Department. Similarly, in the amended definition clause Section 2(b) of the Act, 1944 Central Excise Officer, means Chief Commissioner of Central Excise...... The first category which is contemplated both in the amended and unamended definition of Central Excise Officer clearly indicates any officer of the Central Excise Department to mean a Central Excise Officer. Under (unamended definition) officers of the Central Excise Department as now exemplified in first part of the definition by amended Section are to be Central Excise Officer. The Section 2(b) of the Act, 1944 (unamended) clearly meant an Officer of the Central Excise Department to be the Central Excise Officer and no further action or any formality was required to be completed or contemplated. Investing of the power of the Central Excise Officer was contemplated when "any person" (including an officer of the State Government) was given the power of the Central Excise Officer. The object is loud and clear. When the power is to be vested in any person, who may be an officer of the State Government or an officer of any other Department, power is to be necessarily invested by the Board in such an officer because without investing the power he cannot function as Central Excise Officer under the Act, 1944.
Rule 4 of the Rules, 1944 as quoted above contemplated appointment of such persons as it thinks fit by the Board to exercise all or any of the powers conferred by these Rules. It is relevant to note that Rule 4 of the Rules, 1944 did not contemplate appointment by a notification in the Gazettee.
For the first time by 2002, Rules, Rule 2(f) and Rule 3 (1), appointment of such officer by notification to be published in the Official Gazette has been introduced. Thus, when a power is invested on an officer belonging to third category of the definition 2(b) of the Act, the appointment has to be notified in the Official Gazette. Notification in the Official Gazette for appointment of such persons as the Board thinks fit has a purpose so as to persons who are dealt with such officers may know about the authority of the persons who is exercising the power qua then under the Act.
From the Scheme of Section 2(b) of the Act, 1944 and the Rules framed thereunder as noted above, it is thus clear that the appointment under the Rules as Central Excise Officer was contemplated only in the last category of the persons in the definition clause i.e. "any person" (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963............."
The Scheme of Section 2(b) of the Act, 1944 never contemplates appointment of the Officers of the Central Excise Department under the Rules. The Rules have to be read to supplement the provisions of the Act and to carry the purpose and object of the Act.
In case, Rule 3 of the 2002, Rules is interpreted to mean that the Board even if the Officer is Chief Commissioner of Central Excise or the Commissioner of Central Excise is to be invested with the power by the Board to work as Central Excise Officer, the said is wholly redundant and useless exercise. The Chief Commissioner, Central Excise is the highest officer of the department and the Chief Commissioner, Central Excise or Commissioner, Central Excise undoubtedly can exercise all the powers of the Central Excise Officers under the Act. If the argument of the petitioner's counsel is accepted then even when the Commissioner, Central Excise issues notice under Section 11A of the Act, 1944 there has to be notification in the Official Gazettee of his appointment as Central Excise Officer this interpretation leads to absurdity since neither Section 2(b) of the Act,1944 nor Rule 3 of the 2002, Rules can be read to mean that even appointment of Commissioner of Central Excise is to be notified in the Official Gazettee before he exercises power under Section 11A of the Act, 1944. This reinforces our view that appointment by notification which is to be published in the Official Gazettee is contemplated only with regard to the persons who are not already officers of the Central Excise Department. Since investing of power by the Board is contemplated in only last category in the definition of Section 2 (b) of the Act, 1944 and all three categories are joined by the word "or" which is disjunctive.
What is the intent and purpose of providing for investing with any of the powers by the Board as provided for in Section 2(b) of the Act,1944 needs to be found out. The word "invest" has been defined in LEGAL THESAURUS by WILLIAM C.BURTON in following words. "INVEST (Vest), verb appoint, authorize, charge, charter, commission, confer power, deferre, delegate, depute, empower, enable, endow with authority, entrust, furnish with rank, give a mandate, give authority, give power, grant authority, grant power, inaugurate, induct, install, instate, institute, license, mandare, name, nominate, ordain, permit, privilege put in commission, sanction". The concept of investing power by the Board presupposes that the person on whom the power is being vested does not have power to act as such. As observed above, Chief Commissioner of Central Excise or Commissioner of Central Excise who are Head of the Department and one of the highest officers of the Central Excise respectively are already invested with the power to carry out duties and functions under the Act, 1944. This can be explained by taking a illustration: An officer of the Central Excise Department is appointed as a Commissioner of Central Excise, and a notification is published of his appointment as a Commissioner of Central Excise. Now as per the argument of the learned counsel for the petitioner, for exercising any power of "Central Excise Officer" under the Act, 1944, a notification under Rule 3(1) of the Rules, 2002 is mandatory and without any notification under Rule 3(1) of the Rules, 2002 published in the Official Gazette, investing the power of "Central Excise Officer" to the Commissioner of Central Excise., he is incapacitated to exercise any power entrusted to Central Excise Officer. The argument has to be rejected since by virtue of a person being a Commissioner of Central Excise, the power to function as a Central Excise Officer is already invested in him and no further investment is required or necessary. This makes it clear that the submission of the learned counsel for the petitioner that unless a notification under Rule 3(1) of the 2002, Rules investing power is issued, no person even though he is Commissioner of Central Excise can function as a Central Excise Officer is incorrect.
