1. This is an appeal filed by the Collector on the directions of the Board [vide F. No. 199/262/92-Jud. Cell (BMB) Order No. 47/R-93 dated 15-3-1993] against the Order in original No. 30/92 dated 8-4-1992 passed by the Collector of Central Excise, Bombay II.2. Though this appeal canvasses certain points, which call for determination of value and classification and hence normally would call for consideration by the Special Bench, Shri Mondal, the Id. S.D.R.pleads that as per instructions, he only pleads for a remand of the case on certain specific short grounds, which would establish that the Collector has not been fair to the Department and has passed the impugned order, without considering the evidences placed before him and bringing in certain suspect documents, without giving any opportunity to the investigation (department) to enquire into these documents before they are taken on record and they were acted upon for drawing conclusions adverse to the department. He assured that he would not go into the merits of the case touching on classification or valuation, but would confine himself only to the grounds for urging a remand.
3.1 Alongwith the appeal, a stay application was also moved by the Collector. This was listed for hearing on 8-6-1993, which was adjourned at the request of the Consultant representing the respondents (vide his application dated 4-6-1993). It was fixed for hearing on 19-7-1993.
3.2 On that day, none was present on behalf of the respondents, though we were told by the Bench Clerk that a message was received that someone would attend hearing. We waited till the end of the board and finally took up this matter. At that time, the Id. S.D.R. made the above request with a plea for consideration of these grounds and an ad interim direction was given to both the sides for not disturbing the status quo, till the appeal was heard on the short grounds, (vide our Order No. 307/93-WRB, dated 19-7-1993).
3.3 In pursuance of this direction, the appeal was listed for hearing.
Shri Sunder Rajan raised a preliminary objection for hearing this appeal by this Bench, since the appeal involves consideration of valuation and classification. However, on the assurance being repeated by Shri Mondal that his short grounds would be only limited to the aspect of denial of opportunity for the department to rebut the evidences brought in behind the back of the investigating agency and the order, being improper, in not considering fully the evidences brought in by the Department but based on certain letters written by the respondents at the last minute, after the personal hearings were over, without making them available for investigation for comment; and they were taken on record for acceptance straightaway, we allowed Shri Mondal to proceed with the arguments on short grounds. We also deal with this objection of the consultant elsewhere in this order.
4.1 Shri Mondal briefly indicated the facts of the case, for the limited purpose of pleading his short grounds as below :- 4.2 On the basis of information received by the officers of the Directorate of Anti-evasion, the officers of Central Excise alongwith the Directorate officials carried out searches in the factory premises of the respondents, their agents, dealers and consumers at various places in the country. They recovered documents relating to clearances of goods from the factory, recorded statement of a number of persons connected with production/clearance.of goods, receiver of goods, Agents and dealers etc. A Show Cause Notice was issued on completion of investigations alleging that the respondents, - (i) had intentionally not been recording the correct production figures of L.D.P.E. in RG 1 in grade A and had cleared such grade A as grade B, thereby had evaded duty payable on the value applicable to grade A. (ii) have realised the cum duty value from the consumers as for the value of grade A, but paid duty thereon as grade B for excise purposes, thereby realising more money than that on which duty was paid.
(iii) have been wilfully misdeclaring L.D.P.E. as master batch for paying duty at 10% adv. instead of at the correct rate of 30%. The quantities cleared as master batch in the excise documents were only L.D.P.E. granules. Hence by this misdeclaration, huge evasion of duty was alleged.
(iv) have been removing goods at higher price from dates earlier than the effective dates declared in their price lists.
(v) have claimed certain deductions wrongly, where goods were sold ex-factory at the prices.
On the basis of the S.C.N. detailing the evidences for each of the allegation, which included not merely the statements but also sales invoices vis-a-vis corresponding gate passes to show grade 'A' L.D.P.E.being invoiced against corresponding excise G.P. showing it as grade B, evidences to establish clearance of L.D.P.E. as master batches, adjudication proceedings were held by the Collector. A number of personal hearings were given, the officers of Directorate of Anti-evasion were also present for representing the interests of the department. He referred to personal hearing proceedings to confirm this position. The personal hearing proceedings were over on 12-3-1992. In so far as hearings are concerned curtain was finally drawn on 12-3-1992. Thereafter a letter dated 27-3-1992 written by the Chairman and Managing Director was taken on record by the Collector, without getting the comments on the factual position from the department. This letter has been received on 6-4-1992 and the impugned order was passed on 8-4-1992, adopting substantially the portions contained in the letter for giving these, as his conclusions. The contents of this letter were never disclosed to the department, which was represented by officers of Anti-evasion Wing. Even the personal hearing on 12-3-1992 was without any intimation to the officers of anti-evasion. Personal hearing proceedings recorded are available in file only upto 28-2-1992.
