ORDER
S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Madras, dated 29-1-1988 holding that the impugned order of the Assistant Collector of Central Excise, Trivandrum, dated 28-7-1987 before him was without jurisdiction.
2. The appellant is a manufacturer of electric wires and cables and the items are classifiable under sub-headings 7612.00 and 8544.00. The appellant filed a declaration on 6-3-1986 before the authorities for availing of MODVAT credit as provided under Rule 57 of the Central Excise Rules, 1944, hereinafter referred to as ‘Rules’, in respect of the inputs procured and used in the manufacture of appellant’s final product. The Superintendent of Central Excise, Kundara, on scrutiny of the records in regard to the credits availed of by the appellant in respect of duty paid inputs such as PVC contained in P.V.C. Compound, P.V.C. Compound, Stranded steel core and PVC Compound (Master Batch), found certain irregularities and passed an order dated 24-1-1987 under Rule 57-I of the Rules directing the appellant to reverse a sum of Rs. 10,18,640.12 on the ground that wrong credit had been taken in regard to the same holding the credit was inadmissible. The appellant questioned the propriety of the said order of the Superintendent before the Assistant Collector of Central Excise, Trivandrum who on hearing the representation of the appellant, by order dated 28-7-1987 upheld the earlier order of the Superintendent referred to supra in part and directed the appellant to debit and reverse a sum of Rs. 4,44,974.20 in their R.G. 23A Pt. II in addition to a sum of Rs. 93,398.70 which the appellant had already reversed. In other words, the Assistant Collector by his order referred to above modified the order of the Superintendent of Central Excise and restricted the quantum of wrong credit taken by the appellant to the figures mentioned above. Aggrieved by this order of the Assistant Collector, the appellant preferred an appeal before the Collector of Central Excise (Appeals), Madras, who disposed of the same under the impugned order dated 29-1-1988 in which the Collector (Appeals) held that the order of the Assistant Collector modifying the earlier order of the Superintendent of Central Excise is totally without jurisdiction and is not legally valid. The Collector (Appeals) further held in the impugned order that the earlier order of the Superintendent admittedly not having been appealed against and having been allowed to become final would hold good. The present appeal is against the said order of the Collector (Appeals).
3. Shri Ramachandran, the learned Counsel for the appellant, submitted inter-alia,
(i) The original order of the Superintendent of Central Excise directing the appellant to reverse the credit in a sum of Rs. 10,18,640.12 is not a quasi-judicial order but is purely an administrative direction and it is only the order of the Assistant Collector dated 28-7-1987 referred to supra which is an order of adjudication. The reasoning of the lower appellate authority under the impugned order holding that the order of the Superintendent as an order of adjudication in exercise of quasi-judicial power is not correct in law.
(ii) Even if the order of the Superintendent is construed to be an order of adjudication under Rule 57-I of the Rules and in exercise of a quasi-judicial power; in view of the fact that a competent authority viz. the Assistant Collector of Central Excise, Trivandrum, has gone into the propriety of the same and passed a considered order dated 28-7-1987 referred to above, the later order of the Assistant Collector alone would prevail. Apart from it, the Assistant Collector being the Administrative superior to the Superintendent of Central Excise, is entitled to exercise jurisdiction over the order passed by the Superintendent of Central Excise by virtue of Section 12A of the Central Excises & Salt Act, 1944.
(iii) The original order of the Superintendent of Central Excise even otherwise under the doctrine of merger would merge with the order of adjudication passed by the Assistant Collector, and, therefore, would not survive at all for consideration by any authority nor available for the Department for execution of the same.
(iv) The Superintendent of Central Excise did not issue any Show Cause Notice at all to the appellant nor afforded the appellant on opportunity of being heard, and, therefore, exercise of quasi-judicial power by an adjudicating authority without conforming to the principles of natural justice is untenable in law and consequentially, the order of the Superintendent of Central Excise is a nullity which can be questioned before his administrative superior viz. The Assistant Collector of Central Excise.
(v) When the appellant questioned the correctness of the order of the Superintendent before the Assistant Collector of Central Excise, the Superintendent received the initial representation of the appellant and submitted the same with records to the jurisdiction of the Assistant Collector and therefore, the Assistant Collector of Central Excise, the Superintendent of Central Excise and the appellant all construed the original order of the Superintendent as only an administrative order or direction and did not construe the same to be an adjudication order in exercise of any quasi-judicial power.
