WILSON AND COMPANY Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE matter referred to the Larger Bench for consideration relates to the status of an order passed by a Central Excise Officer without his jurisdiction. With effect from 27 -12 -1985, the show cause notice in regard to duty of excise short levied or short paid, etc., by reason of fraud, collusion or any wilful mis -statement or suppression of facts was to be decided by the Collector of Central Excise. The Tribunal while hearing Appeal No. E/150/89 - MAS of Wilson and Company Ltd., and Appeal No. E/236/90 - MAS of the Revenue with regard to the similar issue and with reference to the same assessee but for a subsequent period, noted that the Superintendent of Central Excise had passed an order on 29 -12 -1987 although he was not competent to initiate any proceedings and pass orders in proceedings where the demand of duty was for a period of more than six months. From the facts as recorded in para 3 of the Tribunal's decision aforesaid, it is seen that after ignoring the order, dated 29 -12 -1987 of the Superintendent of Central Excise, the Collector of Central Excise independently exercised the jurisdiction under the Proviso to Section 11A of the Central Excises Act, 1944 (hereinafter referred to as the 'Act'), for the same period by the issue of a show cause notice, and then proceeded to pass the adjudication order. After making a reference to an earlier decision of the Tribunal in the case of Akola Oil Industries Ltd. v. C.C.E., Nagpur -1991 (53) E.L.T. 136 (Tribunal) the Bench noted that when the order of the authority suffers from an inherent lack of jurisdiction in is ab initio void, nonest in the eye of law and consequently a nullity, the same would not give rise to legal consequences. The Bench observed that such an order was different from a wrong order passed by an officer, who was competent to pass such an order and that such a wrong order could be reviewed. It was added that if an officer who has no jurisdiction or competence at all to pass an order but he purports to pass an order, then the same would be plainly void, nonest, in the eye of law and a nullity, and would not give rise to legal consequences; such a void and nonest order will not take away the power of another competent officer from exercising his power in terms of the proviso to Section 11A of the Act, to initiate proceedings for recovery of duty not levied or short levied, etc. It was in this background that the Bench referred the matter to the Larger Bench in view of the larger implications and wider ramifications of the issues involved. In the other case referred to the Larger Bench, show cause notice invoking the extended period of limitation was issued to M/s. Sunrise Struc -turals & Engg. Co. Pvt. Ltd., on 11 -3 -1985 (prior to 27 -12 -1985), by the Asstt. Collector of Central Excise, Nagpur. This show cause notice was disposed of by the Asstt. Collector of Central Excise on 31 -7 -1986, although with effect from 27 -12 -1985 the show cause notice invoking the extended period of limitation was to be decided only by the Collector of Central Excise. The Collector of Central Excise, Nagpur under Memorandum, dated 31 -7 -1987 observed that this order passed by the Asstt. Collector of Central Excise was a nullity and invalid. He re -opened the proceedings and proceeded to adjudicate the case in exercise of the powers vested in him under Proviso of Section 11A of the Act.

(2.) SHRI V. Sreedharan, Shri G. Shivdas and Shri M.P. Devnath, all Advocates appeared for M/s. Sunrise Structurals and Engg. Co. Pvt. Ltd. None appeared for M/s. Wilson and Company Ltd. Revenue was represented by Shri Sanjeev Srivastava, JDR. Shri V. Sreedharan, Advocate submitted that the order of the Asstt. Collector of Central Excise although beyond jurisdiction should have been reviewed under the relevant provisions of the law and that the order once passed could not be ignored. It was not open for the Collector of Central Excise to ignore the order of the Asstt. Collector of Central Excise even when it was passed without jurisdiction. He relied upon the Tribunal's decision in the case of Akola Oil Industries Ltd. v. CCE - 1991 (37) ECR 144 (Tribunal). He also referred to the Publication 'Administrative Law' by Sir William Wade. In reply, Shri Sanjeev Srivastava, Departmental Representative submitted that after the legislative dictum as contained in Section 8 of the Central Excises & Salt (Amendment) Act, 1985 (hereinafter referred to as the 'Amendment Act of 1985') the proceedings pending before the Asstt. Collector of Central Excise or any officer lower in rank, stood transferred to the Collector of Central Excise. Even when hearing had been granted by the Asstt. Collector of Central Excise, the pending proceedings were to be transferred to the Collector of Central Excise. The show cause notice remained pending for adjudication by the competent authority and the order passed by the authority without jurisdiction was no order in the eye of the law. He pleaded that no sanctity could be imparted to the nonest order by reviewing the same. He also referred to the Administrative Law by Sir William Wade. Both the sides referred to the case law in support of their rival contentions. These will be discussed at appropriate place in this order.

(3.) WE have carefully considered the matter. For our consideration is the status of the order passed by a Central Excise Officer after he had been divested of the power to deal with the subject.