The Apex Court had occasion to consider the principles of statutory interpretation in context of the word "or" in Competition Commission of India Vs. Steel Authority of India Ltd & Anr, (2010) 10 SCC 744. In the said case the Apex Court was considering the provisions of Section 53-A(1) (a) of the Competition Act, 2002. In the aforesaid context following was laid down in paragraphs 42,43,44 and 45:
"42. The provisions of Section 53A(1)(a) use the expression "any direction issued or decision made or order passed by the Commission". There is no occasion for the Court to read and interpret the word "or" in any different form as that would completely defeat the intention of the legislature. The contention raised before us is that the word "or" is normally disjunctive and "and" is normally conjunctive, but at the same time they can be read vice versa. The respondent argued that the expression "any direction issued" should be read disjunctive and that gives a complete right to a party to prefer an appeal under Section 53A, against a direction for investigation, as that itself is an appealable right independent of any decision or order which may be made or passed by the Commission.
43. It is a settled principle of law that the words "or" and "and" may be read as vice versa but not normally.
"...You do sometimes read `or' as `and' in a statute... But you do not do it unless you are obliged because `or' does not generally mean `and' and `and' does not generally mean `or'." [Green v. Premier Glynrhonwy Slate Co. (1928) 1 KB 561 p. 568)].
44.As pointed out by Lord Halsbury, the reading of "or" as "and" is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done." (Mersey Docks and Harbour Board v. Henderson Bros. (1888) 13 AC 595 at pg 603). The Court adopted with approval Lord Halsbury's principle and in fact went further by cautioning against substitution of conjunctions in the case of Municipal Corporation of Delhi vs. Tek Chand Bhatia (1980) 1 SCC 158, where the Court held as under:(SCC p.163, para 11)
11. ......As Lord Halsbury L.C. observed in Mersey Docks & Harbour Board v. Henderson Bros (1888) 13 AC 595 (AC at p.603), the reading of "or" as "and" is not to be resorted to 'unless some other part of the same statute or the clear intention of it requires that to be done'. The substitution of conjunctions, however, has been sometimes made without sufficient reasons, and i"t has been doubted whether some of the cases of turning 'or' into 'and' and vice versa have not gone to the extreme limit of interpretation."
45.To us, the language of the Section is clear and the statute does not demand that we should substitute "or" or read this word interchangeably for achieving the object of the Act. On the contrary, the objective of the Act is more than clear that the legislature intended to provide a very limited right to appeal. The orders which can be appealed against have been specifically stipulated by unambiguously excluding the provisions which the legislature did not intend to make appealable under the provisions of the Act. It is always expected of the Court to apply plain rule of construction rather than trying to read the words into the statute which have been specifically omitted by the legislature."
Another recent judgment which is relevant to be noticed is Union of India & Ors Vs. Ind-Swift Laboratories Ltd, (2011) 4 SCC 635, where the Apex Court had occasion to interpret Rule 14 of the Cenvat Credit Rules, 2004 and held that the word "or" used in Rule 14 by which two phrases cannot be read as word "and". Following was laid down in paragraphs 15, 16 and 17.
15. In order to appreciate the findings recorded by the High Court by way of reading down the provision of Rule 14, we deem it appropriate to extract the said Rule at this stage which is as follows:
"14. Recovery of CENVAT credit wrongly taken or erroneously refunded: - Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Sections 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries."
A bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest along with the duty where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded and that in the case of the aforesaid nature the provision of Section 11-AB would apply for effecting such recovery.
16.We have very carefully read the impugned judgment and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of Section 11AB of the Act and Rules 3 & 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof.
17.A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "or" appearing in Rule 14, twice, could be read as "and" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "or" in between the expressions "taken" or "utilized wrongly" or "has been erroneously refunded" as the word "and". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest."
The proposition of law laid down by the Apex Court in the aforesaid case do support our view that in Section 2(b) of the Act, 1944, all the three clauses which are joined by the work "or" have to be read as a disjunctive clause and the requirement of investing power by the Board in the third category cannot be read in first two categories.
The Division Bench of the Delhi High Court in Duncan Agro Industries Ltd. Vs. Union of India, 1989 (39) E.L.T. 211 (Del), also supports the interpretation which we have put to Section 2(b) of the Act, 1944. It is useful to quote paragraphs 21, 22,23,24,25 and 26 of the said judgement which are as under:
"21. The recruitment to the Indian Customs, Central Excise Service Group A is made in accordance with the Rules framed in exercise of the powers conferred by proviso to Article 309 of the Constitution. The President has made the existing rules called the Indian Customs and Central Excise Service Group A Rules, 1987 but the method of recruitment is pari materia in the earlier Rules. Recruitment is made as a result of combined competitive examination consisting of preliminary examination and main examination conducted by the Union Public Service Commission for recruitment to the service. The recruitment to the service is also made by promotion in the manner provided in the said rules. On appointment of these officers, they became members of the Central Excise Department and by virtue of the definition contained in Section 2(d) read with Rule 4, they became Central Excise Officers.
