S. N. Sapra, J. ( 1 ) IN the present suit for declaration and permanentinjunction, filed against defendants, plaintiff, M/s Somany-Pilkington s Ltd. ,has claimed the following reliefs : (A) Decree for declaration be passed in favour of plaintiff andagainst the defendants declaring that the whole proceedings, search,notice dated 27. 3. 1986, Order dated 9/12/1986, passed bydefendant no. 2 s CBEC and impugned ex-parte order dated 2 9/01/1988 are without jurisdiction, null and void, illegal, voidabinitio and a nullity and quashing the same and directing the Defendant No. 2 s Assistant Collector to finalise/approve the price-lists andfinalise the assessment according to law. (b) Permanent injunction restraining the defendants from taking anyaction in respect of or on the basis of the notice dated 27. 3. 1986 andin respect of or on the basis of impugned ex-parte order dated 2 9/01/1988 and restraining the defendants from taking any actionpursuant to or on the basis of the notice dated 27/03/1986 andimpugned exparte order dated 29/01/1988, and/or the operation of the notice and the impugned exparte order be stayed. ( 2 ) FOR better appreciation of respective contentions of the learnedcounsel for parties, it is necessary to refer to, in brief, the facts of the case. ( 3 ) PLAINTIFF is a public limited company, incorporatad under thecompanies Act, 1956, having its registered ofiice in New Delhi. Plaintiffentered into a colloboration agreement with M/s Pilkington Tiles, U. K. , forthe manufacture of glazed tiles in India. In the year 1969, plaintiff was grantedindustrial licence and in the year 1971, plaintiff obtained excise licence for themanufacture of glazed tiles, from the Government of India in a backward areain Haryana. ( 4 ) THE authorised capital of the plaintiff company is Rs. 1 Crore50 lakhs. The major shareholding is held by M/s Pilkington Tiles, U. K. andby the public in India. Shri H. L. Somany is the Chairman of the Companyand the Board of Directors consists of the Government nominated Directors,reputed advocates, industrialists and also foreigners. ( 5 ) PLAINTIFF has about 200 dealers throughout India, in almost all thestates. Plaintiff is also exporting its goods to various countries of theworld and has been earning huge foreign exchange for the Government ofindia and has received export awards. Plaintiff pays Government revenue ofcrores of rupees annually and it has followed all the laws with due care andcaution. ( 5 ) PLAINTIFF has about 200 dealers throughout India, in almost all thestates. Plaintiff is also exporting its goods to various countries of theworld and has been earning huge foreign exchange for the Government ofindia and has received export awards. Plaintiff pays Government revenue ofcrores of rupees annually and it has followed all the laws with due care andcaution. Plaintiff has a clean record since its very inception and has neverbeen found guilty of any offence. ( 6 ) FOR the determination of the price of any goods, the manufactureris required to furnish/submit a price list, thereby showing the prices of thegoods, manufactured by it, to a proper officer, as required under Rule 137cof the Central Excise Rules, 1944. (hereinafter called the Rules ). On receiptof the price list, the proper officer is required to determine/approve the pricesof the goods, so manufactured by the manufacturer, after making suchmodification, as the proper officer may consider, so as to bring the valueshown in the price list to the correct value for the purposes of assessment asprovided in Section 4 of the Central Excise and Salt Act, 1944, (hereinaftercalled the Act ). The proper officer, before approving the prices. is authorisedto make such enquiry, as he deems fit in connection with the approval of theprices of the goods. However, if the proper officer is of the opinion thatenquiry into the approval/finalisation of the prices is likely to take sometimeand/or there will be delay in approving the prices, then in that case, properofficer may, by virtue of Rule 173c read with Rule 9b of the Rules, orderthat pending the approval/finalisation of the prices, the manufacturer canclear the goods on provisional basis and also direct the manufacturer toexecute a bond for such amount and with such security, as the proper officermay deem fit. After the final approval of the prices, the proper officer shallmake a final assessment and the amount payable, shall be adjusted against theamount/duty finally assessed by the proper officer. As required under therules, it is alleged in the plaint, that plaintiff for the period 1981-82 filedthe price list for the approval of the prices with the proper officer. The pricelist was not accepted and plaintiff approached the High Court of Delhi, byway of a writ petition. As required under therules, it is alleged in the plaint, that plaintiff for the period 1981-82 filedthe price list for the approval of the prices with the proper officer. The pricelist was not accepted and plaintiff approached the High Court of Delhi, byway of a writ petition. The High Court permitted the plaintiff to clear itsproducts on provisional basis, upon plaintiff s submitting a bond under B-13supported by a bank guarantee, to the satisfaction of the Registrar of thiscourt. ( 7 ) PLAINTIFF was clearing the goods on provisional basis and was alsosubmitting the bond, supported by bank guarantee, to the satisfaction ofdefendants department and the High Court of Delhi. ( 8 ) PLAINTIFF has followed strictly all the terms of the bond and there isno dispute. Plaintiff has paid the duty, as demanded by the proper officerfrom time to time and submitted the bond along with bank guarantee. Thehuge payment has been made by plaintiff on the basis of provisional assessment, which is to be adjusted/refunded after the final approval of the pricelist/final assessment, till date. ( 9 ) TILL the filing of the suit, it is alleged, that the assessment was stillprovisional. ( 10 ) ON 13/01/1988, in the writ petition, this Court recordedthe statements of the parties and directed the plaintiff to file fresh statement/amendment in the price list, submitted by plaintiff, from time to time, with theauthorities, by 31/03/1981 along with documentary evidence. The properofficer was further directed to approve/finalise the price list within 7 weeksthereafter, after giving an opportunity to plaintiff of being heard. It wasfurther ordered that the status-quo, would be maintained in all manners. Theoriginal/provisional assessment, made by the proper officer and the showcause notice, issued by the Department stood set aside. ( 11 ) ACCORDING to plaintiff, some oral complaints were received bymr. M. K. Daga, President of plaintiff company, about Mr. M. L. Vyas. thethen Sales Executive regarding delay in delivery of goods and favour to certaindealers and giving quick supply of materials of choice goods. In the absenceof any definite material, in support of such complaints, plaintiff could notinitiate any disciplinary action against Mr. Vyas, but immediately in view ofthe complaints, he was shifted from the Sales Department to the Projectdivision of the plaintiff company, to overcome any such complaint bythe dealers. The transfer of Mr. Vyas was made on 9/11/1984. In the absenceof any definite material, in support of such complaints, plaintiff could notinitiate any disciplinary action against Mr. Vyas, but immediately in view ofthe complaints, he was shifted from the Sales Department to the Projectdivision of the plaintiff company, to overcome any such complaint bythe dealers. The transfer of Mr. Vyas was made on 9/11/1984. Before his appointment as Sales Executive, and after his transfer, no suchcomplaints were, however, received against Mr. Vyas from any one of thedealers. ( 12 ) ON 2/10/1985, when Mr. Daga, President of the plaintiffcompany, was to proceed on a foreign tour for about 10/15 days, along withhis wife, in connection with some business, one Mr. S. K. Gupta, who wasthe then Depot-in-charge of Ghaziabad, came to his residence with somepapers, indicating that Mr. Vyas was demanding and accepting certain illegalgratifications in the past, when he was in the Sales Department As Mr. Dagawas preparing himself to leave for foreign tour, he, therefore, told Mr. Guptato leave those papers on the table of the room, adjacent to the main entrance,which is the open hall, and that he would take appropriate action on hisreturn. ( 13 ) 2/10/1985 was holiday and factory was not working. Mr. Vyas had already been transferred to the project Division, so no timewas available to Mr. Daga to initiate any action. Afterwards, Mr. Dagaalong with his wife, left his residence for foreign tour, leaving those paperson the table, lying in the open room. The bed room was locked and nofamily member was residing after Mr. Daga left India. On 8/10/1985,the officers of the department of defendant no. 2 i. e. D. R. I, conductedsearch in the various offices of the plaintiff, located at various places in Indiaas well the residential premises of the Chairman and other senior officers/executives of the plaintiff company. During, these searches, no incriminatingmaterial was found. The residential premises of Mr. Daga was also searchedon the same day, in his absence. The documents, left by Mr. Gupta, on 2/10/1985, were taken into possession by the officers. In these searches,it is alleged, no material could be found by the officers, indicating eitherdirectly or indirectly any involvement of the company, in any act with theacts of Mr. Vyas. The bed room of Mr. Daga was locked and the same wassealed with the condition that the room would be searched when Mr. Dagareturned to India. In these searches,it is alleged, no material could be found by the officers, indicating eitherdirectly or indirectly any involvement of the