(vi) The Collector of Central Excise while holding that the impugned order of the Assistant Collector of Central Excise before him is without jurisdiction, cannot go behind the same and hold that the earlier order of the Superintendent not having appealed against would hold good. Such a finding by the lower appellate authority is outside his appellate jurisdiction having regard to the issue for decision before him.
(vii) The Collector (Appeals) by upholding the validity of the order of the Superintendent while setting aside the impugned order of the Assistant Collector has virtually enhanced the quantum of duty to the detriment of the appellant without any notice as required under Section 35A (3) proviso of the Central Excises and Salt Act, 1944. The appellant by merely filing an appeal against the order of the Assistant Collector cannot be worse of than what he was.
4. Shri K.K. Bhatia, the learned S.D.R., submitted that the power exercised by the Superintendent of Central Excise in directing the appellant to reverse the credit under Rule 57-1 of the Rules is in exercise of quasi-judicial power and therefore, the order of the Superintendent is an order of adjudication appealable under the Act. Admittedly, the order of the Superintendent not having been appealed against and having been allowed to become final cannot be challenged before any authority at this distance of time. The Assistant Collector of Central Excise notwithstanding his being an administrative superior to the Superintendent of Central Excise does not have jurisdiction to sit in appeal as an appellate authority over an order of adjudication passed by the Superintendent of Central Excise in exercise of quasi-judicial power. The learned S.D.R. further urged that the Collector (Appeals) under the impugned order has very correctly highlighted this legal position and held that the impugned order of the Assistant Collector of Central Excise is totally without jurisdiction and, therefore, the original order passed by the Superintendent is valid.
5. We have carefully considered the submissions made before us. The question that arises for our consideration in the present appeal is whether the impugned order of the Collector (Appeals) holding that the order of adjudication passed by the Assistant Collector dated 28-7-87 and referred to supra is totally without jurisdiction, is correct or not and if so, consequentially, the earlier order of the Superintendent of C. Ex. referred to supra is valid as an order of adjudication. We have carefully gone through Rule 57-I which deals with recovery of credit wrongly availed of or utilised in an irregular manner.
“If the credit of duty paid on inputs has been taken wrongly, the credit so taken may be disallowed by the proper officer and the amount so disallowed shall be adjusted in the credit account or the account-current maintained by the manufacturer or if such adjustments are not possible for any reason, by cash recovery from the manufacturer of the said goods.”
In the present case, on scrutiny of the relevant records, the Superintendent of Central Excise by his order dated 24-1-1987 in exercise of his power under Rule 57-I directed the appellant to reverse the credit in a particular sum in regard to which the appellant had been found to have availed wrong credit under the MOD VAT Scheme. This power of the Superintendent is only a quasi-judicial power and by no stretch of imagination it can be construed to be a mere administrative direction. This order of the Superintendent being an order of adjudication in exercise of quasi-judicial power in terms of Rule 57-I of the rules is an appealable order under the Act before the Collector (Appeals). Unfortunately, the appellant did not prefer any appeal against this order of the Superintendent. Not having appealed against this order of the Superintendent the appellant would appear to have independently moved the Assistant Collector of Central Excise who unfortunately assumed jurisdiction of an appellate authority over the order passed by the Superintendent of Central Excise and passed an order dated 28-7-1987 referred to above. It cannot be disputed that the Assistant Collector of Central Excise is not an appellate authority over the Superintendent of Central Excise in respect of adjudication matters. The law does not confer any appellate power on the Assistant Collector over the order of adjudication passed by the Superintendent of Central Excise notwithstanding the fact that the Assistant Collector may be superior officer administratively. An appeal under Section 35 is maintainable before the Collector of Central Excise (Appeals) against the order of adjudication passed by the Superintendent of Central Excise. We, therefore hold that the Assistant Collector has no authority or competence under the Act to arrogate himself the powers of an appellate authority and sit in judgment over the order of adjudication passed by the Superintendent of Central Excise in exercise of a quasi-judicial power under Rule 57-I of the Rules, and, consequently the order passed by the Assistant Collector of Central Excise interfering with the order of Superintendent of Central Excise is ab inito void, non est in the eye of the law and totally without jurisdiction. The appellant preferred only an appeal against this order of the Assistant Collector which we have held to be incompetent and without jurisdiction and the lower appellate authority has under the impugned order highlighted this aspect of the matter and held that Superintendent who initially passed the order in regard to the MODVAT credit availed of by the appellant is a proper