22. Under the Allocation of Business Rules, 1961, the Directorate General of Inspection and Audit (Customs & Central Excise), New Delhi is under the Ministry of Finance, Department of Revenue. The Department of Revenue handles all matters relating to Central Board of Excise and Customs and Central Board of Direct Taxes. The Government of India in the Department of Revenue and Banking vide order dated September 22, 1976 set up a Directorate of Internal Audit for Customs and Central Excise Department and posts were sanctioned and Director of Inspection (Audit) to oversee the working of the internal audit organisation of the various customs houses and central excise collectorates was set up. It formed part of the Directorate of Inspection (Customs and Central Excise) including Directorate of Audit under the Department of Revenue as a separate department and not part of or a subordinate organisation of the Central Excise Department. There are four subordinate organisations detailed in the Allocation of Business Rules, 1961, namely, Income-tax Department, Customs Department, Central Excise Department and the Narcotics Department but they are separate and distinct from the Directorate general of Inspection and Audit (Customs & Central Excise). By the aforesaid notification dated January 21, 1987, Shri M. M. Bhatnagar assumed charge of the post of Director (Audit). Customs and Central Excise in the Directorate. The Director (Audit) is thus, in our view, not a Central Excise Officer.
23. The definition contained in Section 2(b) of the Act says in addition that Central Excise Officer means any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 (54 of 1963) with any of the powers of the Central Excise Officer under this Act. By the impugned notification dated May 29, 1986 in exercise of the powers conferred by clause (b) of Section 2 of the Act, and Rule 4 of the Rules, the Central Board of Excise and Customs thereby appointed a Director (Audit) in the Directorate General of Inspection and Audit (Customs & Central Excise), New Delhi, as Central Excise Officer and invested him with the powers of Collector of Central Excise, to be exercised by him throughout the territory of India. The power, however, was restricted for the purposes of investigation and adjudication of such cases, as may, from time to time, be assigned to him by the said Central Board of Excise and Customs. Under the second part of the definition contained in Section 2(b) any person including an officer of the State Government, could be invested by the Central Board of Excise and Customs with any of the powers of a Central Excise Officer under the Act and this has exactly what has been done by the impugned notification dated May 29, 1986. It is not necessary in this case to determine whether "any person" would include an existing officer of the Central Excise Department as, in fact, the Director (Audit) is not already an officer of the Central Excise Department. The Board has been conferred with the jurisdiction to invest a person with any of the powers of a Central Excise Officer under the Act. The Legislature has authorised the Board to confer on such person all or any one or more powers and that would necessarily include the power of a Collector exercisable under Section 11-A of the Act. There is no warrant to give a limited or a narrow meaning to the language employed by the legislature in the second part of Section 2(b) so as to restrict to the investing of powers under Sections 19, 21, 25 or 26 as is suggested and not Section 11-A. The investing of the powers means the totality of the powers, administrative, territorial and pecuniary. This interpretation would effectuate the power under Section 2(b).
24. Section 2(b) of the Act defines a Central Excise Officer to mean besides an officer of the Central Excise Officer, any person invested with any of the powers of a Central Excise Officer under the Act. Every provision of a statute has to be given full effect to. The Court cannot place a construction on a provision which would tend to make it redundant. On the contrary, the Court's duty is to give effect to all portions of a statute. One of the principles for construction is that a statute ought to be so construed that, if possible, no word shall be superfluous, void or insignificant. If we accept the construction of the counsel for the petitioners, that would have the effect of ignoring the second part of Section 2(b) of the Act. Such a construction is plainly not permissible.
25. This Court has to take into consideration the object for which and intention with which such a power was conferred. Similar powers have been in existence in various fiscal statutes starting from Sea Customs Act, 1878, Section 6. In "Ram Kirpal v. State of Bihar, the question arose because of the non-applicability of the Land Customs Act, 1924 in Santhal Parganas. Their Lordships indicated as to how because of the application of Section 6 of the Sea Customs Act, officers of the Land Customs Act were treated as Customs Officers having jurisdiction under Section 6 appointing Land Customs Officers to be officers of customs for their respective jurisdiction and to exercise the powers conferred and to perform the duties imposed on such officers by the Sea Customs Act. Section 6 of the Customs Act, 1962 now makes provision for entrustment of functions on any officer of the Central Government and the State Government. Section 5 of Foreign Exchange Regulation Act, 1947 as well as of 1973 similarly make provisions for entrustment of functions. Our attention has been invited to notifications issued from time to time, right from 1957 under Section 2(b) of the Act investing designated officers with all the powers of a Central Excise Officer. Particularly by notification dated August, 15, 1964, the Officer on Special Duty appointed as such by the President by the order of the Government of India in the Ministry of Finance, was invested with the powers of the Collector of Central Excise for the purpose of investigation and adjudication of such cases as may, from time to time, be assigned to him by the Board. It must be attributed to the legislature that it was aware of the provisions contained in Section 12-A of the Act (inserted with effect from December 27, 1985) permitting exercise of powers of a Central Excise Officer by a senior rank officer or the provisions contained in Section 37-A (inserted with effect from July 1, 1978) empowering delegation of powers on junior rank officers, yet it allowed the provisions in Section 2(b) to remain to cover the eventualities or the field left uncovered by Section 12-A and Section 37-A as a repository of power in the Central Board for investing in any person any of the powers of the Central Excise Officer under the Act. When the legislature has used words in a statute, a meaning has to be assigned to it.
