Kunj Power Project (P.) Ltd. vs Commissioner, Customs, Central Excise

Heard Sri Ravi Kant, learned Senior Advocate, assisted by Sri A.B. Sinha, Advocate, for petitioner and Sri Ashok Singh, Advocate appearing for respondents. This writ petition under Article 226 of the Constitution of India has been filed challenging various orders whereby petitioners have been summoned by Central Excise authorities for the purpose of enquiry by exercising powers under Section 14 of Central Excise Act, 1944 (hereinafter referred to as "Act, 1944"). It is contended that after receiving letters from excise authorities whatever documents were demanded, they were supplied by petitioners, still they have been required to appear before the authorities concerned to participate in the enquiry and this exercise of power summoning petitioners personally is patently arbitrary. Reliance is placed on a Division Bench judgment of this Court in Dr. Lalji Singh v. National Commission 2014 (4) ADJ 41 (DB).

The facts, as borne out from record, are that petitioner-Company is engaged in the business of fabrication, erection and installation of power sub-stations having been incorporated under Companies Act, 1956 (hereinafter referred to as "Act, 1956"). It had undertaken a job work of commissioning 765 KV sub-station at Unnao and appointed one M/s. Sakshi Trade Link Private Ltd., 81/B, Diamond Harbour Road, Ground Floor, Kolkata (West Bengal) (hereinafter referred to as "STL Company") as its approved representatives for erection of the said 765 KV sub-station at Unnao, which was a project of U.P. Power Transmission Corporation (hereinafter referred to as "UPPTC"). In other words, petitioner-Company outsourced the aforesaid work of installation of substation which it had got for execution from parent Company (i.e. UPPTC). It is said that M/s. STL Company was registered with Commissioner, Central Excise and Service Tax, Service Tax Division-I, 39, Kolkata, for the purpose of Service Tax having Service Tax Code AALCS3353CST001. Petitioner claimed to have deposited service tax with STL Company for which certificate was also issued by the said Company. The amount comes to Rs. 1,15,27,245/-. Petitioner-Company simultaneously claimed CENVAT credit for the aforesaid amount.

On 16.12.2013, petitioner received notice from Commissioner, Central Excise and Service Tax, Lucknow requiring certain information to be furnished by it which are as under:

"i. The value and description of the service/goods received from M/s. Sakshi Trade Link Pvt. Ltd. by M/s. Kunj Power Projects.

ii. Copy of the documents i.e. bill/invoices on which the services/goods were procured.

iii. Details of CENVAT credit on input/input services/Capital goods availed on such documents.

iv. Details of any cases booked against M/s. Kunj Power Project Private Ltd. for any transaction with M/s. Sakshi Trade-Link Pvt. Ltd. Kolkata."

Petitioner claimed to have submitted reply vide letter dated 8.1.2014 furnishing information as required vide aforesaid letter dated 16.12.2013. Thereafter in October 2014, the Superintendent (C.P.), Central Excise and Service Tax visited petitioner''s office accompanied by officials of Central Excise Commission and made certain queries regarding transactions between petitioner and STL Company from Directors of the petitioner-Company. A notice/summon dated 21.1.2015 was issued to petitioner No. 3 by Superintendent (Preventive), Central Excise, Agra for making enquiry under Section 14 of Act, 1944 and requiring the petitioners to appear before him on 22.1.2015. A further notice was issued on 21.1.2015 stating that the petitioner had wrongly utilized CENVAT credit of Rs. 1,15,27,245/- and the said amount should be reversed. In the said notice, it was discussed for the first time that STL Company is operating on papers only and has no physical existence, therefore no services could be provided by the said company to petitioner-Company. Petitioner claims to have replied on 22.1.2015. Thereafter, petitioner received various summons/notice asking petitioner''s Directors to appear before Excise Authorities in enquiry under Section 14 of Act, 1944. These summons and notices, which have been challenged are dated 21.1.2015, 23.1.2015, 31.1.2015, 2/3.2.2015, 31.1.2015, 9.2.2015 and 18.2.2015 (Annexures 7, 11, 14, 15, 16, 17, 19 and 21 to the writ petition).

Sri Ravi Kant, learned Senior Advocate, contended that the aforesaid notices have been issued without any application of mind and despite the fact that the petitioners have cooperated with the enquiry and submitted all the document required, still petitioner''s Directors have been summoned to appears before the Central Excise authorities for the purpose of participating in enquiry. He contended that the aforesaid exercise is without any application of mind and, therefore, the impugned orders are patently illegal and placed reliance on Dr. Lalji Singh (supra) which was a case arising from the proceedings initiated by National Commission for Scheduled Castes.

