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PETITIONER: COLLECTOR OF CUSTOMS & EXCISE,COCHIN & ORS.

       Vs.

RESPONDENT: A. S. BAVA

DATE OF JUDGMENT: 27/07/1967

BENCH: SIKRI, S.M. BENCH: SIKRI, S.M. SHAH, J.C.

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)

ACT: 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.

HEADNOTE: 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

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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  Pra- desh, [1953] S.C.R. 987. 4 S.T.C. 114, followed.

JUDGMENT: 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 appel- lants (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.  S.  Bava. 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

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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 terms:               "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  Sec.               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 levied:               Provided that where in any particular case the               appellate  authority  is of opinion  that  the               deposit  of  duty demanded or  penalty  levied

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             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 byany   decision    or order has an unfettered right to appeal.  Thequestion that arises in these appeals is whether the provisions ofs. 129 of the Customs Act can be said to be provisions relating to procedure...... relating to appeals’ within S. 12 of  the Excise Act. 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) [1953]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 observed:               "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 calcu-

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             lated   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  pre-               existing 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 case. 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. 87