It appears thereafter that on 12-3-1992 the Director seems to have met the Collector and given a letter on that date. The final submissions have also been made in the Consultant's letter dated 23-3-1992. After the final submission, the Chairman has written a letter dated 27-3-1992, which has been received on 6-4-1992 and adopted for giving his findings. Moreover, certain invoices for the alleged purchase of Titanium Dioxide (an evidence produced by the respondents to show purchase of the colouring pigment for master batch) to rebut the allegation of clearance of L.D.P.E. as master batch, have been taken on record without even a covering letter. They were also not produced during the several hearings. They were not produced for nearly two years during the investigation nor in their reply to the S.C.N. There are certain glaring discrepancies noticed in those invoices. Even the originals do not appear to have been verified. Photo copies have been taken on record and conclusions have been drawn favouring the respondents, without any investigation into these documents, which prima facie are suspect and call for investigation. Hence this is a case of introduction of certain evidences behind the back of the department, which the Collector, for reasons best known to him, have accepted without giving any opportunity for the investigation to rebut them. He would urge for a remand on this ground itself, leave alone other grounds as detailed below.
4.3 On the allegation of removal of LDPE grade A, as grade B, the investigation has brought out ample evidences in the form of sale invoices vis-a-vis corresponding gate passes to show what was charged for in the price was for A grade, whereas it was cleared as grade B in the corresponding gate passes for purpose of lowering the incidence of duty, thereby realising the price for grade 'A' but paying duty on value for grade 'B'. These evidences have not been taken into account at all; but the Collector chose to accept the respondent's contention that no testing was done by the department at the production stage before accounting and there are no scientific system of grading. Even the finding is contrary to the factual position that tike respondent have been selling them in two different grades at different prices and the allegation based on the above evidences is that grade A granules were cleared as grade B but actually invoiced as grade 'A' to the customers. Hence the question of testing is not the material factor to reject these evidences.
4.4 The respondents themselves have admitted in their letter to the Chairman CBEC about short levy to the extent of Rs. 1.75 crores and deposited this. Even the Collector has taken note of this. Hence there is no warrant to send back the issue of finalising provisional assessment to the Assistant Collector and refrain from imposing any penalty for the admitted evasion.
(i) the Collector has allowed introduction of certain invoices (which are prima facie of suspect nature) without any investigation and allowed himself to be influenced in his findings by photo copies of these documents, without giving any opportunity to the appellant (Revenue) for rebutting these evidences introduced at a belated stage, after conclusion of all the hearings and even after final submission.
(ii) There are 162 documents listed in the S.C.N. Out of this, the Collector has considered only 3 and has not given any findings on the rest of the documents indicating that his consideration is biased against revenue. He cannot keep quiet on these documents, which are cited as vital for sustaining the allegation of evasion.
By ignoring these documents, his bias against revenue is discernible.
(iii) He has not given any findings on the admissibility or otherwise of the statements of 34 persons, though these statements remain without any retraction. In preference to these, he has chosen to rely on certain affidavits, without calling the deponent of these affidavits for examination either by him or by the investigation.
Thus he pleads that there is a total miscarriage of justice and that the fair play is not evident in the adjudication done by the Collector.
Hence he would plead for remand on these grounds.
5. Shri Sunder Rajan, the Id. Consultant made the following submission to rebut these contentions - (i) There is no requirement in the statute that natural justice can be pleaded by the Department. The Collector is the adjudicator. He is the executive head of the department and hence the Department's interests are to be looked after by him. If he has no objection to the documents received by him, there cannot be grievance against that.
(ii) There is no legal requirement that every letter received by the adjudicator is to be given to inYestigator for comment, before acceptance. He is to act as an adjudicator, having regard to principles of natural justice being extended to assessees who are proceeded against.
