THIRD MEMBER ON REFERENCE : DR. S.N. BUSI, MEMBER (T) TRADE & INDUSTRIES LTD. Vs. COLLECTOR OF C. EX., CALCUTTA-I

JUDGEMENT

(1.) THESE five appeals arise out of the same common impugned Order passed by the Commissioner of Central Excise, Calcutta -I, Vide his impugned Order demand of duty of Rs. 74,08,636/ - has been confirmed against the first appellant M/s. Trade & Industries (P) Ltd. (now T & I Ltd.) and penalty of Rs. 1 lakh has been imposed. The demand has been made under the impugned Order on the ground that M/s. T & I Ltd. got some items manufactured by the other four appellants who were, in fact, their dummy units and who cleared the goods after availing the benefit of small scale exemption. The goods were then sold by these dummy unis to M/s. T & I Ltd. at a much lower price than charged by M/s. T & I Ltd. from their customers.

(2.) ALL the appeals were heard on 14 -6 -1999 on the issue of jurisdiction of the Collector of Central Excise, Calcutta -I to adjudicate the case and the orders were reserved on this issue.

(3.) SHRI S.K. Bagaria, ld. Adv. appearing for the appellants submitted that the demand of duty has been confirmed against M/s. T and I Ltd. whose factory is situated at Tezpur in the State of Assam and admittedly the Collector of Central Excise, Calcutta -I did not have any jurisdiction over the appellants factory. He further submitted that the factory of M/s. Mayur Exports was under the jurisdiction of Calcutta -II Collectorate, factory of M/s. Bagaria Udyog was also under the jurisdiction of Calcutta -II Collectorate. M/s. Bihar Ispat Engineers (P) Ltd. were having their factory which fell under the jurisdiction of Coimbatore Collectorate in the State of Tamil Nadu. It was only the Registered Office of M/s. T and I Ltd. and other appellants which were situated within the geographical jurisdiction of the Collector of Central Excise, Calcutta -I which factor did not confer any jurisdiction on the said Collector to initiate the proceedings or to adjudicate the same as regards the demand of duty against the appellant. If at all any clubbing of clearances of all the units was required to be done, the proper authority having jurisdiction to do so was the Central Excise authority having jurisdiction over the factory of M/s. T and I Ltd. On similar grounds he assailed the order of the Commissioner by arguing that even assuming that the machinery was assembled at the buyers site and came into existence at that point of time, all the buyers being situated in the State of Assam, Tamil Nadu and other north -eastern states, none of them fell within the jurisdiction of Calcutta -I Collectorate and as such even from this point of view Calcutta -I Collector was not having any jurisdiction. He also relied upon the definition of Collector as it existed during the relevant period in Rule 2(ii)(zd) of the Central Excise Rules, 1944. He submitted that the geographical jurisdiction of the Collector of Central Excise Calcutta -I was only for the areas specifically mentioned in clause (zd) of Rule 2(ii) and he had no jurisdiction whatsoever over the factories situated outside the said areas. In support of his above submissions he placed reliance on the decision of the Honble Supreme Court in the case of Commissioner of Sales Tax v. Sarjoo Prasad Ramkumar - 1976 (37) STC 533, wherein it was held that the Assistant Sales Tax Officer, Sector -II had no jurisdiction to assess the dealers in Sector -III. The rule making authority had empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation was made the jurisdiction of each officer was confined to the area allotted to him. He also relied upon the Tribunals decision in the case of Modi Xerox Ltd. v. C.C.E. - 1990 (50) E.L.T. 397.