company, in any act with theacts of Mr. Vyas. The bed room of Mr. Daga was locked and the same wassealed with the condition that the room would be searched when Mr. Dagareturned to India. ( 14 ) ON 20/10/1985, Mr. Daga returned to India and immediatelyon his return, plaintiff informed the officer of defendant No. 2 s department,about the return of Mr. Daga. Immediately, the bed room was searched andno incriminating material was found. ( 15 ) THE officers of the department of defendant No. 2, contactedvarious dealers/persons, out of 200 dealers of the plaintiff all over India,behind the book of plaintiff. Among these dealers, none stated having givenany extra money to plaintff company or to Mr Daga. Only 7 dealers, referredto in the show cause notice, out of 200 dealers made statement that they hadgiven extra money to Mr. Vyas, ex-employee of the company, on adhoc basisand that these amounts were not paid on each and every consignment. ( 16 ) PLAINTIFF has challenged the aforesaid searches, as well the statementsrecorded by the officials of Department of defendant no. 2, on the grouadthat the officers were not the proper officers for recording the statementsunder Section 14 of the Act. The other ground is that entire searches andthe proceedings, have been initiated by officers, with the malafide intentionand ulterior motives of conferring upon such officers pecuniary benefits interms of the reward scheme, which had been propounded by defendant No. 2. In order to get the benefit under the reward scheme, cases of evasion havebeen made out against plaintiff, without proper and factual justification. ( 17 ) IN the present case, according to plaintiff, advance rewards havealready been paid to the officers of the Department, implying thereby, thatthere had been a pre-determination of the case at the high level, before suchcash reward was ordered to be paid. In this view of the matter, the schemeof rewards, itself violates the Rules of law and the entire proceedings, in thepresent case, are vitiated on account of departmental bias. In this view of the matter, the schemeof rewards, itself violates the Rules of law and the entire proceedings, in thepresent case, are vitiated on account of departmental bias. ( 18 ) PLAINTIFF received a show cause notice dated 27/03/1986, fromthe Collector to the effect that M/s Somany-Pilkington s Ltd. , allegedly contravened the provisions of Rules 173-C, 173-F. J73-G read with Rule 9 (1) ofthe Rules on the following allegations : (I) they failed to submit correct price list from time to time in respectof the glazed tiles manufactured in their factory, as required underrule 173-C of the said rules; (ii) plaintiff failed to determine correct duty liabitity on the said goodscleared from their factory, as required under Rule 173-F ibid- (iii) they cleared the said goods from their factory without dischargingcorrect duty liability as required under Rule 9 (1) and rule 173-Gof the said rules. Plaintiff was required to show cause as to why the duty, amounting tors. 82,20,802. 10 (basic duty) and Rs. 4,11,040. 35 (special duty) totalrs. 86,31,847. 45, should not be demanded from them under Section 11-A ofthe Act, and further why the penalty be not imposed upon plaintiff underrulel73-Q (l) of the Rules. ( 19 ) ACCORDING to plaintiff, the aforesaid notice has been issued by thecollector, without applying his mind. Before issuing a notice, the Issuingauthority should examine the facts properly, by applying his mind, whether aprima facie case has been made out or not. In the present case. it is alleged,that the Authority had not examined the facts of the case, nor the Authorithad considered the matter, whether any prima facie case was made out or not. ( 20 ) SINCE the final assessment was yet to be made, so no noticeunder Section I I-A of the Act, could be issued. As in the plaintiff s casethe duty of excise was provisionally assessed, in accordance with the Rule 9-B so, the case fell under Section ll-A (3) (ii) (b ). The relevant dale, not havingcome into existence because of the final assessments, having nol been initiatedso the provisions of Section 11-A and the Limitations of time given threunder,were totally in-applicable to the demand in dispute. ( 21 ) AS the price list, filed by plaintiff, was still pending: final approvalas required under Rule 17. The relevant dale, not havingcome into existence because of the final assessments, having nol been initiatedso the provisions of Section 11-A and the Limitations of time given threunder,were totally in-applicable to the demand in dispute. ( 21 ) AS the price list, filed by plaintiff, was still pending: final approvalas required under Rule 17. 3 (c) of the Rules, so the Collector has no powerunder Rules 173-C to finally approve the price list and to modify the pricelist, submitted before the Assistant Collector by the assessec. The Collectoralso did not have any power under Rule 5 of the Rules to take over thatpower from the Assistant Collector of Central Excise. Hence the notice iswithout jurisdiction. ( 22 ) IT is again alleged that out of 200 dealers, only 7 dealers appearedto have paid the alleged extra payment to Mr. Vyas, as per the notice. Statements of about 62 dealers/persons were recorded by the officers. All thesestatements were recorded behind the back of plaintiff. Hence, the act ofissuing the notice is illegal, malafide and against the principles of naturaljustice and fair play. ( 23 ) AFTER the receipt of the notice, plaintiff addressed various lettersto the authority, thereby informing that large number of files and documentswere taken in possession by the Department and it was not practicallypossible for plaintiff to file reply to the show cause, unless these documentsand records were made available to plaintiff. No action was taken bythe Department on the request of plaintiff. The Department on manyoccasions, did not allow inspection of files/documents and plaintiffwasdirected to come some other day. The inspection was allowed on piecemealbasis and after a gap of about 2-3 months. ( 24 ) PLAINTIFF came to know for the first time in June, 1987, that thecase was fixed before defendant No. 1 i. e. , Director to Publication, although,plaintiff was not given any notice nor there was any gazette notification forsuch illegal transfer of the case from defendant No 2 s Collector to defendantno. 1. It is alleged that the transfer of the case is illegal, malafide and withoutjurisdiction. 1. It is alleged that the transfer of the case is illegal, malafide and withoutjurisdiction. On enquiry, it was revealed that defendant No. 1 had beenappointed on or about 9/12/1986 as the Central Excise Officer, underrule 4 of the Rules, by the Central Board of Excise and Customs and hasbeen invested with the powers of a Collector of Central Exicse, for a limitedpurpose of investigation and adjudication of such cases, as may, from timeto time, be assigned to him by the Board, throughout the territory of India. ( 25 ) THE power vested in defendant No. 1, have been challenged byplaintiff on various grounds, as mentioned in the plaint. According toplaintiff, the notification conferred on defendant No. 1, both the powers ofinvestigation adjudication. He was thus constituted both the prosecutor andthe judge of the cause. The Board, without hearing the plaintiff, transferredthe case of plaintiff from the Collector of defendant no. 2 to defendant no. 1the transfer is illegal and without jurisdiction. ( 26 ) PLAINTIFF lias not been given any proper opportunity to file replyto the show cause notice. Plaintiff had been demanding the inspection ofvarious documents and files, relating to the branch offices of the plaintiff. On 13/01/1988, this Court passed an order in the writ petition, filed byplaintiff for quashing the original^ provision assessment. In the order, it isalleged, that the original/provisional assessment, made by the Assessingauthority alongwith the show cause notice, was set aside by virtue of theorder and Fresh assessment was directed to be made. Despite this, plaintiffreceived an ex parte order dated 29/01/1988, passed by defendant no. 1in the order, plaintiff has been directed to pay forthwith an amount ofrs 86, 31, 847. 45 of Central Excise duty, as demanded in the show causenotice, under Section I I A of the Act. For the alleged offence on the part ofplaintiff for evading the payment of Centra! Excise duty, defendant no. 1imposed penalty of Rs. 80 lakhs under Rule 173 Q of the Act. In the order, itwas also stated that reply to the notice had not been filed for the reason, thatplaintiff was having a strike in the factory which according to defendant no. 1,was not a reasonable and sufficient cause for not. submitting the reply. Defendant no. 1 failed to disclose in the order and did not take into account theorder, passed on 13/01/1988. 