* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 6th December, 2012
% Date of Decision: 2nd January, 2013
+ W.P. (C) 504/2010
UNION OF INDIA THROUGH COMMISSIONER
CENTRAL EXCISE COMMISSIONERATE DELHI-II ..... Petitioner
Through: Dr. Ashwani Bhardwaj and Mr.
Jitender Choudhary, Advocates.
versus
M/S. IND METAL EXTRUSIONS PVT. LTD. & ANR. ..... Respondents
Through: Mr. C. Hari Shankar with Mr. S. Sunil,
Mr. Pushkar Kumar Singh and Mr.
Jagdish N., Advocates.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
MR. JUSTICE R.V. EASWAR
R.V. EASWAR, J.
The respondent, Ind Metal Extrusions Pvt. Ltd. has raised a preliminary
objection to the maintainability of the writ petition. Since it goes to the root of the
matter, it needs to be dealt with first.
2. The matter arises under the Central Excise Act, 1944. The respondent is a
merchant-exporter and registered with the central excise authorities. It lodged rebate
claims under Rule 18 of the Central Excise Rules, 2002 in respect of excise duty
paid on goods procured from manufacturers initially for home consumption but
subsequently exported. The claim was rejected by the Assistant Commissioner
(Tech.), Central Excise, Delhi-II, who is the petitioner herein on the ground that
some of the goods were exempt from duty as they were manufactured in specified
areas, disentitling the respondent from claiming the rebate. A show-cause notice was
accordingly issued to which the respondent objected on various grounds, including
the ground that the notice had become infructuous due to the amendment made to
Rule 18 by the Finance Act, 2008. Accepting the objections, the petitioner allowed
W.P. (C) No.504/2010 Page 1 of 7
the rebate claims. An order-in-original to that effect would appear to have been
passed on 26.11.2008.
3. The order-in-original passed as above was reviewed by the Commissioner,
Central Excise, Delhi-II who took the view that it was not in order. He accordingly
directed the Assistant Commissioner (Tech.) to file appeals to the Commissioner
(Appeals), Central Excise, Delhi-II against the order-in-original under section 35E
(2) of the Act. The appeals were however rejected by the Commissioner (Appeals)
by order dated 20.01.2009, holding that the substantial benefit given to the
respondent herein cannot be taken away on the ground of procedural infractions.
This order was passed by the Commissioner (Appeals) under section 35A of the Act.
4. The Commissioner, Central Excise, Delhi-II, being dissatisfied with the
appellate order passed by the Commissioner (Appeals), directed the Asst.
Commissioner (Tech.) to file a revision application before the Central Government
in terms of Section 35EE(1A). A revision application was accordingly filed,
reiterating the same grounds on which an appeal was preferred by the petitioner
herein in the appeal filed before the Commissioner (Appeals).
5. By order dated 11.09.2009 in Office order No. 316/09-CX, the Central
Government dismissed the revision application. After a detailed examination of the
facts and the contentions and on a survey of the relevant case-law, the Central
Government, acting through the Joint Secretary to the Government of India, upheld
the order of the Commissioner (Appeals). The operative portion of the order in
revision is as under:
"From the perusal of the records, Govt. observes that the
Commissioner (Appeals) has already passed a very detailed and
reasoned order. Govt. agrees with the findings in said order and
finds no reason to interfere with the said impugned order-in-appeal.
11. In view of the above discussions & findings, Govt. observes
that the rebate was admissible in this case and accordingly Govt.
upholds the impugned orders-in-appeal and rejects the revision
application being devoid of merit."
W.P. (C) No.504/2010 Page 2 of 7
6. The present writ petition was originally filed by the Assistant Commissioner
(Tech.), who passed the order-in-original accepting the rebate claim challenging the
order passed by the Government of India in revision under section 35EE of the Act.