26. Some arguments were addressed by Mr. Venugopal that the definition clause cannot be a substantive provision and it could not contemplate the conferment of power on any person. Reliance is placed on the scope of interpretation clause stated in "Inland Revenue Commissioners v. Joiner", 1975(3) All. E.R. 1050 thus :
".... If it states at greater length what an expression used in other provisions in the statute 'means', it is no more than a drafting device to promote economy of language. It is a direction to the reader : 'Wherever you see this shorter expression in the statute you must treat it as being shorthand for the longer one.'. Alternatively an interpretation clause may be used by the draftsman not to define the meaning of an expression appearing in the statute but to extend it beyond the ordinary meaning which it would otherwise bear. An indication that this may be its purpose is given if it purports to state what the expression 'includes' instead of what it 'means'; but the substitution of the one verb for the other is not conclusive of its being a direction to the reader : 'Wherever you see this shorter expression in the statute you may treat it as bearing either its ordinary meaning or this other meaning which it would not ordinarily bear.' Where the words used in the shorter expression are in themselves too imprecise to give a clear indication of what is included in it, an explanation of their meaning which is introduced by the verb 'includes' may be intended to do no more than state at greater length and with more precision what the shorter expression means."
Reference was also made to Bennion on Statutory Interpretation. It is true that the purpose of a definition clause is to provide a key to the proper interpretation of the enactment and to shorten the language of the enacting part of the statute to avoid repetition. Ordinarily the scheme of the definition clause is only to define but a definition clause can, in our view, lay down substantive provision as in the instant case. When a word is defined to mean such and such, the definition is prima facie restrictive and exhaustive. But the definition in Section 2(b) gives an extended meaning of Central Excise Officer and the word is to be interpreted by its extended meaning. When the word 'means' are used it affords an explanation of the meaning which must inevitably be attached to those expressions. In this case it is dependent on investing. A meaning has to be attributed to each word used by the legislature in Section 2(b) and the language employed by legislature shows that a person could be invested with any of the powers of the Central Excise Officer under the Act, and he would be a Central Excise Officer. The investing of the powers on any person is, therefore, clearly contemplated. Second part of Section 2(b) has to be treated as a substantive provision."
Justice Bhagwati Prasad Banerjee of the Calcutta High Court had also occasion to consider Rule 4 of the Rules, 1944. In I.T.C. Ltd. & Anr Vs. Union of India & Ors, AIR 1989 Calcutta 294, wherein by notification dated 27/3/1986, power of Collector was conferred on a person namely: Director Anti Evasion in relation to entire country. The argument that the notification was ultra-vires was repelled and it was held that the power could be rightly exercised. Following was laid down in paragraph 34 which is quoted below:
"34. In my view when Central Board had been conferred with the jurisdiction to appoint an officer to exercise the powers conferred under the Act and/or the rules thereunder, can that power be limited and narrowed down as sought to be argued by Mr. Nariman in the instant ease. It is firmly Established principle that "whatever may fairly be regarded as incidental to or consequent upon, those things which the legislature has authorised, and not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires. (See Attorney General v. Great Eastern Railway Co. (1880) 5 AC 473 at p. 478). Relying upon the principles laid down by the House of Lords in the aforesaid case in my view unless the Statute in question had expressly prohibited conferring such concurrent jurisdiction, the notification cannot be declared to be ultra vires, particularly in view of the fact that such a power, even assuming that it does not directly flow from Rule 4 of the said Rules should be held to be an incidental or consequent upon those things which the legislature have authorised upon the authorities particularly in view of the object of the Act. The jurisdiction of an officer appointed by the Central Board should not also be interfered with unless it could be shown that either it is prohibited under the law or is contrary to law. In the instant case certainly it cannot be said that the petitioner would be in a most disadvantage position if notice were issued by 5 different Collectors than by one Collector in respect of all the areas and on the basis of a single show cause notice in respect of the self-same matter, and in my view it would not cause any prejudice or injury to the petitioner and further such a power is, in my view, reasonable, and incidental to the exercise of the statutory powers expressly conferred upon the respondents. In my view the ultra vires doctrine could not be made applicable in the facts and circumstances of the case inasmuch as it is not intended to perpetrate any direct interference with the rights of individual without specific legal authority and is not intended to harass and cause prejudice to any party. Accordingly, I hold that the learned single Judge and the learned Judges of the Division Bench of the Madras High Court in the case mentioned above had rightly decided that the notification No. 215/86 dated 27th March, 1986 was legal and valid and as such I hold that the respondent No. 3 had jurisdiction to issue the impugned show cause notice. I am constrained to take this view apart from the decision of the Madras High Court and the observation by the House of Lords mentioned above but also because of the observation of Denning L.J. in Magor and St. Mellons RDC v. Newport Corporation reported in (1950) 2 All ER 1226 that "We do not sit here to pull the language of Parliament and of Ministers to pieces and make nonsense of it. That is an easy thing to do and it is a thing to which lawyers are too often prone. We sit here to find out the intention of Parliament and of Ministers and carry it out and we do this better by filling in the gaps and making sense of the enactment than by opening it up to destructive analysis."