1,was not a reasonable and sufficient cause for not. submitting the reply. Defendant no. 1 failed to disclose in the order and did not take into account theorder, passed on 13/01/1988. ( 27 ) AS no personal hearing was given by defendant no. 1, so, therewas violation of Rule 233 (a) of the Rules. Since no opportunity of hearingand/or for cross-examination has been granted to plaintiff by defendant no. 1so the order passed by him, is liable to be quashed/set aside. The wholeproceedings from the very beginning are illegal, malafide, void abinitio andnullity. Plaintiff gave notice under Section 80 of Civil Procedure Code on 5/01/1988, but no reply was received by plaintiff. ( 28 ) IN their written statement, defendants have raised preliminaryobjections, such as, that the suit, filed by plaintiff, is not maintainable, as theremedy, if any in the present matter, can be taken under the Act and the Rules-suit is liable to be dismissed for non-joinder of proper and necessary parties as Collector of Central Excise, New Delhi, who issued the show cause noticedated 27/03/1986, and the Directorate of Anti Evasion, New Delhiagainst whom various allegations have been made, have not been impleadedas defendants and that the vires of notification dated 9/12/1986was challeged in the writ petition No. 2918 of 1987 and the Division benchof this Court, vide order dated 12/10/1987, has upheld the notification. ( 29 ) OIL merits, it is alleged that the orders passed by the High Courtill the writ petition are not relevant to the facts, stated in the show causenotice dated 27/03/1986. Besides the price, approved in the earlier caseas per orders of the Court, plaintiff was recovering additional amount fromthe dealers over and above the declared price. The goods of plaintiff werebeing cleared by way of provisional assessment, in terms of the ordres passedin civil writ No. 1862 of 1982. ( 30 ) ACCORDING to defendants, the statement of Mr. M. L. Vyas and certainother documents, clearly show that plaintiff had been charging amounts fromthe dealers over and above the declared price. The alleged transfer of Mr. Vyashas got no relevance to the facts of the present case. Some dealers were contacted by the officers of the Department and in their statements, they pointedout that the amount over and above the declared price, was paid to theplaintiff company. The alleged transfer of Mr. Vyashas got no relevance to the facts of the present case. Some dealers were contacted by the officers of the Department and in their statements, they pointedout that the amount over and above the declared price, was paid to theplaintiff company. By virtue of the notification, issued from time to timeofficers of the Directorate of Revenue Intelligence, are duly empowered by thecentral Board of Excise and Customs, as Central Excise Officers, to exercisethe powers of a Central Excise officer, under the provisions of the Act and therules. As such, the officers, who conducted the searches, were duly authorisedto do so and further to record the statements under Section 14 of the Act. Scheme of reward has also been mentioned in the written statement. Asregards Rule 9 (1) of the Rules defendants haye alleged that the same hasnot been relied upon in the final order of adjudication. ( 31 ) UNDER Rule 173-C of the Rules, as assessee is required to pay theduty, so determined by him. for each consigment, but this determined dutylias to he based on the actual price, charted by the assessee. In the psesentcase, plaintiff had been charging over above the declared prices andaccordingly, plaintiff was issued show cause notice dated 27/03/1986. Defendants have also disputed the allegation that plaintiff was not chargingthe extra amount. The show cause notice was issued after examining all therelevant records. There was no non-application of mind. Similarly, theadjudication order was passed, after examining all the evidence on record. ( 32 ) THE appointment of defendant No. 1 by the Central Board ofexcise and Customs, was made in exercise of the powers under Clause (b) ofsection 2 of the Act and he was vested with the power of the Collector ofcentral Excise. These powers were to be exercised by defendant no. 1 throughout the territory of India for the purpose of investigation and adjudicationof such cases, as may from time to time, be assigned to him. The Board wasfully competent to transfer the case from the Collector of Excise to thedirector of Publications. Plaintiff was given reasonable opportunity to filereply to the show couse. Notice was issued on 27/03/1986 and adjudication order was passed on 29/01/1988. During the intervening period ofabout 21 months, plaintiff was given innumerable opportunities for filing replyand for appearing in the person befor the Authority. Plaintiff was given reasonable opportunity to filereply to the show couse. Notice was issued on 27/03/1986 and adjudication order was passed on 29/01/1988. During the intervening period ofabout 21 months, plaintiff was given innumerable opportunities for filing replyand for appearing in the person befor the Authority. In spite of that, plaintiffcontinued to delay the proceedings on one pretext or the other. Number ofopportunities were given to plaintiff for inspection of documents, starting from 30/04/1986, but plaintiff completed the inspection only on 16/08/1987. The order dated 13/01/1988, passed by the Court, has no bearing on thefacts of the present case. Defendants have also denied that any notice undersection 80 of Civil Procedure Code has been received by defendant no. 1. ( 33 ) PLAINTIFF filed replication, thereby reiterating the facts, as allegedin the plaint. Plaintiff has denied that one of the dealers, stated that he usedto pay the additional amount to the company. Statements of the dealers, whoallegedly paid the extra amount to the company, had not been referred to orfiled along with the show cause notice. The name of said dealer has not so farbeen disclosed. It has been further alleged that the statements of M/s. Hindustan Trading Co. M/s Bir Sein Anand and Co. and M/s Gaylord Stores andagencies had not been admittedly recorded by the Department. ( 34 ) ON the pleadings of the parties, following issues were framed : 1. Whether the suit is maintainable because of the provisions ofthe Central Excise and Salt Act, 1944, and the Rules framedthere under ? OPP2. Whether the suit is bad for non-joinder of necessary and properparties, namely, Collector of Central Excise, New Delhi anddirectorate of Anti-Evasion. New Delhi ? OPD3. Whether the show cause notice dated 27/03/1986 and theorder dated 29/01/1988. are liable to be set aside on thegrounds, as mentioned in the plaint ? OPP4. Relief. ( 35 ) BEFORE coming to the issues, it is necessary to refer to the objection, taken by defendants, with regard to the notice under Section 80 of Civilprocedure Code. In para 70 of the plaint, plaintiff alleged that a notice dated 5/01/1988, under Section 80 Civil Procedure Code was given, but no reply wasreceived from defendants. ( 36 ) IN reply, defendants alleged that no such notice was received bydefendant no. 1. In other words, service of notice on defendant no. 2. hasnot been denied. In para 70 of the plaint, plaintiff alleged that a notice dated 5/01/1988, under Section 80 Civil Procedure Code was given, but no reply wasreceived from defendants. ( 36 ) IN reply, defendants alleged that no such notice was received bydefendant no. 1. In other words, service of notice on defendant no. 2. hasnot been denied. ( 37 ) IN fact, there was no serious contest to this, so, no issue wasframed on this point. ( 38 ) PLAINTIFF filed an affidavit to the effect that notice under Section 80of Civil Procedure Code was also served upon defendant No. 1. No doubt,that the notice dated 5/01/1988 was given, prior to the order dated 29/01/1988. It is not necessary to go into details, because along withplaint, plaintiff filed an application, being I. A. No. 1552 of 1988, under Section 80 (2) of Civil Procedure Code, thereby seeking leave of this Court toinstitute the suit, without serving notice Section 80, Civil Procedure Code Notice was issuedto defendants. No reply was filed. As already stated, there was serious contestunder these circumstances, the application, thereby seeking leave to institutethe suit without notice stands allowed. Even otherwise, plaintiff has filed thecopy of the notice dated 5/01/1988, though it is prior to the orderdated 29,1988. ( 39 ) AT the time of framing the issues on 13/07/1988, learned counselfor parties agreed that the evidence could be led by means of affidavits, asthe questions involved therein, were substantially the legal questions and thatthe suit could be disposed off accordingly. ( 40 ) ACCORDINGLY, parties have filed affidavits by way of evidence. ( 41 ) PRIOR to the framing of issues, both the parties filed variousdocuments. The documents, filed by plaintiff, are Exhibits P. 1 to P. 58. Thedocuments, filed by defendants prior to the framing of issues, are Exhibitsd. 1 to D. 41. ( 42 ) ALONG with affidavits, filed by way of evidence, parties have alsofiled various documents. Issue No. 1 "whether the suit is maintainable because of the provisions of thecentral Excise and Salt Act, 1944, and the Rules framed thereunder ?" ( 43 ) MR. R. K. Anand, learned counsel for plaintiff, urged that thepresent suit is maintainable, because all the proceedings, beginning fromsearch, show cause notice and the order dated 29/01/1988, are withoutjurisdiction, illegal, malafide, void ab initio and nullity. R. K. Anand, learned counsel for plaintiff, urged that thepresent suit is maintainable, because all the proceedings, beginning fromsearch, show cause notice and the order dated 29/01/1988, are withoutjurisdiction, illegal, malafide, void ab initio and nullity. If any action is takenor order is passed without an authority of law, then, the same can be challenged, either by way of a suit or by means of a petition under Article 226 of theconstitution of India. He has placed reliance upon the judgments in casesh. C. Barbara Singh v. The Punjab State, P. L. R. 1967 page 179; Dhulabhaietc. v. State of Madhya Pradesh and another, A. I. R. 1969 S. C. 78; The Siemensengineering and Manufacturing Co. of India Ltd. v. The Union of India andanother, A. I. R. 1976 S. C. 1785; Scientific Instruments Co. Ltd. v. Collector of Customs and Another, 1980 (6) E. L. T. 89 (Calcutta); Gwalior Rayon Mfg (WVG) Co. v. Union of India and Ors, 1982 (10 E. L. T. 844 (M. P.) and Unionof India v. Tarachand Gupta and Bros. 1983 (13) E. L. T. 1456 (S. C.) ( 44 ) MR. Sat pal, learned counsel for defendants, on the other hand,urged that this Court has no jurisdiction to go into the various allegations, asexcise and Salt Act, 1944, is a complete code and all the