(iii) Certain documents have been deliberately kept away from the paper book filed by the department, which have now been brought forth by him by moving an application to the Tribunal. One letter dated 10-8-1991 written by the Consultant to the Collector does not form part of the record of adjudication and this does not lead to the present adjudication order and hence cannot form part of the paper book filed by the department.
(iv) The grounds now pleaded by the S.D.R. are not within the purview of Section 35E. Whatever questions framed by the board in their order dated 15-3-1993 are required to be answered by the Tribunal and hence this Bench is lacking in jurisdiction to deal with these questions and hence could not have heard the appeal on the short grounds now pleaded by S.D.R. He is only a mouthpiece. The statutory authority for filing the appeal is the Collector and the direction of the Board is in exercise of the powers conferred under Section 35E. Hence, the present hearing of the appeal on the short grounds is going beyond the order passed by the Board under Section 35E. (v) The Tribunal seems to have passed the interim order No. 307/93 dated 19-7-1993 in a hurry and it is a drastic order, passed against the respondents without hearing them.
(vi) Provisions of Section 35(4) only indicate that such application filed by the department is to be treated as an appeal against the decision. That does not make the department an appellant in a regular appeal. Hence pleadings on violation of natural justice cannot be entertained. In any case points raised in the Board's order only can be entertained and the Bench cannot go beyond these, since the Bench (Regional Bench) has only a limited sphere of delegated power for dealing with Special Bench matter, disposal of the appeal finally under Section 35C does not lie within the jurisdiction of the Bench.
(via) Referring to Section 33 of the Central Excises Act, he pleaded that there is no provision in the section for giving an opportunity to the department. Hence violation of natural justice cannot be pleaded by the department. He cites the decision of Collector of Customs v. Nippon Bearing (Para 25) - 1991 (55) E.L.T. 68 (Trib.) to plead that the Tribunal have rejected such a plea in the context of Sections 122 and 124 of the Customs Act.
(vii) Referring to the additional evidences brought forth by him (which as per submissions are forming part of the records but suppressed by the department in the paper book), he points out that it was Shri Sekon, the Director (Anti-evasion), who referred to the letter of the Director of the Company dated,16-8-1990 addressed to the Chairman C.B.E.C. and introduced it for opposing the request for cross examination of certain witnesses. He also pointed out that the letter of the Chairman of the respondents dated 27-3-1992 was only reiterating these points. Since the Director's letter dated 16-8-1990 was already in the hands of the Anti-evasion Director, the Collector's action in not sending it to the Anti-evasion Wing cannot be pleaded as deliberate nor is it an attempt to keep away this letter from the scrutiny of Anti-evasion Wing. Referring to the Collector's letter dated 16-5-1991, seeking for selective cross examination, he contends that when the Anti-evasion objected to cross examination on the ground that the respondents have accepted their liability to the extent of Rs. 1.75 crores in the letter to Chairman, C.B.E.C. and hence if the Collector has not cross examined those witnesses, he cannot use these evidences. Moreover, in departmental proceedings, it is not necessary that every witnesses are to be examined and cross-examined like court cases. Hence no adverse inference can be drawn for not considering cross examination or for accepting the affidavits which only explain their stand. In any case, the respondents have a grievance that the Collector could not force them to selective cross examination of witnesses, which cannot be ignored. The Collector is not estopped from considering these evidences in his manner and it is his way of appreciating evidences.
(viii) The Collector's order is in fact adverse to the respondents.
He has asked the Assistant Collector to finalise the provisional assessments and determine the short levy and their penal liability is also kept open. Their deposit of Rs. 1.75 crores is locked up in the process, though other major allegations have been dropped by the Collector. He therefore does not understand how the department's interests have been affected by the order. This appeal is motivated at the behest of Anti-evasion Wing, who are interested in their rewards.
(ix) In fine, he pleads that the present prayer for remand does not emanate from the order of the Board passed under Section 35E and is not within the jurisdiction of the Bench to decide on this question raised. Hence he pleads that on the short grounds, appeal may not be decided and let the questions referred to by the Board be decided by the Special Bench in due course.