Against the above judgement of the learned Single Judge of the Calcutta High Court an appeal was filed before the Division Bench of the same High Court and the Division Bench affirmed the view taken by the learned Single Judge. The judgment of the Division Bench is reported in I.T.C. Ltd. Vs. Union of India,1991 (53) E.L.T. 234 (Cal.) In the case before the Division Bench by notification dated 27/3/1986, Director, Directorate of Anti Evasion, was notified to be of rank of Collector. The argument was that the Director, Anti Evasion cannot function as a Collector under the Act, 1944. The said argument was repelled and following was laid down in paragraphs 62,63,64 and 65 which is quoted below:
"62. The first contention is that the show cause notice under Section 11-A of the Central Excises and Salt Act, 1944, has been issued by Sri Narendra Kumar Bajpai, the Director, Directorate of Anti-Evasion (Central Excise), Block No.8. It has been contended that the alleged evasion of excise duty has taken place all over India. Only a Collector of Central Excise has been given jurisdiction under the proviso to Section 11-A to issue a show cause notice where an assessee is guilty of fraud, collusion or any wilful misstatement or suppression of fact or contravention of any of the provisions of the Excise Act as a result of which excise duty has not been levied or paid or has been short levied or short paid. Sub-section (2) of Section 11-A makes it clear that the Collector of Central Excise is the only authority which can determine the amount of excise due in such a contingency. It has been argued that under the provisions of the Central Excise Rules, a Collector exercises its jurisdiction in certain areas. The jurisdictions of the Collectors have been specified in Rule 2. It has, therefore, been contended that one single person cannot be invested with the jurisdiction of a Collector all over India.
63. I am unable to uphold this contention. All that the impugned Notification dated 27-3-1986 has done is to invest certain Officers of the Directorate of Anti-Evasion (Central Excise) with all the power of the Officers of Central Excise. The power to be exercised is throughout the territory of India and is commensurate with the rank of the Officer concerned as stated in the Table given in the Notification:-
TABLE Serial No. Officers of the Directorate of Anti Evasion Rank of the Officers (Central Excise) of Central Excise.
64. It will, therefore, be seen that the Director of the Directorate of Anti-Evasion has been invested with all the powers of a Collector. A Central Excise Officer under Section 2(b) of the Central Excise Act means any Officer of the Central Excise Department or any person invested by the Central Board of Excise and Customs "with any of the powers of a Central Excise Officer under this Act."
65. Therefore, the powers of the Collector of Central Excise under the Central Excise Act may be exercised by a person like the Director of Anti Evasion when the Director has been authority to exercise such power by the Notification. The Central Excise Act does not lay down that a Collector cannot exercise jurisdiction throughout India. The word 'Collector' has not been defined in the Act. There is nothing in the Act which requires the Central Government or the Board to divide the country into several zones and appoint Officers of limited territorial jurisdiction to exercise power only within the specified zones."
Learned counsel for the petitioner during the course of his submission has placed before us the papers and the details of posting of Dr. Devender Singh and according to him for the first time he was made Commissioner, Central Excise and was posted in Jammu and Kashmir on 07/8/2006. According to the petitioner's case Dr. Devender Singh was posted as Additional Director, Directorate General of Central Excise Intelligence at the relevant time when he issued the show cause notice. In the counter affidavit which has been brought on record the notification issued by the Board dated 26/6/2001, under the Rules, 2001 has been annexed where the Additional Director General has been specified to be in the rank of Commissioner, Central Excise.
Dr. Devender Singh, who issued the impugned show cause notice dated 01/10/2009 was Commissioner of Central Excise and for Commissioner, Central Excise it is not necessary that he be invested with the power of Central Excise Officer and his appointment be published in the Official Gazettee. The Commissioner, Central Excise is fully entitled to exercise all powers of Commissioner under the Act, 1944. The notification dated 26/6/2001, may have been issued for the convenience of the officers, and investing of the powers may be required for the persons who are not working in the Central Excise Department. The notification dated 26/6/2001, contains several designations of the officers who were not working in the Department of Central Excise and for them the appointment was necessary by the Board for investing the power. Since the notification dated 26/6/2001 was issued by the Board under the 2001 Rules, all action done under the 2001, Rules, have been saved in the 2002, Rules as noticed above. The said notification still continues to hold the field and the argument of the learned counsel for the petitioner that after the 2002, Rules, publication of appointment of Additional Director General/ Commissioner in the Official Gazettee was necessary cannot be accepted. We, however observe that in view of Rule 3(1) read with Rule 2(f) of the 2002, Rules, whenever the Board appoints a persons (not belonging to the Department of Central Excise), his appointment is to be made by way of notification after due publication in the Official Gazettee. This is the plain meaning of Section 2(b) of the Act, read with Rule 2(f) of the 2002, Rules.
