M/S. PAHWA CHEMICALS PVT. LTD. versus COMMISSIONER OF CENTRAL EXCISE, DELHI

Citation: [2005] 2 S.C.R. 380 · Decided: 24-02-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed
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Judgment (excerpt)

A 
MIS. PA HWA CHEMICALS PVT. LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, DELHI 
FEB RU ARY 24, 2005 
B 
[S.N. VARIA VA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.) 
Central Excise Act, 1944-Sections I IA, 2(b) & 37-Suppression of 
facts-Non-payment of duty-Proper officer to issue show-cause notice-Held, 
C the Superintendent V.iho had issued the show-cause notices had jurisdiction to 
do so-Board Circulars are only administrative directions which cannot take 
away jurisdiction vested in a Central Excise Officer under the Act. 
Appellants were engaged in manufacture of Textile Printing 
Adhesives falling under Chapter Heading No. 3402 of the Central Excise 
D Tariff Act, 1985. They claimed benefit of Notification No. I of 1993 as 
amended and Notification No. 16of1997. Show-cause notices were issued 
to them alleging that they were not entitled to the benefit of the 
Notifications as they were using the logo of a foreign company. Duty and 
penalty were demanded from them for having suppressed the facts and 
for non-payment of duty. Appellants replied to the notices. However, the 
E Deputy Commissioner confirmed the demand of Rs. 26,74;875.75 and 
imposed a penalty of Rs. 26;00,000. 
" 
I· 
In appeal to this court, the only point agitated by the appellants is 
that the Superintendent had·no jurisdiction to issue the show-cause-notices 
F and that the Deputy Commissioner had no jurisdiction to adjudicate. 
G 
H 
Dismissing the appeals, the Court 
HELD : 1. The Superintendent had jurisdiction to issue show-cause-
notice and the Deputy Commissioner had jurisdiction to adjudicate. 
(390-E) 
2. Under Section l lA of the Central Excise Act, 1944 as it stood prior 
to 14th May, 1992 whenever it was alleged that there was fraud, collusion, 
wi\lfu1 misstatment or suppression of facts, the show-cause-notices could 
only be issued by the Collector. However, with effect from 14th May, 1992 
380 
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PAHWA CHEMICALS PVT. LTD. v. C.C.E. 
381 
Section 11 A was amended and the word "Collector" was deleted, and the A 
words "Central Excise Officer" were incorporated. Thus, the Legislature 
purposely and knowingly made a change whereby it was no longer 
required that where allegations of fraud, collusion, willful misstatement 
or suppression of facts are made, a Collector should issue a show-cause 
notice or adjudicate the same. Now a Central Excise Officer also has the B 
jurisdiction. Even an Additional Commissioner or an Assistant 
Commissioner or a Deputy Commissioner or any other Officer of the 
Central Excise or any person invested by the Board with the power of the 
Central Excise Officer would be a Central Excise Officer. 
(385-F-H; 386-A, C, DJ c 
3.1. The Board has no power to issue instructions or orders contrary 
to the provisions of the Act or in derogation of the provisions of the Act. 
The Board can only issue such direction as is necessary for the purpose 
of and in furtherance of the provisions of the Act. If, therefore, the Act 
vests in the Central Excise Officers jurisdiction to issue show-cause-notices D 
and to adjudicate, the Board has no power to cut down that jurisdiction. 
However, for the purposes of better administration of levy and collection 
of duty and for purpose of classification of goods the Board may issue 
directions allocating certain types of works to certain Offices or classes 
of Officers. (389-G, H; 390-AJ 
E 
3.2. The Board Circulars dated 27th February, 1997 and 13th 
August, 1997 are nothing more than administrative directions allocating 
various types of works to various classes of Officers. These administrative 
directions cannot take away jurisdiction vested in a Central Excise Officer 
under the Act. At the highest all that can be said is Central Excise Officers, F 
as a matter of propriety, must follow the directions and only deal with 
the work which has been allotted to them by virtue of these Circulars. But 
if an Officer still issues a notice or adjudicates contrary to the Circulars 
it would not be a ground for holding that he had no jurisdiction to issue 
the show cause notice or to set aside the adjudication. (390-B, q 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2350 of2002. 
From the Judgment and Order dated 19.7.2001 of the Central Excise, 
Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. Al 
560/2001-NB(DB) in A. No. E/612 of 2001-NB(DB). 
WITH 
G 
H 
382 
SUPREME COURT REPORTS 
[2005] 2 S.C.R. 
A 
C.A. No. 406 of 2004. 
B 
A.K. Jain and Rajesh Kumar for th
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