remedies aremade by plaintiff in the suit. The Centralavailable under the Act to an aggrieved party. There was no lack of jurisdiction on the part of any of theauthorities, while initiating the action against defendants. Under Section 35,an appeal can be filed to the Collector (Appeals ). Under Section 35 (B),appeals can be filed before the Appellate Tribunal. Mr. Sat Pal has furthercontended that in case of non application of mind, on the part of anauthority or lack of jurisdiction, then, the same can be challenged by wayof writ petition, under Article 226 of the Constitution of India. ( 45 ) HE has placed reliance upon judgments in cases Dhulabhai etc. v. State of Madhya Pradesh and another, A. I. R. 1969 S. C. 78 and Madrasrubber Factory Ltd. Madras v. Union of India and another, 1981 (8) E. L. T. 879 (Delhi ). ( 45 ) HE has placed reliance upon judgments in cases Dhulabhai etc. v. State of Madhya Pradesh and another, A. I. R. 1969 S. C. 78 and Madrasrubber Factory Ltd. Madras v. Union of India and another, 1981 (8) E. L. T. 879 (Delhi ). ( 46 ) IN H. C. Barbara Singh (supra), it was held : "i may also mention that on the finding of the learned Subordinatejudge that the proper remedy of the plaintiff was to move this Courtunder Article 226 of the Constitution of India, the conclusion that thesuit was not competent is not justified. It seems, the learnedsubordinate Judge is not aware that the scope of the proceedings underarticle 226 of the Constitution and by a regular suit does not differ. Proceedings under Article 226 of the Constitution are proceedings byway of an alternative remedy which is more efficacious than theordinary remedy of a suit. In both civil rights are enforced or theirprotection is sought. In fact, they are remedies in the alternative withthis difference only that the remedy under Article 226 by way of awrit is discretionary whereas that is not the case in a suit. " ( 47 ) IN Dhulabhai etc. (supra), the Supreme Court laid down the following principles regarding the exclusion of jurisdiction of civil court : " (1) Where the statute gives a finality to the orders of the specialtribunals the civil courts jurisdiction must be held to be excluded ifthere is adequate remedy to do what the civil court would normally doin a suit. Such provision, however, does not exclude those cases wherethe provisions of the particular Act have not been complied with orthe statutory tribunal has not acted in conformity with the fundamentalprinciples of judicial procedure. (2) Where there is an express bar of the jurisdiction of the court,an examination of the scheme of the particular Act to find theadequacy or the sufficiency of the remedies provided may be relevantbut is not decisive to sustain the jurisdiction of the civil court. Wherethere is no express exclusion the examination of the remedies and thescheme of the particular Act to find out the intendment becomesnecessary and the result of the inquiry may be decisive. Wherethere is no express exclusion the examination of the remedies and thescheme of the particular Act to find out the intendment becomesnecessary and the result of the inquiry may be decisive. In the lattercase it is necessary to see if the statute creates a special right or aliability and provides for the determination of the right or liability andfurther lays down that all questions about the said right and liabilityshall be determined by the tribunals so constituted, and whetherremedies normally associated with actions in civil courts are prescribedby the said statute or not. (3) Challenge to the provisions of the particular Act as ultra virescannot be brought before Tribunals constituted under the Act. Eventhe High Court cannot go into that question on a revision or referencefrom the decision of the Tribunals. (4) When a provision is already declared unconstitutional or theconstitutionality of any provision is to be challenged, a suit is open. Awrit of certiorari may include a direction for refund if the claim isclearly within the time prescribed by the Limitation Act but it is not acompulsory remedy to replace a suit. (5) Where the particular Act contains no machinery for refund oftax collected in excess of constitutional limits or illegally collected, asuit lies. (6) Questions of the correctness of the assessment apart fromits constitutionality are for the decision of. the authorities and a civilsuit does not lie if the orders of the authorities are declared to be finalor there is an express prohibition in the particular Act. In either casethe scheme of the particular Act must be examined because it is arelevant enquiry. (7) An exclusion of jurisdiction of the Civil Court is not readilyto be inferred unless the conditions above set down apply. "on the facts and circumstances of the case, it was held that the suit was notbarred. ( 48 ) IN Scientific Instruments Co. Ltd. (supra), the Calcutta High Courtheld that if an order is clearly bad for lack of proper jurisdiction, or theorder is erroneous in law and the error is apparent on the face of the order,petitioner is justified in invoking the jurisdiction of the High Court underarticle 226 of the Constitution, without filing any appeal against the order. ( 49 ) IN Gwalior Rayon Mfg. ( WVG) Co. (supra ). ( 49 ) IN Gwalior Rayon Mfg. ( WVG) Co. (supra ). The Division Bench ofmadhya Pradesh High Court was considering various Rules under the Rules,particular, Rule 173c, 173q and the show cause notice, issued under Section 11 A of the Act. It was held that the initiation of the penalty proceedingsagainst the petitioner, under Rule 173q (l) (d) read with Rule 173q (2) of thecentral Excise Rules, 1944, was in excess of authority and to that extentalone, the show cause notice was quashed. ( 50 ) IN Madras Rubber Factory Ltd. , Madras, (supra) this Court hasheld as under : "issue No. 2. Now turning to the question whether the Customsact bars the suit which is the subject matter of the second issue, I maystate that reliance has been placed on the judgment of the Supremecourt in Union of India v. A. V. Narasimhalu, (1970) 2 S. C. R. 145, inwhich it was held that an erroneous decision of the Customs authoritiescannot be said to be without jurisdiction merely because it may beshown to be wrong. It was observed : "normally an action of an administrative authority interferingwith the right to property may be challenged by resort to a civil court. Yet in the case of a right which depends upon a statute, the jurisdiction of the civil court to grant relief may by express provision or byclear implication of the statute be excluded. Where a statute re-enactsa right or a liability existing at common law. and the statute providesa special form of remedy, exclusion of the jurisdiction of the civil courtto grant relief in the absence of an express provision, will not be readilyinterred. Where, however a statute creates a new right or liability andit provides a complete machinery for obtaining redress againsterroneous exercise of authority, jurisdiction of the civil court to grantrelief is barred. Liability to pay a duty of customs is not a commonlaw liability; it arises by virtue of the Sea Customs Act in respect ofany grievance arising in consequence of enforcement of that liabilitymachinery has been provided by the Act. Having regard to thecomplicated nature of the questions which arise in the determinationof liability to pay duty of customs the Legislature has invested thepower of determining liability and the manner of enforcement thereofupon a specially authorised hierarchy of tribunals. Having regard to thecomplicated nature of the questions which arise in the determinationof liability to pay duty of customs the Legislature has invested thepower of determining liability and the manner of enforcement thereofupon a specially authorised hierarchy of tribunals. An appeal liesagainst the order of the Assistant Collector of Customs against an orderimposing duty as well as an order refusing to refund duty, and thegrievance may be carried to the Central Board of Revenue. In ourjudgment, the jurisdiction of the civil court is by clear implication ofthe statement excluded. "there is then a further observation that in certain cases a civil suitwill lie, but that is when the provisions of the statute have not beenacted upon or the authority has acted in violation of the fundamentalprinciples or judicial procedure etc. That no doubt is not the case inthe present case. I would, therefore, come to the conclusion that thepresent suit is not maintainable unless it is shown that there has been abreach of the procedure prescribed by the Customs Act, 1962. It is notsufficient to say that the order imposing excessive customs duty waswrong. I would accordingly decide the second issue in favour of thedefendants. " ( 51 ) IN Union of India v. Tw-achmul (supra), the Supreme Court wasconsidering the question regarding the jurisdiction of civil courts, in Lxciseand Customs matters. It was held :"the principle thus is that exclusio i of the jurisdiction of thecivil Courts is not to be readily inl n'ed. Such exclusion, however,is inferred where the statute gives duality to the order of thetribunal on which it confers jurisdiction and provides for adequateremedy to do what the Courts w. ould normally do in such aproceeding before it. Even where a statute g ives finality, such a provi-sion does not exclude cases where the provisions of the particularstatute have not been complied with or the tribunal has not acted inconformity with the fundamental principles of judicial procedure. Theword "jurisdiction has botli a narrow and a wider meaning. In thesense of the former, it means the authority to embark upon an enquiry;in the sense of the latter it is used in several aspects, one of such as-pects being that the decision of the tribunal is