Learned counsel for the petitioner during the course of hearing has placed before us the Gazettee notification dated 22/5/2009, by which certain appointments were made in the Customs and Central Excise. The said Gazettee notification relates to appointment of officers of the Indian Revenue Services (Customs and Central Excise) to the Grade of Chief Commissioner of Customs and Central Excise which is to be necessarily gazetted looking to the rank and the post. The said notification has nothing to do with regard to the power of Central Excise Officer to be exercised by the Officers of the Central Excise Department.
The Apex Court in the case of Pahwa Chemicals (P) Ltd Vs. Commissioner of Central Excise, New Delhi, 2005 (2) SCC 720, had occasion to consider the provisions of the Act, 1944. In the said case, a notice was issued by the Superintendent of Central Excise under Section11-A determining the duty and penalty. Appeal was filed by the appellants before the Commissioner Central Excise (Appeal) contending that the Superintendent of Central Excise was not competent to issue the show cause notices, the Commissioner (Appeals) upheld the contention and however remitted the matter back for consideration. The matter was taken by the appellant before the Tribunal and the Tribunal directed the Commissioner (Appeals) to decide the matter on merits. The Commissioner (Appeals) confirmed the judgment against which the appeal filed before the Tribunal was rejected. The Apex Court in the said case considered the provisions of the Act, 1944 as well as the circular dated 27/2/1997 issued by the Board. The Apex Court referring to the definition of Section 2(b) held that the Superintendent was fully competent to issue the show cause notice and the Board's circular being the administrative direction could not have taken away the jurisdiction to issue the show cause notice or to the adjudicating authority. It is useful to quote paragraphs,5,6,10,11 and 12 of the said judgment.
"5.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 25-6-2003. The Appellants have filed Civil Appeal No. 406 of 2004 against this Order.
6.It must be mentioned that the only point agitated is that the Superintendent had no jurisdiction to issue the show-cause-notices and that the Deputy Commissioner had no jurisdiction to adjudicate. This is because in an earlier round it has already been held by CEGAT, by its order dated 17.10.2000 that the appellants are not entitled to the benefit of the notifications. Against that Order Civil Appeal No.4050 of 2001 is pending before this Court.
10.Section 2(b) of the Act defines a "Central Excise Officer" as follows:
2(b). "Central Excise Officer" means the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Deputy Commissioner of Central Excise, Assistant Commissioner of Central Excise or any other 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 of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act.
Thus, even an Additional Commissioner or an Assistant Collector or a Deputy Commissioner or any other Officer of the Central Excise or any person invested by the Board with the power of the Central Excise Officer would be a Central Excise Officer. Even though the Legislature made this change, the Board issued a Circular dated 27-2-1997 which reads as follows:
"I am directed to say that the Board has decided to review the powers of adjudication with the objective that cases are decided expeditiously, there is even distribution of workload and various doubts in this regard are clarified.
2. In this connection, the following facts and legal position has been taken into consideration:-
(i) By virtue of Clause (a) of Section 33 of Central Excise Act, 1944, Commissioners can adjudicate the cases of confiscation and penalty without limit. This power has been delegated to Deputy Commissioners by CBR Notification No.12-C.Ex., dated 17th May, 1947, to Assistant Commissioners of Central Excise by CBR Notification No.8-C.E., dated 2nd September, 1944 and to Superintendent of Central Excise by CBR Notification No.93/59, dated 28th November, 1959.
(ii) So far as the confirmation of duty is concerned, it is observed that Section 11A empowers any Central Excise Officer to issue the notice and determine the duty due.
(iii) Likewise, the "proper officer" i.e. Jurisdictional Central Excise Officer can issue notice and adjudicate the demands under Rule 9(2)/Rule 57-I/Rule 57U of Central Excise Rules, 1944.
(iv) In order to bring about uniformity and objectivity the Board issued instructions defining powers of adjudication of specified Central Excise Officers taking 'duty involved' as the criterion.
3. Those show cause notices where adjudication orders are not passed upto 28-2-1997, will be adjudicated as provided hereinafter :-
(A) All cases involving fraud, collusion, any willful mis-statement, suppression of facts, or contravention of Central Excise Act/Rules made thereunder with intent to evade payment of duty and/or where extended period has been invoked in show cause notices, (including MODVAT cases, Rule 9(2) cases of this type) will be adjudicated by :-
(Amt. of duty involved) Commissioners Without limit Addl. Commissioners Upto Rs. 10 lakhs (B) In respect of cases which do not fall under the category (A) above, will be adjudicated by :-
(Amt. of duty involved) Commissioners Without limit Addl. Commissioners/ above Rs. 2 lakhs and upto Dy. Commissioners Rs. 10 lakhs Assistant Commissioner Upto Rs. 2 lakhs Notwithstanding the powers of Assistant Commissioners to adjudicate the cases involving duty amount upto Rs. 2 lakhs only as above, all cases of determination of valuation and/or classification other than those covered under Category (A) above, will be adjudicated by the Assistant Commissioners without any limit as hitherto, as also MODVAT disputes, other than those at category (A) above.
