Case: M/s. Banshi Dhar Lachhman Prasad &amp; Another Vs. Union of India &amp; Others

contention of the learned counsel. It must be remembered that the demand notice - Exhibit A - gives full particulars regarding the substitution and shortage of tobacco. The Collector had issued the notice - Exhibit I - giving full particulars of these matters and the appellants had also sent a fairly exhaustive reply to the same. Finally the order - Exhibit Q - itself is very exhaustive and sets out meticulously, in great detail, the quantity of tobacco under the head of substitution and shortage. The order refers in extenso to the various points raised in the appellants reply dated February 2, 1957 as well as the further points pressed before the Collector on the date of hearing viz., June 3, 1957 by the appellants counsel, and it is after such a fairly exhaustive consideration of the objections of the appellants, the demand notice Exhibit A and the materials on record, that the Collector passed the order Exhibit Q. In fact, as already mentioned, it is not as if the Collector merely confirmed the demand under Exhibit A in toto. On the other hand, he modified it in favour of the appellant to some extent. It is such an exhaustive order passed by the Collector - Exhibit Q - that was the subject of consideration in the first instance, by the Central Board of Revenue, in Exhibit T, and later, by the Central Government in Exhibit V. Under those circumstances, we are not inclined to accept the contention of the learned counsel for the appellant that the orders - Exhibits T and V - require to be interfered with.16. The further grievance placed before us by the learned Counsel on behalf of the appellant is that before the High Court various objections had been raised in the writ petition regarding the manner in which the inspection was done by the Deputy Superintendent and none of these matters had been considered by the High Court. To a direct question put by us, as to whether all the points referred to in para 33 of the writ petition were really argued before the High Court, the counsel quite fairly stated that he has no instructions to say that these points were as a matter of fact pressed before the High Court.17. The counsel further urged that no opportunity had been given to cross-examine the Deputy Superintendent of Central Excise nor was a copy of his report made available to the appellants. The inspection was done without the knowledge of the appellants and without notice to them and Khuda Bux was not authorised to represent them at the time the inspection was conducted by the Deputy Superintendent. We are not inclined to accept these contentions of the learned counsel. So far as we could see, the appellant had made no grievance before the Collector of Central Excise that they should be allowed to examine witnesses nor did they urge that a copy of the report of the Deputy Superintendent had not been made available to them. They did not make any request for cross-examining the Deputy Superintendent of Central Excise. In view of all these circumstances, in our opinion the High Court was justified in holding that the appellants had a proper opportunity of contesting the demand made by the department and that there had been no failure of natural justice in the proceedings conducted by the respondents.18. A further grievance was made by the learned counsel for the appellants that the order - Exhibit N - dated February 6, 1958, passed by the Collector of Central Excise, was illegal and contrary to the proviso to sub-section (1) of Section 35 of the Act. According to the learned Counsel, the Assistant Collector, by his order Exhibit M, had condoned the losses by a certain percentage in respect of five lots whereas the order of remand for a de novo adjudication passed by the Collector under Exhibit N will have the result of depriving the appellants of the favourable directions obtained by them under Exhibit N and their liability would be enhanced. That is, according to the appellants, the order of remand, Exhibit N, passed by the Collector, will have the effect of subjecting them to a greater penalty than has been adjudged under the original order of the Assistant Collector, Exhibit M. We are not inclined to accept this contention of the appellant. Section 35 deals with appeals and sub-section (1) gives a right of appeal to an aggrieved party against any decision or order passed by officers under the Act and the Rules giving power to the appellate authority that such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against, provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjudged against him in the original decision or order. The fallacy underlying the contention of the learned counsel is the assumption that the consequence of the order of the Collector will be to subject the appellants to a greater penalty for which, in our opinion, there is no basis, as is seen from Section 35.What the Collector has done in this case is to give the appellants an opportunity of satisfying if they can, the authority concerned that there was no justification for the issue of the two notices, Exhibits K and L under R. 223-A. The order does nothing more than this. If the appellants are able to satisfy, the authority properly, the result may even be that no action will be taken under Rule 223-A.19. Lastly, it was feebly urged that there was a conflict between the orders of the Collector, Exhibit Q dated March 3, 1958 and Exhibit N, dated February 6, 1958. In our opinion, there is no scope for any conflict because the two orders relate to different types of proceedings initiated against the appellants.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]14. We have very exhaustively referred to the various proceedings initiated against the appellants as well as the nature of the orders passed and as they will clearly show, in our opinion that the appellants grievancewhich will be presently dealt withe are not impressed with this contention of the learned counsel. It must be remembered that the demand noticees full particulars regarding the substitution and shortage of tobacco. The Collector had issued the noticeng full particulars of these matters and the appellants had also sent a fairly exhaustive reply to the same. Finally the orderlf is very exhaustive and sets out meticulously, in great detail, the quantity of tobacco under the head of substitution and shortage. The order refers in extenso to the various points raised in the appellants reply dated February 2, 1957 as well as the further points pressed before the Collector on the date of hearing viz., June 3, 1957 by the appellants counsel, and it is after such a fairly exhaustive consideration of the objections of the appellants, the demand notice Exhibit A and the materials on record, that the Collector passed the order Exhibit Q. In fact, as already mentioned, it is not as if the Collector merely confirmed the demand under Exhibit A in toto. On the other hand, he modified it in favour of the appellant to some extent. It is such an exhaustive order passed by the Collectorat was the subject of consideration in the first instance, by the Central Board of Revenue, in Exhibit T, and later, by the Central Government in Exhibit V. Under those circumstances, we are not inclined to accept the contention of the learned counsel for the appellant that the ordersExhibits T and Vrequire to be interferedare not inclined to accept these contentions of the learned counsel. So far as we could see, the appellant had made no grievance before the Collector of Central Excise that they should be allowed to examine witnesses nor did they urge that a copy of the report of the Deputy Superintendent had not been made available to them. They did not make any request forthe Deputy Superintendent of Central Excise. In view of all these circumstances, in our opinion the High Court was justified in holding that the appellants had a proper opportunity of contesting the demand made by the department and that there had been no failure of natural justice in the proceedings conducted by the respondents.We are not inclined to accept this contention of the appellant. Section 35 deals with appeals and(1) gives a right of appeal to an aggrieved party against any decision or order passed by officers under the Act and the Rules giving power to the appellate authority that such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against, provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjudged against him in the original decision or order. The fallacy underlying the contention of the learned counsel is the assumption that the consequence of the order of the Collector will be to subject the appellants to a greater penalty for which, in our opinion, there is no basis, as is seen from Section 35.What the Collector has done in this case is to give the appellants an opportunity of satisfying if they can, the authority concerned that there was no justification for the issue of the two notices, Exhibits K and L under R.The order does nothing more than this. If the appellants are able to satisfy, the authority properly, the result may even be that no action will be taken under RuleIn our opinion, there is no scope for any conflict because the two orders relate to different types of proceedings initiated against the appellants.