Commissioner Of Central Excise vs Maza Cosmetics
2006 Latest Caselaw 1389 Del

ORDER

1. The Revenue is aggrieved by an order dated 10th December, 2004 passed by the Customs, Excise and Service Tax Appellate Tribunal in Appeal No. E/2979/04-NBSC.

2. The short issue in this case is that the adjudicating Authority (Joint Commissioner) passed an order which was considered by the Commissioner of Central Excise in terms of Section 35E(2) of the Central Excise Act, 1944. After considering the legality or propriety of the adjudication order, the Commissioner gave a direction to the Deputy Commissioner to file an appeal against the adjudication order passed by the Joint Commissioner. The Deputy Commissioner filed an appeal which was taken up for consideration by the Commissioner of Central Excise (Appeals). Vide order dated 23rd March, 2004 he came to the conclusion that the Commissioner could have directed only the Joint Commissioner as the adjudicating authority to file an appeal under Section 35E(2) of the Act and could not have issued such a direction to the Deputy Commissioner. Feeling aggrieved, the Revenue preferred an appeal to the Tribunal which upheld the view taken by the Commissioner (Appeals). That is how the matter is now before us.

Section 35E(2) and Section 35E(4) of the Act read as follows:

35-E. Powers of Board or Commissioner of Central Excise to pass certain orders.

(1) XXX XXX XXX

(2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authorities subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order.

(3) xxx xxx xxx

(4) Where in pursuance of an order under Sub-section (1) or Sub-section (2) the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Commissioner (Appeals) within a period of three months from the date of communication of the order under Sub-section (1) or Sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 35B shall, so far as may be, apply to such application

3. The contention of learned Counsel for the Revenue is that in terms of Section 35E(4) the authorised officer (In this case the Deputy Commissioner) could have filed an appeal to the Commissioner (Appeals) and since he has done so on the basis of a direction given by the Commissioner, the authorities below erred in coming to the conclusion that the appeal was not competent. We are not in agreement with the learned Counsel for the Revenue since we are of the opinion that the provisions of Section 35E(2) and Section 35E(4) of the Act cater to two different stages or steps in the process. In terms of Section 35E(2) of the Act, the Commissioner can only give a direction to the adjudicating authority to file an appeal. After such a direction is given, then the provisions of Section 35E(4) of the Act will apply and the appeal may then be filed by the adjudicating authority or by any other authorised officer. That authorised officer, it appears to us will have to be authorised by the adjudicating authority after a direction given to the adjudicating authority. What has happened in the present case is that the Commissioner did not issue any direction to the adjudicating authority under Section 35E(2) of the Act; he directly authorised the Deputy Commissioner to file an appeal before the Commissioner (Appeals) and thereby completely by-passed the adjudicating authority.

4. In other words, the Commissioner straightway resorted to the second stage or took the second step without passing any order in the first stage, namely, a direction to the adjudicating authority to file an appeal. In this view of the matter, the action of the Commissioner in by-passing Section 35E(2) of the Act and straightway resorting to action under Section 35E(4) was not permissible. Under the circumstances, we are of the view that the authorities below, namely, the Commissioner (Appeals) as well as the Tribunal rightly concluded that the appeal filed by the Deputy Commissioner was not competent. We find that the Revenue has not made out any substantial question of law for our consideration.

The appeal is dismissed.