(C) Cases related to issues mentioned under first proviso to Section 35B(1) of Central Excise Act, 1944 would be adjudicated by the Addl. Commissioners/Dy. Commissioners without any monetary limit, as was the position under Board's Circular No. 13/93-CX., dated 15-10-1993.
4. The value of goods/conveyance, plants, machinery and building etc., liable to confiscation will not alter above powers of adjudication which will solely depend upon the amount of duty/Modvat credit involved on the offending goods.
5.1 In respect of cases covered under Category (A) of para 3 above, the show cause notices will be issued by the same rank of officers who will adjudicate them. Wherever the posts of Commissioner-I and Commissioner- II (Judicial) are in existence, the show cause notices will be issued by Commissioner-I.
5.2 In respect of cases covered under Category (B) of para 3 above, show cause notices will be issued by the Range Superintendent where they are to be adjudicated by the Assistant Commissioner and such notices will be issued by Assistant Commissioner when they are adjudicated by Dy. Commissioner/Addl. Commissioner/Commissioner.
5.3 In respect of cases covered under category (C) of Para 3 above, show cause notices will be issued by Assistant Commissioner.
6. The definition of expression 'Commissioner' contained in Rule 2(ii) was amended by Notification No. 11/92-C.E. (N.T.), dated 14-5-1992. Accordingly, an Additional Commissioner of Central Excise is not a Commissioner for the purposes of appeal. Therefore, appeal against the Order-in-Original passed by an Addl. Commissioner of Central Excise shall lie to the Commissioner of Central Excise (Appeals) and not to the CEGAT.
7. All Previous Board's Circulars relating to issue of show cause notices and their adjudications except the Circular No. 13/93-C.X., are hereby rescinded.
8. An immediate exercise should be undertaken thereafter to take stock of the pendencies as on 1st March and transfer of the relevant files and records to respective adjudicating authorities by 15th March, 1997 under proper receipt. These recast figures should be reflected suitably in the Monthly Technical Report of March, 1997 to be submitted in April, 1997.
9. Receipt of this Circular may please be acknowledged.
10. The trade and field formations may be suitably informed."
By clauses 3(A) and 5.1 of this Circular, the Board is directing that in cases of fraud, collusion, willful misstatement or suppression of facts the notice must be issued and adjudication must take place by the Commissioner without limit and by the Deputy Commissioner up to a limit of Rs.10,00,000/-. Thereafter the Board by another Circular dated 13-8-1997 reiterated the above position.
11.The Appellants place strong reliance upon these two Circulars and submit that by virtue of these Circulars the Superintendent had no jurisdiction to issue the show-cause-notices and that the Deputy Commissioner had no jurisdiction to adjudicate.
12.As noted above, the Legislature has purposely omitted the word "Collector" from the proviso to Section 11-A and replaced it with the words "Central Excise Officer". It is the Act which confers jurisdiction on the officer(s) concerned. 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?."
Learned counsel for the petitioner has placed much reliance on the judgment of the Gauhati High Court in Union of India & Ors Vs. M/s Kushi Aromatics (supra). He submits that the Division Bench of the Gauhati High Court has held that the notification under Rule 3(2) of the Rules, 2002 is required to be published in the Gazette and since no notification was published in the Gazette, the exercise of jurisdiction by the Chief Commissioner, Central Excise, Ranchi was invalid. It is useful to note the facts of the said case in some detail. In the said case show cause notice dated 13/9/2006, was issued under Section 11A. The Commissioner, Central Excise, Dibrugarh dropped the charges levelled against the respondents M/s Khusi Aromatics and M/s. Kothari Products Ltd. The Revenue preferred the appeals before the Tribunal in terms of the review order passed on 15/2/2008 by a Committee. The Committee consists of Shri H.K. Saran, Chief Commissioner, Central Excise, Shillong Zone and Shri Amar Singh, Chief Commissioner, Central Excise, Ranchi. Before the Tribunal the assessee objected to the Constitution of the committee. It was contended that the members thereof were not authorised to act as such for want of appropriate notification conferring them the jurisdiction. Shri Amar Singh who was promoted as Chief Commissioner, Central Excise, Ranchi was assigned the additional charge of Chief Commissioner, Central Excise, Shillong. It was contended by the assessee that no notification as contemplated by Rule 3(2) of Rules, 2002 conferring the jurisdiction on the Committee was issued and published in the official gazette, the Committee was not authorised to review the order of the Commissioner. The Tribunal had dismissed the appeal of the Revenue against which the Central Excise Appeal No.7/2009 was filed. The Division Bench dismissed the appeal by upholding the order of the Tribunal. The Division Bench held that no notification under Rule 3(2) of the Rules, 2002 conferring the jurisdiction of the Chief Commissioner, Central Excise to be a member of the Committee having been issued the order of the Commissioner could not have been reviewed. Following was laid down by the Division Bench in paragraphs 15,18,21 and 22.
