L.M.L. Ltd. vs R.K. Sharma
1991 Latest Caselaw 242 Del

JUDGMENT

M.C. Jain, C.J.

1. By this writ petition the petitioner seeks quashing of summons dated 3rd July 1990, Annexure 5, issued under Section 14 of the Central Excises & Salt Act, 1944 by the Assistant Director (DZU), Central Excise, New Delhi.

2. The summons have been challenged on the ground that the Asstt. Director has no jurisdiction and is not a quasi-judicial authority and the summons does not specify any ground for holding any inquiry. No such inquiry can be conducted by the Assistant Director. Assessment has already been completed. It is not liable to be re- opened and besides that the documents called from the petitioner, list of which is appended to the summons, have been in fact causing harassment to the petitioner inasmuch as it would not be possible for the petitioner to finalise the sales tax assessment as well as income tax assessments. The summons which have been issued to the petitioner reads as under :-

"Dated the 3rd July, 1990. SUMMONS (Under Section 14 of the Central Excises and Salt Act, 1944)

To

Shri R. S. Rastogi, General Manager (Finance & Accounts), LML Limited, C-10, Panki Ind. Estate, Site-II, KANPUR 208 022.

Whereas a case against M/s. L.M.L. Limited about evasion of Central Excises and Salt Act, 1944 and the Rules made there under, is being inquired by me/under my orders.

AND WHEREAS I have reason to believe that you are in possession of facts and/or documents and/or things which are relevant to the above inquiry.

You are hereby summoned under Section 14 of the Central Excises and Salt Act, 1944 to appear before me in person on 30-7-1990 at 11.00 hours in my office at the above given address to give evidence or to make statement truthfully on such matters concerning the inquiry as you may be asked and to produce the documents and things mentioned in the Schedule below, for my examination.

If you fail to obey this summons and intentionally omit to attend, to give evidence, to make statement and/or to produce the documents and the things, you will be liable to be punished under the provisions of Sections 174 and 175 of the Indian Penal Code.

      Official                SCHEDULE
    Seal                    As per annexure attached
    GIVEN under my 
    hand and the Seal of office today, the 3rd day of
    July 1990. 
                                               Sd/- 3-7-1990 
                                         Assistant Director (DZU)
                             Directorate General of Anti-Evasion (C. Ex.)                                                   New Delhi" 
 
 

It would appear from the summons that the Asstt. Director (DZU) is making an inquiry under the Act in respect of evasion of Central Excise duty or contravention of the provisions of the Central Excises and Salt Act by the petitioner company and that in connection with the holding of inquiry, summons have been issued under Section 14 of the said Act directing Shri R. S. Rastogi, the General Manager to appear before the authority to give evidence of such matters concerning inquiry as may be put to him and to produce the documents mentioned in the Schedule for examination by the authority. Section 14(1) which is relevant, reads as under :- "Section 14. Power to summon persons to give evidence and produce documents in inquiries under this Act. - (1) Any Central Excise Officer duly empowered by the Central Government in this behalf shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this act. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned."

3. A perusal of the above provision would show that any Central Excise Officer, if empowered by the Central Govt., shall have power to summon any person whose attendance is considered necessary either for the purpose of giving evidence or for the purpose of production of documents or for any other thing in any inquiry which such officer is making for any purpose of the Act. The summons would reveal the purpose of the Act for which inquiry is being conducted by the Assistant Director. The question is as to whether the Asstt. Director has been conferred with the powers under Section 14 of the Act. The expression 'Central Excise Officer' has been defined in Section 2(b) as under :-

"Section 2(b) -

"Central Excise Officer" means any officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act."

4. There is a further notification issued by the Central Government conferring all the powers of a Central Excise Officer on the Asstt. Director. That notification is dated 27th March, 1986, Annex. I to the counter. The relevant portion of the notification is reproduced below :-

                       "GOVERNMENT OF INDIA             CENTRAL BOARD OF EXCISE AND 
        CUSTOMS 
                            NEW DELHI, DATED THE 27th MARCH, 1986
                                         6th 
    CHAITRA 1906 (SAKA) 
                               NOTIFICATION
                  No. 215/86-CENTRAL EXCISES 
 
 

G.S.R. 549 (E). In exercise of the powers conferred by clause (b) of section 2 of the Central Excises and Salt Act, 1944 (1 of 1944), read with rule 4 of the Central Excise Rules, 1944, and in supersession of the notification of the Central Board of Excise and Customs No. 191/84-Central Excises, dated the 6th August, 1984, the Central Board of Excise and Customs hereby appoints the officer of the Directorate of Anti-Evasion (Central Excise) specified in column (2) of the Table below as Central Excise Officers and invests them with all the powers, to be exercised by them throughout the territory of India, of an officer of the Central Excise of the rank specified in the corresponding entry in column (3) of the said Table, such powers being the powers of a Central Excise Officer conferred under the said Act.

TABLE

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 Serial   Officers of the Directorate of    Rank of the officers of No.
              Anti-Evasion (Central Excise)     Central Excise 

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1.       Director                          Collector 
2.       Deputy Director                   Deputy Collector
 3.       Assistant Director                Assistant Collector
 4.       Senior Intelligence Officer       Superintendent
 5.       Intelligence Officer              Inspector

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2. This notification shall come into force on the 1st day of April, 1986.

Sd/-

(A. K. PRASAD) UNDERSECRETARY CENTRAL BOARD OF EXCISE AND CUSTOMS"

5. The aforesaid notification appoints the officers of the Directorate of Anti- Evasion (Central Excise) as Central Excise Officers conferring on them all the powers to be exercised by them throughout the territory of India.

6. Thus it would appear that the Asstt. Director by virtue of he being a Central Excise Officer having been conferred with all the powers of a Central Excise Officer is conducting an inquiry for the purpose of the Act and as such is empowered to summon any person for giving evidence or for production of documents. The notification also makes it clear that the officers who have been appointed as Central Excise Officers, have been conferred all the powers to be exercised by them throughout the territory of India. The notification thus makes it clear that there are no territorial limitations for exercising the powers under the aforesaid notification. We fail to understand as to how the Assistant Director is acting without jurisdiction as contended by learned Counsel for the petitioner. In our opinion, the contention is unfounded. As already stated, the Asstt. Director being a Central Excise Officer duly empowered by Central Govt. under Section 14 has jurisdiction to issue summons for the purposes specified under Section 14 by virtue of the aforesaid notification. We are further of the opinion that it was not necessary for the Asstt. Director to disclose the material which necessitated holding of the inquiry in the summons. The Asstt. Director is holding a statutory inquiry and so is acting within his jurisdiction and it cannot be said that the Asstt. Director has no authority to proceed under Section 14 to issue summons for evidence and for production of documents.

7. So far as the user of the documents already produced by the petitioner in connection with the tax assessment whether sales tax or income tax or for any other need is concerned, we may state that the petitioner will have the access to the documents produced by the petitioner before the Asstt. Director. The petitioner may have the photo copies of the needed documents and the Assistant Director shall produce or cause to be produced the original documents before the Assessing Authorities as and when the Asstt. Director is called upon to do so by the Assessing Authorities.

8. Apart from that, sufficient time has already elapsed. The summons were issued on 3rd July, 1990. The proceedings were stayed by this Court on 1st February, 1991. Even before the stay of the proceedings by this Court, there was sufficient time available with the Assistant Director to complete the inquiry. We, therefore, direct the Asst. Director to complete the inquiry within a period of three months and we further direct the petitioner to co-operate with the Asstt. Director or other authorities in inquiry.

9. The writ petition is disposed of with the above observations and directions.