in non-compliance withthe provisions of the Act. Theword "jurisdiction has botli a narrow and a wider meaning. In thesense of the former, it means the authority to embark upon an enquiry;in the sense of the latter it is used in several aspects, one of such as-pects being that the decision of the tribunal is in non-compliance withthe provisions of the Act. Accordingly, a determination by a tribunalof a question other than the one which the statute directs it to decidewould be a decision not under the provisions of the Act, and therefore,in excess of its jurisdiction. " ( 52 ) FROM the aforesaid judgments, it is thus concluded that this Courthas no jurisdiction to go into the merits of the case. If an Authority or thetribunal, acts within the ambit of its jurisdiction und in exercising such poweror jurisdiction, an error of judgment is committed or wrong order is passed,then, same can not be challenged by way of a suit. In that case, the onlyremedy available to an aggrieved party is to challenge that order or action,in accordance with a particular statute. ( 53 ) WITH regard to the order dated 29/01/1988, allegations havebeen made that plaintff was given a piecemeal inspection of the documents,reasonable opportunity was not given to plaintiff to inspect the records andcopies of all the documents were not supplied to plaintiff to enable it to filereply to the show cause notice. It is further alleged that the reasonableopportunity of being heard was not granted to plaintiff and that the order wasex parte. Defendant No. 1 failed to consider the order dated 13/01/1988,passed by the High Court of Delhi and the reply filed by plaintiff. In myview, the order can not be challenged on these allegations by way of a suit. ( 54 ) HOWEVER, the jurisdiction of the civil court, is not excluded inthose cases where the provisions of the particular Act have not been compliedwith, or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure. If the Authority or Tribunal actswithout jurisdiction, or the order is clearly bad for lack of proper jurisdiction,then, the same can be challenged, either by invoking the jurisdiction of thehigh Court, under Article 226 of the Constitution or by filing a suit, eventhough, the alternate remedy of filing an appeal is provided under a Specialact. ( 55 ) IN the plaint, plaintiff has alleged that (. ( 55 ) IN the plaint, plaintiff has alleged that (. he show cause notice andthe impugned order are without jurisdiction, illegal, malafide, void abinitioand nullity. However, I am not deciding this issue on the mere allegations,having been made by plaintiff in the plaint. In view of my decision, which Iam going to give on the show cause notice, I hold that the present suit ismaintainable. ( 56 ) ISSUE No. 1 is thus decided in favour of plaintiff. Issue No. 2"whether the suit is bad for non-joinder of necessary and properparties, namely, Collector of Central Excise, New Delhi and Directorateor Anti-Evasion, New Delhi ?" ( 57 ) MR. Sat Pal, learned counsel for defendants, has urged that as theshow cause notice dated 27/03/1986, has been challenged by plaintiff,so, the Authority, which issued this notice, is a necessary party and ought tohave been impleaded. Notice to show cause was issued by Collector ofcentral Excise, New Delhi. ( 58 ) MR. Sat Pal lias Further contended that various allegations havebeen made against Directorate of Anti-Evasion, New Delhi. This Directoratealso ought to have been impleaded. Suit is thus had lor non-joinder of parties. ( 59 ) IN the present suit, plaintiff has impleaded Shri B. P. Verma, asdefendant No. 1, who is Director of publications. New Delhi. Defendantno. 1 has passed the order dated 29/01/1988. Vide order dated 9/12/1986, defendant no. 1 was appointed as a Central Excise Officerand was further invested with the power of Collector of Central Excise for thepurpose of investigation and adjudication of such cases, as may, from timeto time, were assigned to him by Central Board of Excise and Customs,throughout the territory of India. In pursuance thereof, the case of plaintiffwas transferred to defendant no. 1. No doubt, the show cause notice wasgiven by Collector of Central Excise, New Delhi. But, I am of the view thatcollector, Central Excise. New Delhi, is not a necessary party, who ought tohave been joined. Nor it is a proper party, because his presence before thecourt is not necessary to enable it to effectually and completely adjudicateupon all the questions, involved in the suit. ( 60 ) MOREOVER, Collector, Central Excise. New Delhi, is an officer inthe Department, which is under the Ministry of Finance, Government ofindia, New Delhi. Union of India has been impleaded as defendant no. 2. ( 60 ) MOREOVER, Collector, Central Excise. New Delhi, is an officer inthe Department, which is under the Ministry of Finance, Government ofindia, New Delhi. Union of India has been impleaded as defendant no. 2. So, I am of the view that Collector, Central Excise, New Delhi, is not anecessary party. For the same reasons, Directorate of Anti Evasion, Newdelhi is also not a necessary party. . ( 61 ) ISSUE no. 2 is decided against the defendants,issue No. 3"whether the show cause notice dated 27/03/1986 and the orderdated 29/01/1988 are liable to be set aside on the grounds, asmentioned in the plaint? ( 62 ) IN the first place, Mr. Anand has raised the following threegrounds of challenge, to the entire proceedings of defendants, including thesearch, show cause notice and the Order 'dated 29/01/1988 : (I) Defendant No. 2 has propounded a reward scheme, for theofficials of the Central Excise Departments. Mr. Anand has urgedthat in order to get the benefits under the scheme, cases ofevasion were sought to be made out against plaintiff, withoutproper and factual justification. Under the scheme, a rewardupto 20 per cent of the duty and penalty levied and realised, ispayable to the officials. Out of this amount, a reward to the tuneof 25 per cent of the expected final reward, can be paid as soonas the show cause notice is issued and even before the explanationof the assessee. In the present case, advance reward has alreadybeen paid to the officers of the defendant no. 2, thereby implying,the pre-determination of the case at the high level. The scheme ofreward itself violates the Rule of law and the proceedings in thepresent case are vitiated on account of departmental bias. (ii) The Central Board of Excise and Customs could not invest in thedirector of Publications, the power of a Collector of Centralexcise, for the purposes of Section 11 A of the Act. Director of Publications, defendant no. 1, is not a Collectorof Central Excise. The notification purport to have been issuedunder the power conferred by Section 2 (b) of the Act read withrule 4 of the Rules. "the contention is that where the power isconferred on a named officer by the Act, nowhere do the Rulesauthorise such a power, being transferred to end conferred uponany other Authority or officer. The adjudication embarked uponby defendant No. 1 is without jurisdiction. "the contention is that where the power isconferred on a named officer by the Act, nowhere do the Rulesauthorise such a power, being transferred to end conferred uponany other Authority or officer. The adjudication embarked uponby defendant No. 1 is without jurisdiction. (iii) The unilateral order, without notice to plaintiff, of the Centralboard of Excise and Customs, thereby transferring the case ofplaintiff, from the Collector of Central Excise, New Delhi todefendant no. 1, was illegal, without jurisdiction and against theprinciples of natural justice and fair play. ( 63 ) SIMILAR grounds of challenge were raised in C. W. P. No. 1039 of1987, Duncans Argo Industries Ltd. v. Union of India and Others. By judgmentdated 12/08/1988, the Division Bench of this Court, comprisings. S. Chadha, J. and myself, repelled all the aforesaid contentions. For thisreason, the aforesaid grounds of challenge have no force. ( 64 ) THE next contention of Mr. Anand is that Section 11a of theact, could not be invoked, as the final assessment was yet to be made. As thegoods were being cleared on the provisional assessment basis, so the Collectorhad no jurisdiction to issue a show cause notice, under Section 11 A of theact. The scope under Section IIA of the Act is very limited. This, in factis a review of the assessment, already made final. Levy is complete only whenthere is a final assessment. When the final assessment is made, only then itcan be known as to what is the short levy. In other words, the provisions ofsection IIA cannot be invoked in those cases, where duties are paid underprovisional assessment, made under Rule 9 (b) of the Rules, without firstfinalising the assessment. Provisional assessment is not an assessment at all,but is merely a provision for payment of some amount by way of centralexcise duty, pending the determination of the assessable value, after takinginto consideration all the elements, including additions and deductions. Hence,according to Mr. Anand, there cannot be any levy or non-payment or shortlevy or short payment of central excise duty, unless there is a final determination of the assessment value. Section IIA applies to reopening of theassessment for recovery of the duty, which has escaped assessment. ( 65 ) MR. Anand has placed reliance on the judgments in casesghanshyam Dags v. Regional Assistant Commissioner of Sales Tax, A. I. R. 1964s. Section IIA applies to reopening of theassessment for recovery of the duty, which has escaped assessment. ( 65 ) MR. Anand has placed reliance on the judgments in casesghanshyam Dags v. Regional Assistant Commissioner of Sales Tax, A. I. R. 1964s. C. 766, Binny Ltd. , Madras v. Superintendent, Central Excise, Guindy andothers, 1979 (4) E. L. T. 65, International Computers