Section 14 of Act, 1944 confers power upon Central Excise Officer duly empowered by Central Government in this behalf to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any enquiry which such Officer is making for any of the purposes of the Act. For ready reference, Section 14 of Act, 1944 is reproduced as under:

''Section 14. Power to summon persons to give evidence and produce documents in inquiries under this Act.- (1) Any Central Excise Officer duly empowered by the Central Government in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this Act. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.

(2) All persons so summoned shall be bound to attend, either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required:

Provided that the exemptions under Sections 132 and 133 of the Code of Civil Procedure, 1908 (5 of 1908) shall be applicable to requisitions for attendance under this section.

(3) Every such inquiry as aforesaid shall be deemed to be a "judicial proceeding" within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860 (45 of 1860).''

The custom authorities, therefore, have statutory right to examine persons and to summon them to give evidence and produce documents in connection with enquiry relating to any goods or services. In absence of any material on record, i.e., pleading with due support of the documents that the summoning for examination of persons etc. is on account of any malice, coercion, duress or undue pressure, the statutory power exercised by authorities is not to be lightly interfered in writ jurisdiction under Article 226 of the Constitution. This provision is not confined to the persons or documents within the territorial jurisdiction of concerned Officer. The purpose of summoning involves multifarious reasons which includes the inquiry into the truth of transactions in which the persons who are summoned are or may be involved or otherwise have some information etc. The mere fact that the letters sent by the Excise authorities requiring certain documents have been replied or the documents have been supplied would not entitle individuals not to be summoned for the purpose of giving evidence or otherwise examination by the Central Excise Officer.

It is not the case of learned counsel for petitioners that the aforesaid notices/summons lacks patent jurisdiction. What he, however, contends is that once the documents have been supplied, insistence on the part of authorities concerned for summoning petitioners shows non application of mind.

The submission, in our view, has no substance. Section 14 nowhere contemplates that a person, when required to furnish certain documents or information, if has done so, he cannot be summoned in person for giving his own evidence. On the contrary, this is a separate power specifically contained in Section 14.

So far as judgment in Dr. Lalji Singh (supra) is concerned, the same has no application whatsoever to the case in hand. Therein the Court considered validity of notice issued by National Commission for Scheduled Castes to the Vice-Chancellor of the Banaras Hindu University directing him to personally appear before the Commission. The Court recorded a finding that the complaint was not made in accordance with law. It was not maintainable before the Commission and, therefore, entire proceedings of Commission were without jurisdiction. In paras 47 and 48, the Court said as under:

"47. We are of the considered view that the complaint dated 5.10.2011 was made by Dr. Indu Choudhary to settle personal scores and to wriggle out of the disciplinary proceeding which was initiated against her by the University. By no stretch of imagination can such a complaint be treated as one falling within the fore-corners of Article 338 of the Constitution of India, specially, in view of the provisions of the Rule 7.4.1(e), (f) & (g) of the Rules.

The Commission entertained the complaint in a routine manner without applying its mind as to whether the same fell within its jurisdiction and whether it was in conformity with the Rules made by it or not. ..."

Again in paras 61, 69 and 77, the Court said as under:

"61. ...but the complaint was not in conformity with Rule 7.4.1(d), (g) and (h) of the Rules, thus not maintainable."

"69. The subject-matter of the aforesaid complaint was purely administrative in nature, therefore, we fail to understand as to how cognizance of the same could have been taken by the Commission in view of the provisions of Article 338 of the Constitution of India read with Rule 7.4.1(a) to (h) of the Rules framed by the Commission itself under Article 338(4) of the Constitution."

"77. The Commission is clothed with the power of summoning and enforcing the attendance of any person for a limited purpose as mentioned in Article 338 itself but by virtue of the said provision it does not become a Civil Court. It does not have the powers to adjudicate the rights of the parties nor to issue any direction or injunction on merits."''

The nature of power to be exercised by Central Excise authorities under Section 14 is different than the power which was exercised by National Commission and subject matter of discussion in Dr. Lalji Singh (supra). In our view, the aforesaid judgment lends no support to the petitioners. The mere order of summoning for giving evidence or to participate in enquiry issued by Central Excise authorities under Section 14 of Act, 1944, in our view, is not to be interfered only on the ground that it has submitted reply to earlier letters and therefore need not appear in person before the authorities concerned. When there is a specific power contained in the Act and there is nothing on record to show that it has been exercised with male fide etc., no interference at this stage is called for. The writ petition lacks merit. Dismissed.