6. Shri Mondal, in reply, countered these arguments and pleaded that the points canvassed are well within the jurisdiction of the Regional Bench, viewed in the context of the President delegating certain functions to the Regional Benches in the cases relating to Special Benches. He referred to the Public Notice issued by the President delegating certain functions including disposal of appeals of Special Bench. He also referred to Section 129C of the Customs Act made applicable to the provisions of the Central Excises Act relating to procedure to be followed in the Tribunal to contend that the Public Notice issued by the President is well within the legal framework. He also referred to Sections 35C and 35E and also the order of the Board and the grounds urged in the appeal filed by the Collector to urge that the appeal can be finally disposed of on the short ground by allowing the Department's prayer for remand, so that all the aspects including the grievance of selective cross examination of witnesses raised by the Consultant could be considered by the Collector for issue of a proper and legal order in accordance with law. He also referred to the decision of the Bench in the case of Lakhanpal - 1992 (62) E.L.T. 46 (Tri.) to urge the contention that the department has a right to be represented even during adjudication proceedings and hence non-disclosure of certain documents to the officers representing the department in the adjudication proceedings has caused a serious prejudice to the department's interest, calling for a remand with appropriate direction from the Bench.
7. After hearing both the sides, we find that first we should consider the preliminary objection and the legal objections for the Id.
Consultant pleading that this Bench being Regional Bench cannot go into this appeal for final disposal on the short ground pleaded and since the proceedings are based on the order of the Board issued under Section 35E, the Tribunal cannot escape answering these points and the main points urged being within the purview of the Special Bench, cannot be considered by the Bench. A point of grievance against this Bench's interim direction dated 19-7-1993 is also required to be answered by us.
7.2 First taking up our interim direction dated 19-7-1993 we feel it necessary to reproduce the relevant portions of the same - "After hearing Shri Mondal, in fairness to the respondents we would not express any opinion in their absence. Shri Mondal only pleads that the appeal itself may be listed for disposal on certain short grounds, which he would plead, on the basis of which the matter could be remanded back to the Collector. He also pleaded that ad interim direction may be given to maintain the status quo, till the matter is heard from both sides.
We agreed to this request and direct the registry to list the appeal for hearing on 18-8-1993. We also note that Shri Mondal has pleaded that the short grounds do not touch on the question of valuation, classification for determination.
Till the hearing of the appeal on the short ground, the status quo should not be disturbed by either side." 7.3 From the above, it is clear that though Shri Mondal pleaded on certain short grounds, we did not like to express any opinion on them in the absence of the respondents. But taking into account his prayer for hearing the appeal on certain short grounds, we directed the Registry to list the appeal for hearing on certain short grounds, and issue notice to both the sides, so that a final view on the short grounds could be had only after hearing the respondents. How the Id.
Consultant terms this as a drastic order causing prejudice to the respondents? Even the status quo maintenance by either side cannot be said to cause any prejudice to the respondents, because they have not moved any petition or cross appeal opposing the appeal of the revenue and stay petition, which we failed to consider. There was a reference to the respondents' claim for refund of deposit of Rs. 1.75 crores and return of the documents seized. The deposit of Rs. 1.75 crores was made voluntarily by the respondents pursuant to their letter addressed to the Chairman C.B.E.C. stating that the above amount, according to their calculation may be the short levy and pleaded for dropping all the procedures and long drawn legal proceedings, accepting this payment.
Hence this deposit appears prima facie to have been made on their own, presumably with an understanding for settlement without issue of S.C.N.Hence, when the Collector has given a direction that provisional assessment is to be finalised by the Assistant Collector and extent of short levy determined, they cannot expect to get the money back, whatever be the interim direction by us on the status quo maintenance.
Likewise, when the department have come up in appeal against the Collector's order dropping the major allegations and the main grievance of the revenue is that certain documents were introduced at the behest of the respondents in the last minute and many evidences cited in the S.C.N. were ignored, pending consideration of appeal either on short grounds or fully of merits. Directions are required to be issued for not disturbing the status quo by either side. The Id. Consultant cannot expect that this Bench can remain a mute spectator and allow the return of the documents, when the proceedings are half way through the Tribunal. Hence we dismiss this allegation against our interim order, as totally misconceived.
7.4 Now we take up the preliminary objection and the other legal objections of the Consultant. Preliminary objection and the legal objection challenge the jurisdiction of this Bench for disposing of the appeal on the short grounds pleaded by SDR. We have carefully considered these objections.