Indian Manufacturers Ltd. and another v. Union of India and others, 1981 (8) E. L. T. 632, and Andhrare-Rolling Works, Hyderabad v. Union of India and others, A. I. R. 1986s. C. 1964. Mr. R. K. Anand has further urged that the cause of action forinvoking Section 11a of the Act, accrues only from the relevant date, asdefined under Section 11 A, which in case of provisional assessment meansthe date of adjustment of duty after final assessment under Rule 9b. ( 66 ) ALL these submissions were considered at length by the Divisionbench in Duncans Agro Industries, Ltd. , v. Union of India, C. W. 1708 of 1987. It is however not disputed that the goods were cleared on the basis ofprovisional assessment. The final assessment was. made after the filing of thesuit and on 8/08/1988. In that case, the Division Bench left manycontentions for investigation, entered into by the Authority under the Act. However, it was. held that there was no inherent lack of jurisdiction on theallegations. It was further held :"there is also no merit in the submission that the cause of actionfor invoking Section lla of the Act would accrue only on the'relevant date' defined under Section lla which in case of provisionalassessment means the date of adjustment of duty after final assessmentunder Rule 9b. Section II-A was inserted by Section 21 of the Amendment Act No. 25. of 1978 with effect from 17/11/1980. It isin substitution of Rule I Oof the Rules which was omitted with effectfrom 17/11/1980. Rules 10 and 10-A (operative prior to 6/08/1977) also provided for recovery of duties and charges shortlevied or erroneously refunded. The period of issue of show causenotice was only three months and it could be issued by the Assistantcollector, Central Excise. Rule 10 which was operative from 6/08/197 7/11/1980 provided a period of six months and theshow cause notice could be issued by the proper officer. The period of issue of show causenotice was only three months and it could be issued by the Assistantcollector, Central Excise. Rule 10 which was operative from 6/08/197 7/11/1980 provided a period of six months and theshow cause notice could be issued by the proper officer. It was alsoprovided that in cases where any duty had not been paid by reasonof fraud, collusion or any wilful mis-statement or suppression of factsby such person or erroneously refunded etc. the period was five yearsinstead of six months. Section 11-A was inserted by Amendment Actno. 25 of 1978 and came into force on the appointed date i. e. November 17,1980. Further amendments were made in 1985. Bysection 3 of the Amendment Act of 1985, the words "as if" for thewords "central Excise Officer" the words Collector of Central Excise"were substituted in the proviso to Section JI-A (I) after the words"as if". In sub-section (2) of Section I I-A for the words "theassistant Collector of Central Excise" the words "the Assistantcollector for Central Excise or, as the case may be. the Collectorof Central Excise" were substituted. Prior to the amendment of 1985the institution of the proceedings by issue of show casue notice couldbe by any Central Excise Officer but the determination had to be bythe Assistant Collector of Central Excise. The result of the amendmentis that the excise duty short levied or short paid or erroneouslyrefunded by reason of fraud, collusion or any wilful mis-statement orsuppression of facts or contravention of any of the provisions of theact or the Rules with intent to evade payment of duty could be thesubject matter of proceedings for levy and collection. These provisionsshow that Rule 10 and IO-A as originally enacted did not create aright to levy the excise duty. It merely laid down a rule of limitationthe statute of limitation assumes the existence of a cause of actionand does not define it or create one (see "r. C. Jail v. Union of India"a. I. R. 1962 S. C. 1281 ). The intention of the law of limitation is, not togive a right where there is none, but to interpose a bar after a certainperiod to enforce an existing right (See "-lfari Nath Chatterjee vmothur Mohan Goswami", I. L. R. 20 Calcutta 8 (PC ). The intention of the law of limitation is, not togive a right where there is none, but to interpose a bar after a certainperiod to enforce an existing right (See "-lfari Nath Chatterjee vmothur Mohan Goswami", I. L. R. 20 Calcutta 8 (PC ). The cause ofaction for invoking the provisions of Section lla is the fraudulentevasion of excise duty and not right a created by any provision relatingto limitation". Hence the arguments, advanced by Mr. Anand, have no force. ( 67 ) THE next contention on Mr. Anand is, that the show cause noticedated March 27, 1986, is illegal, malafide, against the principles of naturaljustice and fair play and without jurisdiction. There was total non-applicationof mind on the part of the Collector of Central Excise, in issuing the notice, as there was no ni;. ii. ei-ial before him to suggest any involvement ofthe plaintiff cumpany in receiving the extra amount from any of the dealers. if any extra amount was received that was received illegally, exclusivelyby Mr. Vyas and that too without the knowledge of the plaintiff companyor its Chairman, Directors/president. ( 68 ) IN the show cause notice dated 27/03/1986, it is alleged thatthe Company had contravened the provisions of Rules 173c 173f and173g read with Rule 9 (1) of the Rules on the grounds that the Companyfailed to submit correct price list from time to time, in respect of the glazedtiles; further failed to determine the correct duty liability on the goods andcleared the goods from the factory, without discharging correct duty liability. ( 69 ) RULES 173c. 173f and 173g read as under :"rule 173c. Assessee to file price list of goods assessable ad valorem (1) Every assessee, produces, manufactures or werehouse goodswhich are chargeable with duty at a rate dependent on the value ofthe goods, shall file with the proper officer a price-list, in such formand in such manner and at such intervals as the Collector may requireshowing the price of each of such goods and the trade discount ifany, allowed in respect there of to the buyers along with such otherparticulars as the Central Board of Excise and Customs or thecollector may specify. (2) Prior approval by the proper officer of the price-list filed byan assessee under sub-rule (1) shall be necessary only, where theassessee- (i) sells goods to or through a related person as defined insection 4 of the Act; or (ii) uses such goods for manfacture or production of other goodsin his factory: or (iii) clears such goods for free distribution; or (iv) clears such goods in any other manner which doesinvolve sale to a non-related person or; ' (v) clears the goods of the same kind and quality from I factories located in the jurisdiction of different Collectors of Central Excise or Assistant Collectors of Central Excise (vi) submits a fresh price-list or an amendment of the price listalready filed with the proper officer and which has the effectof lowering the existing value of the goods. (3) On receipt of price-list under sub-rule (2), the proper officermay approve the price-list after making such modifications as heconsider necessary so as to bring the value shown in the saidlist to the correct value for the purpose of assesment as providedsection 4 of the Act, He shall, thereafter, rrtum one copy of the approved by him to the assessee who shall, unless otherwise dire by the proper officer, determine the duty payable on the goodsintended to be removed in accordance with such list. (4) In case of assessees other than those specified in sub-rule (2);the duty payable on the goods shall be determined by the assesseshimself on the basis of the price-list filed by him, subject to the provisions of sub-rule (6 ). (5) Subject to the provisions or rule 173cc, an assessee specifiedin sub-rule (2) shall not clear any goods from a factory, warehouse orother approved place of storage unless the price-list has been approvedby the proper officer. In case the proper officer is of the opinion thaton account of any enquiry to be made in the matter of for any otherreasons to be recorded in writing, there is likely to be delay in according approval, he shall either on a written request made by the assesseeor of his own accord allow such assessee to avail himself of theprocedure prescribed under rule 9b for provisionsal assessment ofthe goods. (6) In respect of assessees other than those specified in the subrule (2), the assessment of the monthly return filed by such assesseeunder sub-rule (3) of rule 173g may be made by the proper officerwithout the need for conveying specific approval to the price-listfiled by the assessee. In case the proper officer is of the opinion thaton account of any enquiry to be made in the matter of for any otherreasons to be recorded in writing, there is likely to be delay in assessment of the monthly return or the declared price is not acceptable forany reason, he may order that all the past and future assessmentsunder such price-list shall be provisional. The assessee shall, in such acase, follow the procedure prescribed under rule 9b for provisionalassessment of goods. Such assessee shall not remove the goods pendingapproval of the prices list unless he has executed, within 14 days ofthe receipt of an order from the proper officer. a bond in proper formfor such amount with security or surety, as the proper officer mayspecify. (7) Where the value according to the price-list filed by theassessee is not acceptable to the proper officer, the assessee shall begiven an opportunity to put forth his case and be heard in person ifhe so desires, before the price-list is modified by the proper officer. (8) Where the assessee disputes the price-list approved by theproper officer under sub-rule (2) or sub-rule (6) in respect of any goods,such assessee may, after giving an intimation to that effect to suchofficer, pay the duty under protest on the basis of the price-listapproved by such Officer. (9) The proper officer may, where he considers it necessarycuring the course of any enquiry in connection with a price-listsubmitted by an assessee- (a) require any person to produce or deliver any document orthing relevant to the enquiry: and (b) examine any person acquainted with the facts and circumstances of the particulars shown in the price-list. (10) If in the list filed under sub-rule (1) or approved under subrule (2), or sub-rule (6), as the case may be, any alteration becomesnecessary for any reason, the assessee shall likewise file a fresh listor an amendment of the list filed or approved, as the case may be. (11) Notwitlistanding the provisions of sub-rules (1)1. (10) If in the list filed under sub-rule (1) or approved under subrule (2), or sub-rule (6), as the case may be, any alteration becomesnecessary for any reason, the assessee shall likewise file a fresh listor an amendment of the list filed or approved, as the case may be. (11) Notwitlistanding the provisions of sub-rules (1)1. 