Full Judgment
2. Appeal No. E/558/93/MAS: Shri Chidambaram, the learned Consultant for the appellant, submitted that the appellant took Modvat Credit after filing the declaration under Rule 57G of the Central Excise Rules, 1944 and the Range Superintendent disallowed the Modvat credit in respect of certain products by directing the appellant to debit the same. When the appeal came before us, the Tribunal disposed of the matter by order of remand on 9.2.1993 by Order No. 54/1993 by directing the learned Collector (Appeals) to dispose of the following issues: (i) Whether the Superintendent is competent to allow or disallow Modvat Credit; (ii) Whether the so called direction given by the Superintendent directing the appellant to reverse the credit is an order in terms of RT-12; (iii) Whether the Superintendent's direction would amount to an appealable order; (iv) Whether the Assistant Collector is right in law to hold that the order of the Superintendent is null and void and yet the appellant would not be entitled to any relief since the appellant had reversed the Modvat credit.
In the impugned order, while giving a finding that the competent and proper officer to allow or disallow Modvat credit is the Assistant Collector, the learned Collector (Appeals) in para 8 of the impugned order has also given a finding that while assessing RT-12 the Superintendent of Central Excise can issue direction disallowing the Modvat credit. It was submitted that the findings of the Collector (Appeals) in this regard in paras 7 and 8 of the impugned order are mutually contradictory. The learned Consultant, therefore, submitted that once the appellant's eligibility to Modvat credit is not a issue the Superintendent of Central Excise has no authority or competence to disallow the same unless credit taken was in excess or over and above the permitted extent. The learned Consultant, therefore, prayed that inasmuch the first order of the Superintendent of Central Excise was null and void as declared by the Assistant Collector himself by his order dated 16.3.1992, the order of the Superintendent would not in law give rise to any legal consequence. It is, therefore, prayed that the matter may be remanded for re-consideration of the issue.
4. We find that in respect of the order of the Superintendent of Central Excise referred to supra the Assistant Collector of Central Excise, Palghat, by his order dated 16.3.1992 has observed as under: Under Rule 57-I of Central Excise Rules, 1944 as amended by Notification No. 28/88 dated 6.10.1988 issue of show cause notice for disallowing any Modvat credit wrongly availed is mandatory. In the RT-12 for the month of January, February and March, 1991 the Range Officer, Palghat-I Range disallowed certain Modvat credits without issue of any Show Cause Notice. As such the endorsement directing the licensee to reverse the alleged wrong availment or Modvat is null and void. But the party having reversed the Modvat credit in obedience to the direction, the order has been complied with and so the order can now be reversed or set aside only in appeal. Party was therefore not offered the personal hearing solicited. They may agitate the matter in appeal before the Collector of Central Excise (Appeals), Cochin who alone has jurisdiction in the matter.
We further note that in the impugned order the learned Collector (Appeals) also in dealing with the competence of the Superintendent to disallow Modvat credit has observed as under: The first question is whether the Superintendent is competent to allow or disallow Modvat credit. It is now a well settled point that the Assistant Collector is the proper officer to decide the eligibility to the Modvat. Therefore, the Superintendent was not competent to disallow the Modvat in question.
In regard to the above finding there is no further appeal by the Department and the same has been allowed to become final. The further question that would require consideration is as to whether an order by an authority lacking inherent jurisdiction or competence would at all give rise to any legal consequence and should be appealed against. If an order is nullity or nonest or void in the eye of law, its executability can always be resisted. Therefore, for the facts set out above and in the light of the apparent contradiction in the findings of the learned Collector (Appeals) extracted above and also taking note of the fact that the finding that the Assistant Collector is the competent authority has not been challenged, we are obliged to set aside the impugned order and remand the matter to the original authority for re-consideration of the issue in accordance with law and order accordingly.