An amended memo of parties was later filed showing the "Union of India through
Commissioner, Central Excise Commissionerate, Delhi-II" as the petitioner and the
assessee, the Commissioner (Appeals) and the Joint Secretary (Ministry of Finance)
as respondents. We are asked to issue a writ of certiorari quashing the impugned
order and a writ of mandamus directing the Government of India to pass fresh orders
after re-adjudication.
7. The preliminary objection taken by the respondent, both in its counter-
affidavit and in the written submissions supported by oral arguments before us is that
neither the Assistant Commissioner (Tech.), Central Excise, Delhi-II nor the Union
of India can question the order passed in revision as it has been passed by the Central
Government; that no writ can be filed by a government functionary questioning the
decision of the Government itself, nor can the Union of India question its own order.
8. Section 35EE of the Act deals with "Revision by Central Government".
Under sub-section (1), any person aggrieved by an order-in-appeal passed under
section 35A which is of the nature specified in the first proviso to sub-section (1) of
section 35B, may move an application to the Central Government for annulment or
modification of such order. Sub-section (1A) inserted by Act 27 of 1999 w. e. f.
11.05.2009 confers a similar right to the Commissioner of Central Excise in case he
is of opinion that an order passed by the Commissioner (Appeals) under section 35A
is "not legal and proper". He may direct the proper officer to make an application on
his behalf to the Central Government for revision of such order. He is the real and
actual applicant before the Central Government, and the "proper officer" who is
directed to file an application for revision merely performs the ministerial function of
filing the application. No filing fee is prescribed in case the application is filed by the
Commissioner of Central Excise. Sub-section (4) of section 35EE empowers the
Central Government, of its own motion, to annul or modify any order referred to in
sub-section (1). Sub-section (5) provides for enhancement of penalty or fine by the
Central Government subject to certain conditions. Sub-section (6) makes similar
W.P. (C) No.504/2010 Page 3 of 7
provision for enhancement of duty. No appeal, either by the assessee or by the
Commissioner of Central Excise, against the order passed by the Central
Government under section 35EE to the Customs, Excise and Service Tax Appellate
Tribunal (CESTAT) has been provided by the Act. The order of the Central
Government passed in revision is thus final, subject only to judicial review under
Article 226/227 of the Constitution of India.
9. The preliminary objection seems to us to be well-taken. The order passed by
the Central Government under section 35EE cannot be challenged or questioned by a
functionary of the Central Government. The Act is a central Act. The functionaries
under the Act, such as the Assistant Commissioner, Deputy Commissioner, Joint
Commissioner, Additional Commissioner, Commissioner of Central Excise,
Commissioner (Appeals) or Chief Commissioner of Central Excise are all
functionaries under the Central Government, executing the Act. It is the Central
Government itself which acts under section 35EE as revisionary authority, dealing
with revision applications filed both by the assessee and the Commissioner of
Central Excise. Since the Central Government also has to act only through human
agency, the function is entrusted to an official of the Central Government who is of
the rank of Joint Secretary in the Ministry of Finance. He does not pass the revision
order in his individual capacity or as a functionary under the Act; his orders are those
of the central government itself. The section repeatedly refers to the "Central
Government" and not to any official or functionary thereof. The Joint Secretary acts
for the Central Government in passing the order. A perusal of the impugned order
shows that there is repeated reference to the Central Government; thus the decision is
of the Central Government itself. If this position is realised, it would appear clear
that the contention of the petitioner that the writ petition has been filed not against
the Central Government but against a decision of the Joint Secretary acting as
revisionary authority is untenable. There is finality attached to the order which
cannot be questioned by functionaries under the Act since the order is passed by the
Government Union of India itself.
10. There is no definition of "Central Government" either in section 35EE or in
any other provision of the Act. Section 3(8) of the General Clauses Act, 1897 defines
W.P. (C) No.504/2010 Page 4 of 7
"Central Government" in an inclusive manner. Clause (b) says that "in relation to
anything done or to be done after the commencement of the Constitution means the
President". Under Article 53 of the Constitution, the executive power of the Union
of India is vested in the President. It is however not possible to consider the order
passed by the Central Government under section 35EE of the Act as an executive
order in that sense; the order is passed on an application by the aggrieved party the
assessee or the Commissioner of Central Excise questioning the legality and
propriety of the order passed in appeal under section 35A, and has to be necessarily
viewed as a quasi-judicial order. The proper question to be asked is whether the fact
that the order is a quasi-judicial order can sustain the maintainability of a writ against
it by the Central Government itself.