0 (6), thecollector may, having regard to the nature of goods manufactured orthe frequent fluctuations of market price of such goods, allow anassessee or a class of assessee to declare the price of goods transactedby the said assessees or assessees for the particular wholesale consignment on the gate pass or accompanying challan or advice note and todetermine the duly payable on such goods intended to be removed onthe basis of the said declared price :provided that where the price thus declared on tlie gate-passor accompanying challan or advice note does not repersent the valueas determined under section 4 of the Act, the proper officer may, aftersuch further inquiry, as he may consider necessary, re-assess the dutydue and thereupon the assessee shall pay the deficiency, if any, by adebit in his account-current or in case of excess payment take creditof the amount paid in excess in the matter prescribed in sub (2) ofrule 1731". "rule 173f. Assessee to determine the duty on the goodsand to remove them on payment thereof-Where the assessee hascomplied with the provisions of rules 173b, 173d and, where applicable 173c (or 173cc) he shall himself determine his liability for theduty due on the excisable goods intended to be removed and shall notexcept as otherwise expressly provided in these rules, remove suchgoods unless he has paid the duty so determined. ""rules 173g. ""rules 173g. Procedure to be followed by the assessee.-- (1)Every usscssee shall keep an account-current with the Collectorseparately for each excisable goods falling under different Chapters ofthe Schedule to the Central Excise Tariff Acl, 1985 in such formsand manner as the Collector may require, of the duties payable onthe excisable goods and in particular such account (and also theaccount in Form R. G. 23, if the assessee is availing of the procedureprescribed in rule 173k) shall be maintained in triplicate by usingindelible pencil and doublesided carbon, and the assessee shall periodically make credit in such account-current, by cash payment into tlietreasury, (so as to keep the balance, in such account-cilrrent) sufficientto cover the duty due on the goods intended to be removed at any time;and every such assessee shall pay the duty determined by him for eachconsignment by the duty determined by him for each consignment bydebit to such account-current before removal of the goods :provided that- (i) the duty due on the goods consumed within the factory in acontinuous process may be so paid at the end of the factory day,except the that in case of cellulosic spun yarn and cotton yarnin respect of which duty is payable in accordance with the provisions of rule 49a the duty due mad be paid by the manufacturerin accordance with the provisions of the said rule; (i) the proper officer may allow an assessee, who removed more than3,000 consignment in the previous calendar year to make consolidated debit in the account-current at the end of the day towardspayment of the duty;. . . . . . . . . . . . . . . " ( 70 ) SECTION 4 of the Act provides that where duly of excise is chargeable on any excisable goods, with reference to value, such value shall, subjectto the other provisions of this Section, be deemed to be the normal price, atwhich such goods are ordinarily sold, by the assessee to a buyer, in thecourse of wholesale trade, for delivery at the time and place of the removal. ( 71 ) SECTION 4 (1) of the Act reads as under :-''4. ( 71 ) SECTION 4 (1) of the Act reads as under :-''4. Valuation of excisable goods for purposes of charging of dutyof excise- (1) Where under this Act, the duty of excise is chargeable onany excisable goods with reference to value, such value shall, subjectto the other provisions of this section be, deemed to be- (a) the normal price thereof, that is to say, the price at whichsuch goods are ordinarily sold by the assessee to a buyer in thecourse of wholesale trade for delivery at the time and place ofremoval, where the buyer is not a related person and the price isthe sole consideration for the sale :-Provided that- (i) where, in accordance with the normal practice of thewholesale trade in such goods, such goods are sold by the assesseeat different prices classes of buyers (not being related persons),each such price shall, subject to the existence of the other cricumstances specified in clause (a), be deemed to be the normal price ofsuch goods in relation to each such class of buyers; (ii) where such goods are sold by the assessee in the courseof wholesale trade for delivery at the time and place of removalat a price fixed under any law, for the time being in force or ata price, being the maximum fixed under any such law, then, notwithstanding anything contained in clause (iii) of this proviso,the price of the maximum price, as the case may be, so fixed,shall, in relation to the goods so sold, be deemed to be thenormal price thereof. (iii) where the assessee so arranges that the goods aregenerally not sold by him in the course of wholesale trade exceptto or through a related person, the normal price of the goodssold by the assessee to or through such related person shall bedeemed to be the price at which they are ordinarily sold by therelated person in the course of wholesale trade at the time ofremoval, to dealers (not being related persons) or where such goodsare not sold to such dealers (being related persons) who sell suchgoods in retail: (b) where the normal price of such goods is not ascertainablefor the reason, that such goods are not sold or for any otherreason, the nearest ascertainable equivalent thereof determined insuch manner as may be prescribed. ( 72 ) PLAINTIFF has proved that it has about 200 dealers, throughoutindia. ( 72 ) PLAINTIFF has proved that it has about 200 dealers, throughoutindia. The supplies of the tiles were being made to all the dealers) Mr. M. L. Vyas was the Sales Executive from 24/08/198 1/11/1984,when he was transferred. The payments used to be received by plaintiff, bymeans of payees account cheques or drafts from the various dealers. Out of200 dealers, statetments of about 62 dealers/persons were recorded by theofficials of defendant no. 2. Out of these 62 dealers/persons, 5 dealer/personsin their statements alleged that they paid extra money to Shri M. L. Vyas onhis demand as he was helping them in giving quick supplies out of turn 'andalso was giving choice/quality goods. ( 73 ) NOW, the question, which arises for consideration is whetherplaint iff company, which is a public limited Company, can be made liablefor an act of the Sales Executive in receiving the extra amount from certaindealers. ( 74 ) IN the plaint, a specific plea lias been taken that plaintiff companyhas reputed persons on its Board of Directors. One Shri H. L. Somany is thechairman of the Company. The Board of Directors of the Company consistsof Goventment nominated Directors, reputed Advocates, Industrialists andalso foreigners. The names of some Directors have been given in the plaintthese allegations have not been disputed by defendants, in their writtenstatement. So, these facts are admitted. No doubt, a publicd limited companyfunctions through, either its Board of Directors or one or two Directorsor the Managing Director. In order to fix liability on the Company as awhole, it is necessary to lift the corporate veil, in case of fraud to find outas to who in fact, was managing the affairs of the company. In the presentcase, no attempt was made by defendants to lift the corporate veil, nor thereis any allegation that Mr. Vyas was an agent of the Company. ( 75 ) THE second question, which arises for consideration is whetherthere was any material before the Authority to warrant the issue of showcause notice and in doing so, whether the provisions of law were compliedwith. Vyas was an agent of the Company. ( 75 ) THE second question, which arises for consideration is whetherthere was any material before the Authority to warrant the issue of showcause notice and in doing so, whether the provisions of law were compliedwith. ( 76 ) UNDER Section 4 of the Act, duty of excise chargeable on theexcisable goods, is with reference to the value and this value is the normalprice, at which the goods are ordinary sold by the assessee, to the buyer inthe course of wholesale trade for delivery at the time and place of removal ( 77 ) THE word "ordinarily", has been interpreted, in several casesthe word "ordinarily" means' in the majority of cases', but not invariably. ( 78 ) AS already stated above, plaintiff has proved that it has about 200dealers all over India. The officials of the Department