We agree that where any appeal among other things involves consideration of valuation and classification for purposes of determining the duty amount, such appeals are to be considered by Special Benches constituted by the President and the appeal from the Revenue inter alia raises issues touching the question of valuation and classification of the goods removed. But the Id. Consultant is not correct in contending that Regional Bench cannot go anywhere near such appeals. The President, for the sake of convenience of disposal, have constituted the Regional Benches, as Special Benches in regard to certain cases. They are enumerated in the Public Notice No. 4/86 dated 14-10-1986 in three categories 'A', 'B' & 'C. All these relate to matters concerning Special Benches but could be disposed of by this Regional Bench. Shri Mondal pleads that this Bench has jurisdiction to dispose of the appeal, in terms of S. No. 6 under category A! of the above Public Notice, which is reproduced below: "cases where the matters, in the opinion of the Bench, are to be remanded to the lower authorities on the ground of denial of natural justice, non-issue of S.C.N., denial of opportunity of personal hearing or relying upon evidence not disclosed to the appellants" Since the request from Shri Mondal is only limited for remand of the case on the main ground of non-disclosure of certain documents obtained from the respondents otherwise through normal official channel and taken into record for reliance, without disclosing it to the department, the case calls for a remand. Pritna facie, such a request falls within the purview of this Bench, as per the delegation of powers contained in the above Public Notice. Hence, we overruled the preliminary objection of the Id. Consultant.
7.5 But then, the Id. Consultant contends that application filed by the department can be construed only for purposes of disposal, as an appeal but the department cannot be considered an appellant for purposes of the above Public Notice. We could not appreciate this logic. Under the scheme of appeal envisaged in the excise law, the Tribunal comes into the picture only where an appeal has been brought by either of the affected parties in the adjudication proceedings held by the lower authorities. If the department's interests are affected either by an order of Collector (Appeals) or by the order of the adjudicating Collector, they can file appeal. In the case of orders against revenue passed by the Collector (A), the Collector directs filing of appeal before the Tribunal in exercise of powers conferred on him under Section 35B(2) of the Act, whereas in the case of orders passed by the adjudicating Collector, the Board directs the Collector to apply to the Tribunal for determination of such points, arising out of the decision or order, as may be specified by the Board in their order. In both the cases, they are to be treated as appeals from the Collector and the appellant is the Collector. We cannot treat the Collector as anyone other than as an appellant. Hence if an appellant feels aggrieved that certain documents have been introduced at the last minute without proper investigation, behind the back of the department's scrutiny, there is no escape from holding that this plea falls within the purview of S. No. 6 of the Public Notice.
7.6 Next objection is that the short grounds are beyond the purview of the order passed by the Board for determining the specified points in that order. The Tribunal is bound to consider these and cannot overlook them. Since they touch upon classification and valuation aspect, the short grounds cannot be considered. First we looked into various points specified in that order of the Board passed under Section 35E. (i) Points raised under paras 6A, 6B and 6C and sub-paras thereto relate to non-recording of correct production of LDPE grade 'A' vis-a-vis bagging reports and other plant records for that grade and clearance of those grade A granules as grade 'B' by showing in the Gate Pass; but charging the prices as applicable to grade A, as is reflected in the corresponding invoices, which has not been considered by the Collector either for a acceptance or for rejection. This point goes into the merits of this case and cannot be a short ground and in fairness to Mondal, he did not ask us for determining the point, though prima facie the Collector's findings do not reveal any discussion on these plant records and invoices.
(ii) Para 6D and sub-paras thereto relate to clearance of LDPE granules carrying higher rate of duty by declaring it as master batch carrying lower rate of duty. In this para, specific points are made alleging that the Collector had accepted invoices for the purchase of 117.750 M.T. of Titanium Dioxide for the period April 1990 to July 1990. Photocopies of the invoices taken on record in the adjudication file account only for a quantity of 36.750 M.T. of Titanium dioxide. It is also not clear as to when these were produced and under what covering letter they were taken on record.
There are no endorsements of verification of original invoices found in the photocopies. The original purchase order No. 20090 dated 6-4-1990 is for purchase of Acetone-IOMT. The documents taken on record appear to be fabricated and unverified documents and they have been admitted and relied upon by the Collector. It appears to have been introduced without letting any investigation being done on these documents. This is also the main point urged by Mondal as a short ground seeking for remand.
