Collector of Customs & Excise Cochin
& Ors Vs. A. S. Bava  INSC 163 (27 July 1967)
27/07/1967 SIKRI, S.M.
CITATION: 1968 AIR 13 1968 SCR (1) 182
CITATOR INFO :
D 1971 SC 454 (8) D 1971 SC2280 (12) D 1988
SC2010 (10) RF 1992 SC2279 (31)
Central Excise and Scat Act (1 of 1944), ss.
12 and 35--Unfettered right of appeal-Provision of s. 129, Sea Customs Act,
1878 extended to appeals under Excise Act--Obligation to deposit amount of duty
pending appeal--If provision in s. 129 one in regard to procedure relating to
appeals--Validity of extension.
Under s. 35 of the Central Excise and Salt
Act, 1944 (Excise Act) a person aggrieved by any decision or order under the
Act and rules has an unfettered right of appeal. Under s.
12 of the Act, the Central Government may
apply to appeals under the Excise Act the provisions of the Sea Customs Act,
1878 (Customs Act) dealing with the procedure relating to appeals, In exercise
of this power, the provisions of s. 129 of the Customs Act were made applicable
to Appeals under the Excise Act. The section requires an appellant to deposit,
pending the appeal, the duty or penalty imposed, and empowers the appellate
authority, in his discretion, to dispense with such deposit pending the appeal
in any particular case.
The respondent filed an appeal against the
duty imposed on him under the Excise Act and prayed for dispensation of the
deposit. The Collector, who was the appellate authority, rejected the prayer
and. when no deposit was made within the time fixed, dismissed the appeal. The
respondent filed a writ petition in the High Court which was allowed, and the
Collector, was directed to hear the appeal on merits.
The Collector appealed to this Court.
HELD: Since s. 35 of the Excise Act gave a
right of appeal and s. 129 of the Customs Act whittled down that substantive
right, s. 129 could not be regarded as "procedure relating to
appeals" within s. 12 of the Excise Act. The High Court was therefore
right in F holding that the application of s. 129 of the Customs Act to appeals
under the Excise Act was in excess of the powers conferred under s. 12 of the
Excise Act. The facts that an alternative remedy was available to the
respondent under the Excise Act, and that he invoked the dispensing power of
the appellate authority under s. 129 of the Customs Act, did not bar the
jurisdiction of the High Court to entertain the writ petition, especially when
the jurisdiction of the Collector to insist upon the deposit of duty pending
appeal was itself questioned. [84B-D; 86F-G] Hoosein Kasam Dada (India) Ltd, v.
The State of Madhya Pradesh,  S.C.R. 987. 4 S.T.C. 114, followed.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 2007 and 2008 of 1966.
Appeals by special leave from the judgment
and order dated September 28, 1965 of the Kerala High Court in O.P. Nos. 219
and 223 of 1964.
83 D.R. Prem, R. N. Sachthey and S. P. Nayar,
for the appellants (in both the appeals).
S.T. Desai and R. Gopalakrishnan, for the
respondent (in both the appeals).
The Judgment of the Court was delivered by
Sikri, J.-These appeals, by special leave, are directed against the judgment of
the High Court of Kerala allowing two petitions filed by the respondent, M/s.
A. S. Bava, under art. 226 of the Constitution. The High Court, by this
judgment, quashed two orders dated February 4, 1964, and directed the Collector
of Customs, & Central Excise, Cochin, to hear the appeals preferred by M/s.
A. S. Bava.
The relevant facts are as follows: M / s. A.
hereinafter referred to as the petitioner, is
a firm of dealers in Tobacco. By two orders of adjudication dated March 31,
1963, the Assistant Collector of Customs demanded the payment of duty under
Rule 40 of the Central Excise and Salt Rules, 1944. The petitioner filed
appeals against these orders on or about July 4, 1963, to the Collector of
Customs & Central Excise. The petitioner made a representation on October
3, 1963, requesting that it may not be required to deposit. the duty demanded
pending appeal. The Collector, by letter dated January 9, 1964, rejected the
representation and requested the petitioner to deposit the duty within 15 days
of the receipt of the letter. On the petitioner failing to deposit the amount,
the appeals were dismissed on December 4, 1964. Thereupon, as already stated,
the petitioner filed two petitions under art. 226 and the petitions having been
allowed, and the appellant having obtained special leave, the appeals are now
before us. The High Court allowed the petitions on the ground that the
notification No. 68/63 dated May 4, 1963, issued under s. 12 of the Excise and
Salt Act, 1944, hereinafter referred to as the Excise Act, declaring that s. 129
of the Customs Act, 1962, relating to matters specified therein shall be
applicable in regard to like matters in respect of the duties imposed by s. 3
of the Excise Act was in excess of the powers conferred under s. 12 of the
Excise Act. The High Court also rejected the argument of the Collector of
Customs and Central Excise that the petitioner having invoked s. 129 of the Customs
Act, 1962, in the appeals preferred by it by praying for the dispensation of
deposit, was precluded from proceeding under art. 226 of the Constitution.
The learned counsel for the appellants has
raised three points before us:
(1)The petitions under art. 226 were not
maintainable as the petitioner did not avail himself of the remedy of revision
provided by s. 36 'of the Excise Act. p(N)1SCI-7(a) 84 (2)The petitioner having
availed of the remedy under s. 12( of the Customs Act was debarred from
challenging the impugned notification, dated May 4, 1963.