officer under Rule 57-I(1) of the Rules and exercised jurisdiction thereunder. The lower appellate authority has correctly held under the impugned order that the Assistant Collector can neither confirm nor annul the order passed by the officer under the provisions of Rule 57-I( 1) of the Rules. The learned Collector (Appeals) has also adverted to the power of the Assistant Collector in regard to wrong utilisation of credits under Rule 57-I(2) and held that the Assistant Collector can adjudicate matters coming within the mischief of Rule 57-I(2) for which he is the competent authority and not the Superintendent of Central Excise. Once the issue before the lower appellate authority was with reference to the propriety of the order passed by the Assistant Collector, it is certainly open to the lower appellate authority to pronounce upon the question as to whether the impugned order of the Assistant Collector before him was competent or not and legally Valid or otherwise. The plea of the learned Counsel that the Superintendent of Central Excise, the Assistant Collector and the appellant all construed the earliest order of the Superintendent of Central Excise as an administrative direction is neither here nor there and would not convert the nature of the order from that of a quasi-judicial order into one of administrative order. We are also not impressed with the plea of the learned Counsel that merely because the Superintendent of Central Excise passed an order without any notice to the appellant that would become questionable before the Assistant Collector who under the Act is not the appellate authority. If the order of Superintendent of Central Excise is violative of the principles of natural justice, the same should have been challenged in a manner known to law before the competent appellate authority but not before an officer who does not have the power of appeal against the same. No doubt we would like to note that the Superintendent has passed the order against the appellant without notice to the appellant and so if the order is not in consonance with the principles of natural justice, the same cannot be interfered with in this appeal by a statutory Tribunal which is a creature of statute and which has to perforce function within the four corners of law and cannot transcend the confines of law and grant Relief to the appellant. The remedy for the appellant in such a situation would be not before statutory Tribunal but before other competent forum only. The reference of the learned Counsel to Section 12A of the Act is not relevant in the facts and circumstances of the case. Section 12A of the Central Excises & Salt Act, 1944, says that a Central Excise Officer may exercise the powers and discharge the duties conferred or imposed under this Act on any other Central Excise Officer who is subordinate to him. There is no dispute over the proposition that a superior officer may exercise the power conferred on a subordinate officer in terms of Section 12A, but once the power of adjudication is exercised culminating in an order either for or against the party, the superior officer cannot once over exercise jurisdiction as an adjudicating authority in regard to the same and pass another order in regard to the same matter. Such a situation is not conceivable under the provisions of the Act. The plea of the learned Counsel that under the doctrine of merger, the order of the Superintendent would get merged with the order of the Assistant Collector and only the order of the Assistant Collector would survive for consideration is also without substance. Under the doctrine of merger, it is well settled that an order passed by a competent lower authority would get merged with the order passed by a competent appellate authority and in the present case the clear finding of the lower appellate authority which we have upheld under this order is that the very exercise of appellate power by the Assistant Collector over the order passed by the Superintendent of Central Excise is totally without jurisdiction. In such a situation, the question of the order passed by the lower authority merging with the order passed by the appellate authority not having jurisdiction would hardly arise. We also do not find any substance in the plea of the learned Counsel that by setting the order of the Assistant Collector and restoring the order of the Superintendent of Central Excise, the lower appellate authority has exceeded his limits and the same would result in enhancing the amount payable by the appellant which according to appellant is not permissible without notice to the appellant in terms of Section 35A(3) proviso of the Act. The lower appellate authority has not enhanced the quantum payable by the appellant under the impugned order. The lower appellate authority merely decided the issue before him as to whether the impugned order of the Assistant Collector before him was legally valid, competent and within jurisdiction, and gave a finding on consideration of the relevant materials that the order of the Assistant Collector impugned before him was without jurisdiction, incompetent and non est. In such a situation, it was indicated that consequentially it would follow that the order passed by the Superintendent in the context of the case would hold good. Therefore, the lower appellate authority has not passed any order enhancing the quantum to the detriment of the appellant and such a situation does not arise in the present appeal at all. Therefore, on consideration of the entire matter before us, we are of the view that there is no merit in the appeal and the appeal is accordingly dismissed,