7.7 It is a matter of common knowledge that appeals filed by the affected parties can urge many grounds and it is open for them to press a particular ground for disposal of the appeal, on the short ground and plead for remand. When consideration of such short ground and disposal of appeal are entrusted to the Regional Bench, even in the cases where certain issue call for consideration by the Special Bench, can we refuse to go into the short ground? Our answer to this question has to be 'no' because these short grounds do not call for consideration of any classification or valuation issue; only for that reason, the President has delegated the disposal of such appeals to the Regional Bench by issue of a Public Notice. Even under Section 129C of the Customs Act, the President is required to constitute a Special Bench having not less than two members, one of whom is a judicial member for considering an appeal against a decision involving consideration among other things, the rate of duty or the valuation of the goods. The Appellate Tribunal shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of discharge of its functions. Hence we agree with Shri Mondal that the President's delegating the functions to Regional Benches - some specified categories of cases, which otherwise would call for consideration by the Special Bench, by issue of a Public notice, would be within the frame work of Section 129C of the Customs Act, as made applicable to disposal of Central Excise appeals as well [vide Section 35D(1) of the Central Excise Act]. In a way, for the limited purpose, the regional benches constituted with one Technical Member and Judicial Member, function as a special bench, for functioning in the limited sphere set out in the Public Notice. Hence we are unable to accept the contention of the Id. Consultant that we are lacking in jurisdiction to deal with the short grounds urged by S.D.R. 7.8 Another point raised by the Id. Consultant is that our powers are circumscribed by Section 35E.We are required to answer all the points raised in the Board's order and cannot overlook them. We have no dispute over this proposition, if the appellant seeks for disposal of the appeal for considering all the points, in which case we would not have entertained hearing of the appeal but bundled this file out to Delhi. It is open for any appellant to urge only a particular point covered in the ground of appeal and seek for disposal only on that ground, without pressing other grounds.
Here, Shri Mondal has meticulously avoided raising any ground touching classification or valuation. He only seeks for a remand on the short ground of introducing certain documents (alleged to be appearing suspect) which have been relied upon without any investigation thereon and adverse findings have been given by the Collector against the department. Are we justified in rejecting the prayer, especially when no effective rebuttal of the factual position regarding the introduction of invoices relating to Titanium dioxide without making them available for investigation is forthcoming from the Id. Consultant for the respondents? Despite various legal arguments, the factual position stated by SDR has not been rebutted by the respondents even during the hearing before us. Hence on this ground alone, the appeal is to be allowed by way of remand.
7.9 Moreover under Section 35C of the Act, the Tribunal's powers over the manner of disposal can be to pass such orders confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority, which has passed such order, with such directions as deemed fit for a fresh adjudication or decision, after taking additional evidence, if necessary. Hence when an allegation is made about introduction of certain invoices without investigation and they are relied upon by the Collector and such an allegation on this factual plea is not rebutted before us, we are justified in ordering remand with directions to cause investigation on the genuineness of the documents produced by the respondents before taking these on record for either acceptance or rejection. Moreover, the other plea namely non-consideration of the voluminous documents cited in the S.C.N. by the Collector also indicates the need for proper consideration of these evidences either for rejection or for acceptance. These evidences cannot be kept underneath the carpet. They are to be discussed either for acceptance or for rejection by the adjudicating authority. He cannot gloss over it. If he does that, it would amount to a non-speaking order, in which case also a remand would be necessary.
Moreover, even the respondents seem to have a grievance that the Collector has only offered a limited cross examination and not given the opportunity for cross examining the main deponents against them including the Dy. Director (Anti-evasion), who is alleged to have masterminded this case against the respondents at the behest of I.P.C.L, where he was previously working. We also agree with that cross examination of the persons named by the respondent would be necessary in the interest of providing natural justice for the respondents.