recorded the statementsof about 62 dealers/persons out of 200 dealers. It is also on record that outof 62 dealers, only 5 dealers alleged extra payment to Shri Vyas. ( 79 ) DEFENDANTS have filed the copies of the statements of 5 dealersrecorded by the officials of the Department. ( 80 ) IN his statement, Shri T. V. L. Santhanam. partner of M/s Lakshmitrading Corporation, staled that his firm used to place orders with plaintifffor supply of tiles and the payment used to be made to plaintiff by means ofdemand Drafts. With regard to the extra payments, he stated that theseextra payments were made to Shri M. L. Vyas, who was the Sales Executive ofthe plaintiff Company. These payments were made upon the direction ofmr. Vyas. This amount of extra money was paid by means of Demanddrafts, sent to Mr. Vyas, at his residential address. He has also stated thatthese extra payments were made to Mr. Vyas, because he told them that nosupplies would be made, unless extra amount was paid to him. . ( 81 ) ANOTHER statement is that of one Shri M. G. Menokke. He is themanager of M/s Chakiat Corporation. In his statement, Shri Menokke allegedthat M/s Chakiat Corporation used to purchase glazed tiles fromplaintiff, after placing the orders in writing. Along with goods, hisconcern used to receive bills/invoices, central excise gate pass and lorry receiptfrom plaintiff. The payments used to be made to plaintiff through bank. Nopayment in cash was made to plaintiff. In his statement, Shri Menokke allegedthat M/s Chakiat Corporation used to purchase glazed tiles fromplaintiff, after placing the orders in writing. Along with goods, hisconcern used to receive bills/invoices, central excise gate pass and lorry receiptfrom plaintiff. The payments used to be made to plaintiff through bank. Nopayment in cash was made to plaintiff. Besides invoice value, certain extramoney was paid to Shri M. L. Vyas, Sales Executive of plaintiff, during theyears 1983-84 and 1984-85. The amount was paid at the instance of Mr. Vyas. He used to telephone the dealer and tell them that unless this extramoney was paid, the supply of glazed tiles would not be effected. Thisextra amount was paid by means of Demand Draft to Mr. Vyas at his residdential address. He has also stated that his concern was not aware whetherthe extra money was passing on the Management, as no enquiry was made bythem in this regard. ( 82 ) SHRI A. R. Balakrishnan, Managing Director of M/s Giri Nathagencies (P) Ltd, alleged in his statement that he had been dealing with theplaintiff company. His company used to place orders for purchase of glazedtiles from plaintiff. The Company used to get bills, delivery challans, centralexcise gate pass etc. The payments used to be made to plaintiff through bank. He has stated that the company paid extra money to Mr. Vyas, who was thesales Executive of the Company, during the years 1983-84, though no accountsof such payment has been maintained. The purpose of making these paymentswas to meet the specific requirements and demands. Mr. Vyas used to tell thecompany on telephone. The payments were made by means of Demanddrafts, which were sent to Mr. Vyas, at his residential address. ( 83 ) TO similar effects, are the statements of Shri N. Santhanam andk. P. Narendran. In these statements, it is also alleged that there wasgenerally short supply of tiles and demand was high, therefore, Mr. Vyas, whowas the Sales Executive, was taking advantage of his position for supplies tothem. ( 84 ) FROM the statements of these dealers, it is clear that none allegedthat any extra payment over and above the invoice price was made to plaintiff or its Directors. ( 85 ) STATEMENT of Mr. Vyas was also recorded under Section 14 of theact. In his statement, Mr. ( 84 ) FROM the statements of these dealers, it is clear that none allegedthat any extra payment over and above the invoice price was made to plaintiff or its Directors. ( 85 ) STATEMENT of Mr. Vyas was also recorded under Section 14 of theact. In his statement, Mr. M. L. Vyas admitted that he was the Sales Executiveof plaintiff, and he had started a side business during his tenure as Sales Executive. He admitted that he was not getting extra money from all the dealersbut only from some of the dealers. He has also stated that he did not sharethis extra amount with anyone and that the Company was not awareof it. ( 86 ) MR. Vyas, has categorically denied that either the Company oror any of its Directors or officials, was involved in the collection of extramoney by him. The money, so received by him, was deposited in his or hiswife bank account or in a joint account. This he did in his personalcapacity. ( 87 ) IT appears that Mr. Vyas was getting the extra money from certaincertain dealers, by misusing his position, as Sales Executive, as, there wasa short supply of the glazed tiles. ( 88 ) PLAINTIFF has also placed on record the statements of certaindealers, whereby the dealers have specifically stated that no extra amount waspaid. Out of 200 dealers, only 5 dealers have alleged extra payment tomr. Vyas. ( 89 ) THERE was no material before the Collector to suggest that eitherthe Company or any of its Directors was collecting extra money, over andabove the invoice price, towards the cost of glazed tiles, during the periodcovered by the show cause notice. ( 90 ) OUT of 200 dealers, D. R. I. Officers, recorded the statements of 62dealers under Section 14 of the Act. Except 5, the other dealers, appear tohave denied payment of any extra amount to even Mr. Vyas or plaintiff. Inthe show cause notice, the Department did not rely upon the statements ofall the 62 dealers, but relied only on the statements of 7 dealers. This,in my view, not only violated the legal procedure, but resulted in graveinjustice to plaintiff. ( 91 ) THERE is no material on record to suggest that the money collectedby Mr. Vyas was paid to the plaintiff or to any of its Directors, or it wascredited in the account of the Company. This,in my view, not only violated the legal procedure, but resulted in graveinjustice to plaintiff. ( 91 ) THERE is no material on record to suggest that the money collectedby Mr. Vyas was paid to the plaintiff or to any of its Directors, or it wascredited in the account of the Company. Payment should be from buyer tothe asscssce. ( 92 ) IN other words, there was no material before the Authority, toindicate the involvement of plaintiff or any of its Directors, either directly orindirectly, with any act of Mr. Vyas. ( 93 ) FROM the perusal of the admitted facts and documents, it is evidentthat the total number of transactions involving the alleged payment of extramoney over the invoice price, constituted less then 1/o of the total sales/transaction alone, during the period in question. In other words, in the substantial majority of transactions, dealers paid the price, as indicated in theinvoices. Thus, this price, alone constituted the normal price, at which thegoods were ordinarily sold. By the show cause notice, the Department soughtto recover excise duty, on the additional amount, allegedly received by Mr. Vyas. This, in may view, is contrary to Section 4 of the Act. So, thedepartment did not follow the provisions as contained in Section 4 of theact. ( 94 ) PLAINTIFF had been submitting the price list under Rule 173c ofthe Rules for the approval of the proper officer. The goods were cleared forthe relevant period, on the basis of provisional assessment. These price listswere approved after filing of the suit and on 8/08/1988. ( 95 ) PLAINTIFF has placed materials, on the record to show that theprices, shown in column 3 of the price list, filed during the relevant period,were the prices, at which plaintiff sold the goods at. the factory gate, in thecourse of wholesale trade. ( 96 ) UNDER Section 4 of the Act, duty of excise is chargeable on theexcisable goods with reference to their values such value is the normal price atwhich the goods are ordinarily sold by assessec to a buyer in the course ofthe wholesale trade. ( 97 ) LN my view, there was non-application of mind, on the part ofthe Authority, issuing the show cause notice. ( 98 ) THUS, the provisions of the Act have not been complied with. ( 97 ) LN my view, there was non-application of mind, on the part ofthe Authority, issuing the show cause notice. ( 98 ) THUS, the provisions of the Act have not been complied with. In issuing the show cause notice, fundamental principle s of judicial procedurewere also not complied with, as there was no material before the Collectorto suggest, any involvement of the Company. ( 99 ) FOR this reasons, the show cause notice dated 27/03/1986is illegal and without jurisdiction, and is liable to be set aside. ( 100 ) AS the show cause notice dated 27/03/1986 is illegal andwithout jurisdiction, so, on this ground alone, the order dated 29/01/1988, cannot be sustained. . ( 101 ) ISSUE No. 3 is decided accordingly. ( 102 ) UNDER the facts and circumstances of the case, I grant the following reliefs: (I) I pass a decree for declaration, in favour of plaintiff and againstdefendants, thereby declaring the notice dated 27/03/1986, asillegal and without jurisdiction and the same is set aside. Consequently, on this ground, the order dated 29/01/1988, is alsoset aside. (ii) I also puss a decree for permanent injunction, restraining defendants from taking any action, in pursuance to the notice dated 27/03/1986. Parties are left to bear their own costs. ( 103 ) IN 1. A. No. 1551 of 1988, I direct plaintiff to deposit a sum ofof Rs. 65 lakhs with the concerned Authority. Subject to this deposit, thestay was to continue till the decision of the suit. This amount was depositedby plaintiff. I am not making any order for the refund of this amount, butthis amount, be accounted for in the records of the defendants.