(3)The impugned notification applying s. 129
of the Custom:
Act was good.
There is no force in the first point. First,
the point was no taken in the High Court. Secondly, it is settled that the
existence of a remedy by way of revision does not bar the jurisdiction of the
High Court to entertain a petition under art. 226. Moreover the petitioner had
alleged that the Collector had no jurisdiction to demand the deposit or duty
pending the appeals as the notification dated May 4, 1963, was bad insofar as
it applied s. 129 of the Customs Act. In these circumstances it was not
necessary for the petitioner to have filed revisions.
There is equally no force in the second
point. If the petitioner had not applied for dispensation of the deposit of the
duty, the appellants would have contended that the petitions under art. 226
were not maintainable. Moreover, as already stated, the petitions raised a
question of jurisdiction.
To appreciate the third point, it is
necessary to extract the relevant statutory provisions. Section 12 of the
Excise Act authorises the Central Government to apply provisions of the Sea
Customs Act, 1878, now replaced by the Customs Act, 1962, in the following
"12. The Central Government may, by
notification in the Official Gazette, declare that any of the provisions of the
Sea Customs Act, 1878, relating to the levy of an exemption from customs
duties, drawback of duty, such modifications and alterations as it may consider
necessary or desirable to adapt them to the circumstances, be applicable in
regard to like matters in respect of the duties imposed by section 3".
The relevant part of the impugned
notification dated May 4, 1963, reads as follows:
" In exercise of the powers conferred by
12 of the Central Excise & Salt Act, 1944
(1 of 1944) the Central Government declares that the provisions of Section 129
of the Customs Act, 1962, relating to matters specified herein shall be
applicable in regard to like matters in respect of the duties imposed by Sec. 3
of the first mentioned Act...." Section 129 of the Customs Act reads thus:
"129. (1) Where the decision or order
appealed against relates to any duty demanded in respect of goods 85 which are
not under the control of customs authorities or any penalty levied under this
Act, any person desirous of appealing against such decision or order shall,
pending the appeal, deposit with the proper officer the duty demanded or the penalty
Provided that where in any particular case
the appellate authority is of opinion that the deposit of duty demanded or
penalty levied will cause undue, hardship to the appellant, it may in its
discretion dispense with such deposit, either unconditionally or subject to
such conditions as it may deem fit.
(2)If upon any such appeal it is decided that
the whole or any portion of such duty or penalty was not leviable, the proper
officer shall return to the appellant such amount of duty or penalty as was not
leviable." It will be noticed that s. 129 requires an appellant to deposit
the duty or penalty levied pending an appeal. In other words, before an appeal
can be heard the appellant must deposit the duty or penalty levied. But under
s. 35 of the Excise Act, a person ,Aggrieved by any decision or order has an
unfettered right to appeal. The question that arises in these appeals is
whether the provisions of s. 129 of the Customs Act can be said to be
provisions relating to procedure...... relating to appeals' within S. 12 of the
As we have already said, the appeals are
filed under S. 35 of the Excise Act. Section 129 of the Customs Act debars the
hearing of them unless the duty or penalty is paid.
This, it seems to us, is not procedure
relating to appeals.
This Court in Hoosein Kasam Dada (India)
Ltd., v. The State of Madhya Pradesh(1) had to consider a similar provision in
s. 22 of the Central Provinces and Berar Sales Tax Act, 1947. Section 22(1), as
originally enacted, read thus:
" 22. (1) Any dealer aggrieved by an
order under this Act may, in the prescribed manner, appeal to the prescribed
authority against the order:
Provided that no appeal against an order of
assessment, with or without penalty, shall be entertained by the said authority
unless it is satisfied that such amount of tax or penalty or both as the
appellant may admit to be due from him, has been paid." (1) 987;4
S.T.C 114, 86 It was amended thus:
"22. (1) Any dealer aggrieved by an
order under this Act May, in the prescribed manner, appeal to the prescribed
authority against the order:
Provided that no appeal against an order or
assessment, with or without penalty shall be admitted by the said authority
unless such appeal is accompanied by a satisfactory proof of the payment of the
tax, with penalty, if any, in respect of which the appeal has been preferred.
S.R. Das, J., as he then was, repelled the
argument of the learned) Advocate that 'the requirement as to the deposit of
the amount of the assessed tax does not affect the right of appeal itself,
which still remains intact, but only introduces a new matter of procedure', and
"There can be no doubt that the new
requirement 'touches' the substantive right of appeal vested in the appellant.
Nor can it be overlooked that such a requirement is calculated to interfere
with or fetter, if not to impair or imperil, the substantive right.
The right that the amended section gives is
certainly less than the right which was available before. A provision which is
calculated to deprive the appellant of the unfettered right of appeal cannot be
regarded as a mere alteration in procedure. Indeed the new requirement cannot
be said merely to regulate the exercise of the appellant's preexisting right
but in truth whittles down the right itself and cannot be regarded as a mere
rule of procedure." These observations are fully applicable in the present
1 Section 35 of the Excise Act gave a right
of appeal, but S. 129 of the Customs Act whittles down the substantive right of
appeal and accordingly it cannot be regarded as "procedure relating to
appeals" within s. 12 of the Excise Act.
The appeals accordingly fail and are
dismissed with costs.
One hearing fee.
V-P-S Appeals dismissed.