7.10 But then a plea is raised by the Id. Consultant that natural justice is only the preserve of the persons proceeded against and not available for the department to claim. He refers to the decision of Nippon Bearings in the context of Sections 122 & 124 of the Customs Act. He also questions the need for department being represented by officers of anti-evasion and the need for making available every letter and document to them for comments or investigation. As against these arguments, we observe that the principles of natural justice means 'fair play' in adjudication. It is open for the department to ensure representation from their side during adjudication. There is a 'Us' between the Department and the assessee, the moment a S.C.N. is issued for adjudication. 'Lis' does not spring out of the pleas only during appeal. This is the view held by us in the case of Lakhanpal - 1992 (62) E.L.T. 46 (Tri.). This view of ours upholding the Department's right to be represented in adjudication before the Collector in proceedings under Section 11A has also been prima facie upheld by the Bombay High Court in the same case, [vide para 5 - 1993 (63) E.L.T. 61 (Bom.)]. We also are given to understand that the appeal against this prima facie order of Bombay High Court has been rejected by the apex court. Hence in the lis' between the department and the respondents before the adjudicator, when there are evidences to show the participation of Director (Anti-evasion) as representing the department, it would not be fair, where certain documents have been taken on record after the personal hearing proceedings were over and these documents were kept away from the scrutiny of the officers representing the department. Even if we are to assume (based on the contention of Shri Sunder Rajan) that the Collector, as an officer of the department, has to look after the interests of the department, has he been fair to the department he is representing by letting in evidences without proper verification? We however make it clear that though Collector is an administrative head of the Central Excise Department, but, when he sits as an adjudicator, he is to act without bias of the department and he cannot assume the role of a prosecutor.
This is also the view held by us in the above case of Lakhanpal. Hence we are unable to agree with the Id. Consultant that once Collector has accepted these documents and appreciated the evidences in a particular manner, he cannot be estopped from doing that, in adjudication. It is not a question of appreciation of evidences in a particular manner. It is a question of propriety in letting the evidences at a belated stage without investigation and without being given a fair opportunity to the other side. It is also not a case of choosing some evidences for appreciation but it is a case of ignoring the evidences cited in the Show Cause Notice without consideration in preference to certain new evidences introduced belatedly by the respondents without giving a fair opportunity to the other side for rebuttal.
8. Hence, having considered all the objections from the Id. Consultant, we come to a conclusion that the short grounds pleaded by Shri Mondal are well within the jurisdiction of this Bench for consideration and the said grounds are acceptable to us for ordering remand.
9. In the result, without expressing any opinion on the nature of evidences for or against the Department we set aside the order of the Collector and remand the case back to him for making available the copies of the invoices relating to purchase of Titanium dioxide to the Department for verification and based on the verification (report of which should also be made available to the respondents) and after hearing the respondents, decide on the validity of these documents. He may also have to consider all the evidences relied in the S.C.N. either for acceptance or rejection and pass a speaking order. If the statements of the persons are sought to be relied upon, cross examination by the respondents may be extended in respect of such witnesses desired and named by the respondents. If the affidavits of certain persons are sought to be relied upon, the department's representative if desired by him, may be given an opportunity to examine the deponents. After complying with all these required necessities and after due hearing given to the respondents he may pass a speaking order in accordance with law, discussing the evidences cited in the S.C.N. as well as those presented by the respondents.
10. Before parting, for the sale of record, we are to consider one more argument of the Id. Consultant. He pleads that the Departmental Representative is only the mouthpiece of the Collector/the Board and he cannot pick and choose the grounds. If the Departmental Representative is the mouthpiece of the Collector, so also the Id. Consultant is the mouthpiece of the respondents. Both are to act,under the instructions from the parties, they represent. It is not open for us to shut the mouthpiece of the Collector nor is it open for us to urge him to press all the grounds or only certain grounds mentioned in the appeal. On instructions from the Collector, if the D.R. chooses to press only certain short grounds for urging a remand, we cannot find fault with either the D.R. or the Collector, whom he is representing. Likewise, if the assessees file an appeal, if their counsel, during the hearing before us, acting on instructions from his clients, urge only certain short grounds to plead for a remand, we cannot refuse to go into those short grounds. So long it is accepted by the Id. Consultant that the D.R. is the mouthpiece of the Collector, that mouth cannot be controlled by our directions. It can be controlled only by the Collector he is representing. Hence, the objection also is bereft of any merit.
