Agra Footwear Manufacturers and Exporters vs Union of India

Heard Sri. B.P. Singh Dhakray, learned Senior Advocate, assisted by Sri. Kamlendra Singh Jadaun and Sri. Krishna Agrawal for respondents.

The entire dispute arose out of letter/Circular No. 1/2013, dated 9-5-2013 issued by Sri. P.K. Katiyar, Additional Commissioner, Central Excise, Kanpur, to various authorities across the country. The language thereof shows that he has asked for initiation of necessary action against exporters of responding Commissionerate relating to Rules 91 and 92 of Central Excise Rules, 2002 (hereinafter referred to as "Rules, 2002").

Sri. B.P. Singh Dhakray, learned Counsel, urged that Additional Commissioner has no jurisdiction to issue such notification/circular and that too to higher authorities across the country and this is wholly without jurisdiction.

In this regard, petitioner earlier came to this Court in Writ Tax No. 975 of 2013, which was disposed of vide judgment and order dated 7-8-2014 [2015 (321) E.L.T. 399 (All.)] without dealing with merits of the matter directing Central Board of Excise and Customs (hereinafter referred to as ''C.B.E. and C.'') to decide representation wherein this issue relating to circular dated 9-5-2013 of Additional Commissioner was raised. CBEC was directed to pass a reasoned and speaking order. Operative part of said judgment reads as under :-

"In the light of the stand taken by the respondents, we dispose of the writ petition directing the Central Board of Excise and Customs to decide the representation of the petitioners, dated 28-5-2013 and representation dated 23-10-2013 (Annexures 3A and 4 to the writ petition), by a reasoned and speaking order within a period of four months from the date of the production of a certified copy of this order."

CBEC has passed an order dated 18-12-2014 in purported compliance of aforesaid judgment but instead of taking any decision on merit of aforesaid letter dated 9-5-2013, it has said that matter is sub-judice before quasi judicial authorities in appeal and, therefore, it is not appropriate for CBEC to issue any clarification on this matter as it would amount to interfering in pending quasi judicial proceedings.

Sri. Krishna Agrawal, learned Counsel for respondents, stated that petitioner has also filed an appeal in which this issue has been raised and matter is sub-judice before quasi judicial authority.

Be that as it may, facts remains that this Court required CBEC to answer whether Additional Commissioner, Central Excise at Kanpur, has any authority to direct superior Officers across the country to take action against various exporters.

Petitioner has challenged jurisdiction of Additional Commissioner for issue of such letter/circular.

In reply to Paragraph 18 of writ petition, in Paragraph 20 of counter-affidavit respondents have said that aforesaid letter/circular dated 9-5-2013 does not contain any direction whatsoever. It is worded like an alert since it has requested field formations to safeguard Government revenue in similar cases. It is not a notification issued by CBEC laying down guidelines, instructions, conditions and safeguards and procedure for exports without payment of duty. In other words, respondents do not dispute that an Additional Commissioner has no authority or jurisdiction to issue any direction to superior Officers across the country in any manner but may bring certain facts to the notice of authorities by communicating some facts and per se such letter is not bad.

We have gone through letter/circular dated 9-5-2013 issued by Additional Commissioner from Office of Commissioner, Customs and Central Excise, Commissionerate, Kanpur. It has disclosed a modus operandi of certain footwear manufacturers for availing All Industry Rate of Drawback on the footwear exported by them and an attempt has been made by said circular to bring aforesaid modus operandi to notice of all concerned when some activity, followed by manufacturers or exporters, who are in the ambit of Central Excise, constitutes an act to evade duty if the manner in which they operate and other illegal activities are communicated to various authorities in department, such communication cannot be said per se illegal or without jurisdiction. We have no manner of doubt that such communication of modus operandi or facts relating to functioning of such persons by itself cannot be treated to be a direction or instruction to take action in any particular manner.

In view of aforesaid facts, we clarify that letter dated 9-5-2013 sent by Additional Commissioner, Central Excise, Kanpur (Annexure 12 to the writ petition) is not a direction to superior authorities across the country but only communication of certain facts and authorities are free to proceed in any manner, in accordance with law, independently, and said circular is not binding on any such authority.

Writ petition is disposed of, accordingly.