COLLECTOR OF CENTRAL EXCISE, AHMEDABAD versus ORIENT FABRICS PVT. LTD.

Citation: [2003] SUPP. 6 S.C.R. 243 · Decided: 25-11-2003 · Supreme Court of India · Bench: V.N. KHARE, S.B. SINHA, AR. LAKSHMANAN · Disposal: Dismissed
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Judgment (excerpt)

COLLECTOR OF CENTRAL EXCISE, AHMEDABAD 
A 
v. 
ORIENT F AB RI CS PVT. LTD. 
NOVEMBER 25, 2003 
[V.N. KHARE, CJ., S.B. SINHA AND 
DR. AR. LAKSHMANAN, JJ.] 
Additional Duties of Excise (Goods of Special Importance) Act, 1957. 
B 
S. 3(3) (as stood prior to 1994 amendment).!-Non-payment of C 
additional duty-Penalty proceedings or forfeiture of goods-Permissibility 
of-Assessee alleged to have misdisclosed composition of goods and 
undervalued them-Revenue imposing penalty for non-payment' of duty 
and holding the goods liable to be forfeited-Tribunal holding that 
provisions of Central Excise Act so far as they relate to confiscation cannot D 
be made applicable for breach of provisions of the Act-Held, the breach 
of the provisions of the Act has not been made penal or an offence and 
no power has been given to confiscate the goods-Cause of action arose 
prior to amendment and as such the amended provision has no application 
to facts of the case-Confiscation proceedings taken against the assessee 
and the penalty imposed upon it were totally without any authority of law E 
and were rightly set aside by Tribunal. 
Mis. Khemka & Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, 
(1975) 2 sec 22, followed. 
Bairam Kumawat v. Union of India and Ors., (2003) 7 SCC 628 and 
Pioneer Silk Mills Pvt. Ltd. v. Union of India, (1995) 80 ELT 507 (Del.), 
referred to. 
F 
Commissioner of Central Excise v. Ashok Fashion Ltd., (2002) 141 G 
E.L.T. 606 (Gujarat), disapproved. 
Interpretation of Statutes : 
Provisions of statute relating to excise law-Interpretation of-Held, 
Expropriatory legislation must be strictly construed-A penal stalule must "H 
243 
I 
244 
SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R. 
A receive strict construction. 
Mis. D.L.F. Qutab Enclave Complex Educational Charitable Trust v. 
State of Haryana and Ors., AIR (2003) SC 1648, relied on. 
B 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4914 of 
1997. 
c 
D 
E 
From the Judgment and Order dated 10.2.97 of the Central Excise 
Customs and Gold (Control) Appellate Tribunal, New Delhi in F.0. No. 
237 of 1997-D. 
WITH 
C.A. No. 1576 of 1998. 
S.R. Bhat and Ms. Lalit Mohini Bhat for B.Krishna Prasad for the 
Appellant. 
P.C. Jain, Rajesh Kumar for the Respondent in C.A. No. 4914/97. 
The following Order of the Court was delivered. 
The short question that arises for our consideration in these appeals, 
which arises from the judgments and orders dated 10.2.1997 and 26.3.1996, 
as regards jurisdiction of the authorities under the Central Excise Act, 
whether it is permissible to resort to penalty proceedings or forfeiture of 
F goods for non-payment of additional duty in terms of the Additional Duties 
of Excise (Goods of Special Importance) Act, 1957 (for short 'the Act') 
by taking recourse to the provisions of the Central Excise Act and Rules 
framed thereunder. 
The respondents herein carry on business of manufacture of man 
G made fabrics. They have alleged to have misdisclosed the composition of 
certain sorts of fabrics. They were further alleged to have under valued 
goods by not paying duty on the amount realised through debit notes. The 
Collector, by his order dated 17th November, 1987, confirmed the levy of 
duty, amounting to Rs. 1,19,453,59. The Collector held that 35 bales of 
H Fabric of Sort Nos. 1200 and 1300 are liable to be confiscated, but since 
'i 
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r 
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C.C.E. v. ORIENT FABRICS PVT. LTD. 
245 
the goods had already been released, he appropriated a sum of Rs. 10,000 A · 
tow~rds the value of g·oods. He also imposed the penalty of Rs. 50,000. 
Aggrieved, the respondents prefen-ed appeals before the Central Excise and 
Gold (Control) Appellate Tribunal. 
The Tribunal relying upon the decision in the case of Pioneer St/k B 
Mills Pvt. Ltd. v. Union of India, reported in (I 995) 80 E.L.T. 507 (Del.), 
allowed the appeals, holding that the provisions of Central Excise Act and 
the Rules made thereunder, so far as they relate to confiscation cannot be 
made applicable for the breach of provisions of the Act. It is against the 
said judgment and order of the Tribunal, the appellant is in appeal before 
us. 
Mr. S.R. Bhat, learned counsel appearing for the appellant, urged that 
the view taken by the Tribunal in allowing the appeals was erroneous 
inasmuch as it is contrary to the decisions in the case of Mis. Khemka & 
c 
Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, repo1ted in [1975] 2 sec D 
22 and Commissioner of Central Excuse v. Ashok
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