11. The question was decided by the Nagpur Bench of the Bombay High Court in
CCE, Nagpur v Indorama Textiles Ltd., 2006 (204) E.L.T. 222 (Bom.) a decision
cited on behalf of the petitioner, where the Division Bench pointed out the
distinction between an executive or administrative order passed by the Central
Government and a quasi-judicial order passed by it; it was held that in the latter case,
the Central Government (the revisionary authority) acts as a quasi-judicial Tribunal
and so its order would be amenable to the jurisdiction under Article 226 at the
instance of the aggrieved party, be it the Central Government itself. This decision
limits itself to the nature of the order passed by the revisionary authority under
section 35EE and, with respect, does not examine the further question, necessarily to
be answered, whether the Central Government can both be the author of the decision
and also the aggrieved party. It is true and in this aspect we respectfully agree with
the Bombay High Court that the order passed under section 35EE is quasi-judicial
in nature; but in our view, whether the order is administrative or is quasi-judicial, the
basic principle is that one cannot be said to be aggrieved by one's own order and in
this view of the matter the Central Government cannot question its own order passed
under that section. This aspect, with respect, does not appear to have been examined
in the decision, though it did proceed on the basis that the order under section 35EE
is in fact and law one passed by the Central Government.
W.P. (C) No.504/2010 Page 5 of 7
12. The apprehension of the petitioner that there will be discriminatory result
because of the view taken by us, in as much as the functionaries under the Act would
be left with no judicial remedy against an erroneous order passed by the Central
Government under section 35EE while an assessee would be entitled to seek judicial
redress is, with respect, baseless. It is open to an assessee who feels aggrieved by an
order passed by the Central Government under section 35EE to strain every nerve to
challenge the same in appropriate proceedings; that is only a constitutional means of
seeking redress. But that is not true in the case of an order of the Central Government
passed under section 35EE which is sought to be challenged by the Central
Government itself i.e., the authorities executing the Act, which is a central Act.
There is an inherent impossibility or contradiction in countenancing such a view, in
addition to fostering indiscipline and chaos in the administration of the Act.
13. Counsel for the respondent is right in relying on sub-sections (5) and (6) of
section 35EE to point out that in case the Central Government suo motu decides to
issue notice to the assessee to enhance the penalty or fine or duty and after hearing
the assessee decides to drop the proceedings, no grant of any opportunity to the
Commissioner of Central Excise or any other officer executing the Act is envisaged.
This shows that if the Central Government is of the view that the order of the
Commissioner (Appeals) is legal and proper and requires no interference (by way of
enhancement of duty, fine or penalty), there is no right conferred upon the
Commissioner of Central Excise to challenge the decision to drop the proceedings. If
the Commissioner of Central Excise chooses to take the appeal route against the
order of the Commissioner (Appeals) to the CESTAT, he may lawfully pursue his
challenge right up to the Supreme Court. But if he chooses to take the revisionary
route and question the legality and propriety of the order of the Commissioner
(Appeals) before the Central Government under section 35EE, he must, if the
decision of the Central Government goes against him, accept it as final. The section
does not recognise any grievance that the Commissioner may nurse against the
decision of the Central Government. In short, the Commissioner of Central Excise
cannot claim to be more loyal than the King!
W.P. (C) No.504/2010 Page 6 of 7
14. The result of the foregoing discussion is that the preliminary objection taken
by the respondent is upheld and the writ petition is dismissed in limine with no order
as to costs. We clarify that we have not examined the merits in the view we have
taken.
(R.V. EASWAR)
JUDGE
(S. RAVINDRA BHAT)
JUDGE
JANUARY 2, 2013
hs
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