Collector of C. Ex. Vs. M.M. Rubber and Co. - Court Judgment

Excerpt:
1. by order-in-original no. 34/84, the collector of central excise, madras, held, as barred by limitation, the amount demanded from the appellants towards duty on biaxially oriented polypropylene (bopp) films as set out in the show cause notice dated 25-10-1983, he also directed the asstt. collector of central excise to examine the duty liability on polypropylene granules. in view of these findings, the collector dropped further proceedings against the appellants. the central board of excise & customs (hereinafter referred to as the 'board') called for, under section 35e(1) of the central excises & salt act, 1944 (hereinafter referred to as the 'act') and examined, the records of the proceedings leading to the said order of the collector for the purpose of satisfying itself as to.....

Judgment:
1. By order-in-original No. 34/84, the Collector of Central Excise, Madras, held, as barred by limitation, the amount demanded from the appellants towards duty on biaxially oriented polypropylene (BOPP) films as set out in the show cause notice dated 25-10-1983, He also directed the Asstt. Collector of Central Excise to examine the duty liability on polypropylene granules. In view of these findings, the Collector dropped further proceedings against the appellants. The Central Board of Excise & Customs (hereinafter referred to as the 'Board') called for, under Section 35E(1) of the Central Excises & Salt Act, 1944 (hereinafter referred to as the 'Act') and examined, the records of the proceedings leading to the said order of the Collector for the purpose of satisfying itself as to the legality and propriety of the said order. After considering the matter at length, the Board directed the Collector, under the provisions of the aforesaid Section 35E(1) of the Act, to apply to this Tribunal for the correct determination of the points (as set out in the Board's order) arising out of the Collector's order. In pursuance of the Board's directions, the Collector of Central Excise has filed the present appeal.

2. When this matter was taken up for hearing on 28-5-1990 Shri Raju K.Lukose, learned counsel for the appellants, raised a preliminary objection as to the maintainability of the appeal. His submission was that the order of the Board had been made after the expiry of one year from the date of the order of the adjudicating authority and was, therefore, violative of Sub-section (3) of Section 35E of the Act and that the appeal filed before the Tribunal in pursuance of the Board's direction was not maintainable.

3. Shri S. Chakraborti, learned D.R., however, contended that the aforesaid objection was not sustainable. His submission, inter alia, was that there are two dates shown in the Collector's order, namely, 28-11-1984 and 21-12-1984 and with reference to the latter date the Board's order was within time. To this, Shri Lukose replied that the appellants had received the Collector's order on 21-12-1984 in evidence of which he produced for our perusal a photo-copy of the order as received by the appellants. He also contended that the date of the Collector's order should be taken as 28-11-1984 and not 21-12-1984.

4. We have considered the submissions of both sides. Sub-sections (1) and (3) of Section 35E of the Act which are relevant for the present purpose are reproduced below :- "SECTION 35E. Powers of Board or Collector of Central Excise to pass certain orders.-(l) The Board may, of its own motion, call for and examine the record of any proceeding in which a Collector of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order,(2) xxx xxx xxx xxx xxx (3) No order shall be made under Sub-section (1) or Sub-section (2) after the expiry of one year from the date of the decision or order of the adjudicating authority.

It may be noted that Sub-section (3) specifically lays down that no order shall be made under Sub-section (1) after the expiry of one year from the date of the decision or order of the adjudicating authority.

In the present instance, the exact date on which the Collector passed the impugned order is not available on record. The photo-copy of the order, however, reads inter alia - "C. No. V/15A/15/1/84 CX. ADJ. II dated 28-11-1984 Order-in-Original No. 34/84". Therefore, the date of the order can be taken to be, at the outside limit, 28-11-1984. The copy of the Collector's order has been attested by the Supdt.

Adjudication, on 21-12-1984. This evidently cannot be taken to be the date of the Collector's order. Turning to the Board's order, it is clear that the Member of the Board made the order on 11-12-1985. This is clear from photo-copy of the Board's order on record. The order was despatched on or about 19-12-1985. The relevant dates, therefore, for our present purpose, are :- Applying the plain words used in Sub-section (3) of Section 35E of the Act, it may be seen that the Board had made the order after the expiry of one year from the date of the order of the adjudicating authority.

5. This view would gain support from the different terminologies used in the different provisions in Chapter VIA relating to appeals in the Act. Section 35A provides that any person aggrieved by any decision or order passed under the Act by a Central Excise officer, lower in rank than a Collector of Central Excise, may appeal to the Collector of Central Excise (Appeals) within 3 months from the date of communication to him of such decision or order (emphasis added). Similarly, Sub-section (3) of Section 35B provides that every appeal to the Appellate Tribunal shall be filed within 3 months from the date on which the order sought to be appealed against is communicated to the Collector of Central Excise, or as the case may be, the other party preferring the appeal (emphasis added). Thus, it may be seen that these two provisions stipulate the date of communication of the order sought to be appealed against as the date of commencement of the period limitation whereas in Sub-section (3) of Section 35E it is not the date of communication of the order of the adjudicating authority but the date of the decision or order of the adjudicating authority.

6. Shri Chakraborti made a reference to the Tribunal's decision in Collector of Central Excise, Baroda v. Sarabhai Chemicals, 1986 (26) ELT 1057. In that case, the Asstt. Collector's order which was sought to be reviewed was dated 12-1-1983 and the question was whether the Collector's authorisation under Section 35E(2) of the Act issued on 8-10-1984 and 9-1-1985, being over one year after the date of the Asstt. Collector's order, was time-barred under Section 35E(3). Section 49 of the Finance Act, 1984 amended Sub-section (3) of Section 35E of the Act reducing the period of 2 years to one year within which the Collector (or the Board) had to pass his/its order directing the adjudicating authority (or the Collector) to apply to the Collector (Appeals) (or the Tribunal) for determination of certain points, the Tribunal held that since the order sought to be reviewed was passed on 12-1-1983 and the amended provision came into effect from 11-5-1984, it could not be held that the Collector's order was hit by time-bar in the absence of an express provision in the amending enactment giving the amendment retrospective effect. In the present case, the impugned order was passed on 28-11-1984 or earlier but after the amendment of 11-5-1984 (the hearing before the Collector, as seen from his order, was on 21-8-1984). The facts being not similar to those in the Sarabhai Chemicals case, that decision has no application to the present case.

7. Both sides referred to the Delhi High Court judgment in Associated Cement Co. Ltd. v. Union of India, 1981 (8) ELT 421 in which the Court had occasion, inter alia, to construe the following proviso to Section 36(2) of the Act as it stood at the material time :- "Provided further that no proceedings shall be commenced under this subsection in respect of any decision or order (whether such decision or order has been passed before or after corning into force of this sub-section) after the expiration of a period of one year from the date of such decision or order." On going through the judgment we find that the Court did not express any opinion on the question whether the period of one year should be computed from the date of the decision or order or the date of communication of such decision or order. Therefore, this judgment is not relevant to the question before us in the instant matter.

8. In the light of the foregoing discussion, we hold that Board's order was made after the expiry of one year from the date of the order of the adjudicating authority. It did not, therefore, conform to the requirement of Sub-section (3) of Section 35E of the Act. The instant appeal filed by the Collector in pursuance of the Board's direction, is, therefore, incompetent and is not maintainable. Accordingly, we dismiss the same.

9. In view of the dismissal of the appeal on the preliminary issue of its maintainability, the cross-objection does not survive for consideration. It is also accordingly dismissed.

10. The order of dismissal of the appeal and the cross-objection was pronounced in the Court on 28-5-1990 on the conclusion of the hearing.

This detailed order gives the reasons therefor.