"15. Admittedly, there was no notification Under Rule 3(2) to confer on Shri Amar Singh, the then Chief Commissioner, Central Excise, Ranchi the jurisdiction to act as Chief Commissioner Shillong as a member of the aforementioned committee.
18.In view of the definition of "notification" provided in Rule 2(f) of the Rules, the same would clearly signify that the same has to be published in the official gazette. Such is the peremptory mandate of the above legal provision that any omission in that regard has to be assuredly viewed to vitiate the resultant act.
21. In view of the authoritative pronouncement as above and having regard to the scheme of the Act and the underlying purpose of the notification to acquaint all concerned about the composition of the Review Committee for the sake of transparency, fairness and predictability of its decisions we are of the unhesitant opinion that the word "may" used in Rule 3(2) of the Rules is of mandatory connotation leaving the Department with no discretion what so ever but to notify the jurisdiction of the Officers as and when sought to be conferred. This applies per force in the matter of constitution of the Review Committee as contemplated under section 35B(1B) of the Act.
22. The admitted fact is that on the date on which the Committee involved herein had rendered its decision i.e. 24/7/2008, there was no notification conferring jurisdiction on Shri Amar Singh to function as the Chief Commissioner of Central Excise, Shillong. Moreover as is affirmed by the learned Standing counsel in course of the arguments, there was no regular incumbent in the office of the Central Excise, Shillong Zone. The Office Order No.23/2008 dated 31/1/2008 whereby the Chief Commissioner of Central Excise, Ranchi, had been assigned the additional charge of the Chief Commissioner of Central Excise, Shillong, for the limited purpose of reviewing the orders passed by the Commissioners of Dibrugarh and Shillong until further orders not only on the face of it was a make shift arrangement, but also not at all in conformity with the peremptory prescription of Rule 3(2) of the Rules. As by the said order the Chief Commissioner of Central Excise, Ranchi, was being endowed with the jurisdiction to act as the Chief Commissioner of Central Excise, Shillong, the same could not have been effected without a notification ordained by Rule 3(2). This coupled with the admitted absence of regular incumbent in the office of the Chief Commissioner of Central Excise, Shillong, in our opinion, has rendered the proceedings before the Committee comprised of Shri Amar Singh and Shri Hrishikesh Sharan a nullity."
From the judgment of the Gauhati High Court as noted above, it is clear that there was no issue in the aforesaid case as to whether the Chief Commissioner, Ranchi was Central Excise Officer within the meaning of Section 2(b) of the Act, or not. The objection was raised regarding exercise of jurisdiction by the Chief Commissioner, Ranchi as a member of the Committee, which committee was to be constituted in accordance with Section 35-B (1B) of the Act.
In the present case, the issue which has been raised by the learned counsel for the petitioner is that Dr. Devender Singh, who was working as Additional Director General/Commissioner was not authorised to issue the show cause notice dated 01/10/2009, since he was not a Central Excise Officer because no notification having been issued and published in the Official Gazette as required under Rule 3(1) of the 2002, Rules. We have already considered the issue and held that Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence having been authorised to act as a Commissioner, Central Excise was a Central Excise Officer, within the meaning of Section 2(b) of the Act, 1944 and was fully authorised to issue the show cause notice. Thus, the above judgment of the Gauhati High Court is clearly distinguishable and does not help the petitioner in the present case.
The submission which has been next pressed by the learned counsel for the petitioner is that the authority who had issued the show cause notice ought to have obtained prior permission from the adjudicating authority before issuing the show cause notice. The impugned show cause notice dated 01/10/2009, directed the petitioner and others as mentioned therein to show cause before the Commissioner, Central Excise, Kanpur who was the adjudicating authority. The Additional Director General, Directorate General, Central Excise Intelligence having been specified as a Commissioner, Central Excise was fully entitled to issue the show cause notice under Section 11-A of the Act,1944 he being a Central Excise Officer. No such provision has been referred to nor shown which may require approval before issuing the show cause notice of the adjudicating authority/officer.
In the counter affidavit, the notification dated 26/6/2001 has been brought on the record as Annexure-CA-1, which mentions that the Additional Director General was mentioned in the rank of Commissioner was to exercise the jurisdiction throughout the territory of India of an Officer of the Central Excise.
Present is not a case, where there is any lack of jurisdiction in the Commissioner in issuing the show cause notice. The submission of the learned counsel for the petitioner that prior permission of the adjudicating authority is required before issuing the show cause notice dated 01/10/2009 is without any substance.
The Apex Court in the case of Pahwa Chemicals Pvt Ltd. (supra) had rejected the similar contention raised by the assessee as noted above.
In view of the foregoing discussion, we are of the considered opinion that the Additional Director General/Commissioner, Central Excise had every jurisdiction to issue the show cause notice dated 01/10/2009 and no ground has been made out to quash the same.
The writ petition is dismissed.
Order Date :- 21.5.2012 SB