By TIOL News Service

MUMBAI, FEB 01, 2013: IN the background of the picturesque Powai lake, the AC, C.Ex., Powai Division, Mumbai-II passed an order against the respondent confirming Central Excise duty demand of Rs.6,61,550/- u/s 11A(1) of the CEA, 1944 and also imposed interest u/s 11AB and an equivalent penalty u/s 11AC.

Although no portion of the demand raised in the SCN was dropped or for that matter no penal provision proposed was missed out, the CCE, Mumbai-II did not like the AC, C.Ex. transgressing the monetary limits contained in the Board Circular 865/3/2008-CX dated 19.02.2008 inasmuch as in terms of the said Circular the AC, C.Ex could have decided cases involving a duty demand of up to Rs.5 lakhs ONLY.

So, the CCE, Mumbai-II set in motion the review process and resultantly an appeal came to be filed before the Commissioner(Appeals) by the Revenue.

The Commissioner(A) accepted the plea of the Revenue and set aside the order passed by the AC, C.Ex., Powai Division.

This should have ended the matter but the Revenue had another grievance – that the lower appellate authority did not give any liberty to the competent authority to decide the matter on merits.

And once again, the CCE, Mumbai-II is before the appellate authority, the only difference being that he is before the CESTAT.

The respondent assessee chose to ignore the rumblings and remained absent in the proceedings before the Tribunal.

The Revenue representative submitted that by passing such an order the department has been deprived of the opportunity to re-adjudicate the matter afresh by the competent authority and thus put into jeopardy the interests of the Revenue.

The Bench observed -

"5.1 The demand has been confirmed by the Assistant Commissioner under the provisions of section 11A(1) of the Central Excise Act, 1944 and the said section empowers a ‘Central Excise Officer' to issue notice in cases where Excise duty has not been levied or paid or short-levied or short-paid or erroneously refunded. The ‘Central Excise officer' referred to therein is the officer competent to assess and determine the duty liability. Under the Excise law it is the Superintendent of Central Excise who is the assessing officer and, therefore, the notice issued by the jurisdictional Assistant Commissioner, who is a superior authority, is perfectly valid in law and, therefore, he is competent to adjudicate the duty not levied or short-levied or erroneously refunded. Power of adjudication prescribed by the Board vide a Circular dated 19/02/2008 is only an administrative order and it is meant for smooth and efficient running of the administration. Such circular cannot take away the power vested on a Central Excise officer under the provisions of the Central Excise Act. The very same issue was decided by a three member bench of the hon'ble apex Court in the case of Pahwa Chemicals Pvt. Ltd. vs. Commissioner of Central Excise, Delhi (2005-TIOL-43-SC-CX-LB). In the said case, the hon'ble apex Court held that the administrative directions of the Central Board of Excise & Customs allocating different works to various classes of officers cannot cut down jurisdiction vested in them by statute and may be followed by them at best as a matter of propriety. Issuance of show cause notice or adjudication contrary to such directions could not be set aside for want of jurisdiction especially as no prejudice is caused thereby to the assessee/noticee. It was more so as the legislature has purposely replaced the word ‘Collector' with ‘Central Excise Officer' in section 11A of the Central Excise Act, 1944.

5.2 In view of the above position the Assistant Commissioner, who is a Central Excise Officer was statutorily competent to decide the matter. Therefore, setting aside such an order by the lower appellate authority, though on appeal filed by the Revenue, is clearly unsustainable and bad in law and, therefore, the order of the lower appellate authority has to be set aside.

5.3 The Revenue's plea for a direction to send back the matter for fresh adjudication by the competent authority is not really required in view of the decision of the hon'ble apex Court in the case of Pahwa Chemicals Pvt. Ltd. (supra). The order passed by the original adjudicating authority is statutorily correct especially when the said order has not been challenged by the respondent herein. Therefore, what is now required is to restore the order of the original adjudicating authority. Accordingly, while setting aside the impugned order, I restore the order passed by the original adjudicating authority vide order no. 01/JSC/AC/2011-12 dated 28.05.2011."

The Revenue appeal was disposed of in the above terms.

Hopefully this should be the end of the story!

(See 2013-TIOL-199-CESTAT-MUM)