11. In the result, appeal from the Revenue is allowed by way of remand in the above terms, (vide para 9).
12. While concurring with the findings arrived at by my learned brother Shri R. Jayaraman, Member (Technical) and endorsing to the reasonings adopted, by way of supplementing the reasonings on certain contentions of the legal nature, raised by the Id. Consultant appearing for the Respondents, to the effect that (i) plea of non-compliance with the principles of natural justice is not available to the department, (ii) grounds other than those specified in the order of CBEC dated 15-3-1993, in exercise of the powers conferred vide Section 35E(1) of CESA, 1944, cannot be urged by the Id. SDR, at this stage, (iii) the adjudicating Collector being an officer from the department, has to safeguard and look after the interest of the department and there could be no need for him to refer any document or evidence produced at the adjudication stage, to the investigating agency and that presence or participation of the investigating agency at the conduct of adjudication proceedings, is neither warranted nor required; necessitates to have some discussion from the legal point of view, and hence additional exercise in that regard is made.
13. With introduction of Chapter VIA in the Central Excises and Salt Act, 1944, with effect from 11-10-1982, as replacement of Sections 35, 35A and 36, as they then existed, the revisional powers of the Board get abrogated, but instead, the right to prefer an appeal by the department, is invested in various authorities specified therein, and by virtue thereof, vide Section 35E(1) of the Act, the Board is invested with the powers to call for the record of adjudication proceedings and on being satisfied, to order filing of an appeal before the CEGAT, and vide sub-section (4) of the said section, the application made to the CEGAT thereunder has to be treated "as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of Section 35B so far as may be, apply to such application". The logical conclusion that is apparent, is that all the grounds available to the assessee-ap-pellant before the Tribunal, to plead, are also available to the applications filed by the Department pursuant to the directions vide Section 35E(1) of CESA.14. Non-compliance with the principles of natural justice is one of the grounds available to the assessee-appellant, to plead for setting aside the order of the adjudicating authority. This ground is, by settled position pf law, deemed to be an issue of law, and can be raised at any time during the hearing of an appeal. That does not involve adducing of any additional evidence so as to be discarded or not entertained as an issue of fact or requiring further scrutiny, otherwise than what is apparent on record of the adjudication proceedings. When this privilege is available to the assessee-appellant, there could be no justifiable ground to discriminate against the appellant-department. The decision of the CEGAT Special Bench 'D' in Collr. of Customs v. Nippon Bearings (P) Ltd. - 1991 (55) E.L.T. 68 (Tri.) referred to by the Id.
Consultant, is based on the facts entirely different from those here, and on the contrary the earlier decision in Collector v. Walkar Angaria & Sons 1986 (26) E.L.T. 851 (Tri.) which the said Special Bench has held to be not applicable, appears to be in conformity with the situation here, and hence ratio thereof would stand attracted.
15. In the adjudication that is contemplated under the provisions of the Central Excises and Salt Act, 1944, the authority adjudicating has been recognised as a quasi-judicial authority, and though the authority adjudicating happens to be an officer from the department, he is supposed to act judicially without tilting in favour of either of the parties before him, and it would be against the very basic tenets of law, if he is taken as an officer who has to guard the interest of the department, as the moment he is taken as the one who has to guard the interest of the department, the element of judicious approach goes out, and fortunately that is not what is contemplated in the Act or the Rules framed thereunder.
16. When the authority adjudicating is recognised as a quasi-judicial authority, he has to act impartially and has to provide fair opportunity to both the parties before him namely the department, which has placed the entire case alongwith all the documents and evidence gathered during the investigation, and the other side, who by filing written reply to the Show Cause Notice issued before initiation of adjudication proceedings, to plead their case. May be that in some cases, the department may feel contended by whatever they have enclosed with the Show Cause Notice, as the sufficient material, and may not depute any representative to participate in the proceedings, but if in some specific case, with the gravity involved, some officers are deputed to look into the interest of the department, it becomes obligatory for the adjudicating authority to keep them posted with the material introduced in the evidence and make the opportunity for counter representation, available to them. It is satisfactorily shown that such opportunity is not given.
17. When the factual position is duly discussed by my learned brother to which I endorse, the same is not discussed in detail here. The same however clearly indicates that the matter warrants remand.
18. When the application filed is to be treated as an appeal, and when this Bench is designated as Regional Special Bench duly invested with certain limited jurisdiction, and when the aspect concerned falls within the purview of the same, this Bench has jurisdiction to remand the matter.
19. In the result, I agree that the matter be remanded as proposed by my learned brother.