1999 PLP 1925 (MLD)

Provided that the exemptions under sections 132 and 133 of the Code of Civil Procedure (V of 1908) shall be applicable to requisitions for attendance under this section. (3) Every such inquiry as aforesaid shall be deemed to be a 'judicial proceedings' within the meaning of section 193 and section 228 of the Pakistan Penal Code (XLV of 1860). " A plain reading of section 14 of the Central Excises Act, 1944 suggest that a Central Excise Officer, empowered by the Central Board of Revenue in this behalf, has powers to summon any person whose attendance he considers necessary to give evidence or to produce document in an inquiry which such Central Excise Officer is making for any of the Purposes of this Act. (Under lining is mine). In the context of the letters impugned by the plaintiff it is to be seen as to whether the same have been addressed to the plaintiff by the empowered Central Excise Officer in any inquiry which he is making for any of the purposes of the Act. As observed above the first letter dated 12-12-1997 addressed by defendant No.3 to the plaintiff has not been brought on record by any of the parties but it is a common ground between the parties that contents of the same are identical to the contents of letters issued by defendant No.3 to some other Companies importing and marketing tea. One of such Companies is Tapal Tea Pakistan (Pvt.) Ltd., and identical letter issued by defendant No.3 to it (filed by the defendants alongwith their written statement) reads as under:-- "Government of Pakistan Directorate General of Intelligence and Investigation (Customs and Excise) B-70, K.D.A. Scheme No. 1 Karsaz Road, Karachi C.No.5-CET/Miscellaneous 97/1802 Dated: 18-12-1997 To, M/s. Tapal Tea Pakistan (Pvt.) Ltd., K.I.A. Karachi. Subject:- Notice under section 14 of Central Excise Act. 1944. Whereas, there are reasons to believe that the examination of the books and documents specified in the schedule appended hereto, and lying in the possession or under the control of Mr./Messrs as above residing at above is pertinent to an inquiry which I am making for the purpose of the Central Excises, Act, 1944, you are hereby ordered to produce the said books and documents on 24-12-1997 at 10.00 a.m. before me failing which you will be dealt with according to law. I reserve the right to call for any additional books and documents that I may have reason to believe are in your possession at any later stage.

2. The inquiry is deemed to be a judicial proceeding within the meaning of sections 193 and 228 of Pakistan Penal Code (XIV of 1860). (a) Statement showing production, clearance and value of paper Bags meant for Packing of Tea (Tea Bags) manufactured by you for last three years (Month wise). (b) Proof of payment of C.E. duty if any on above item. (c) Description of Manufacturing process adopted for Paper Bags (Tea Bags). (Sd.) (Khalid Ahmed Ansari) Senior Intelligence Officer" A plain reading of the aforesaid letter reveals that defendant No.3 has called for the information (description of manufacturing process) mentioned therein in connection with an enquiry which defendant No.3 is conducting to ascertain as to whether the process of conversion of filter paper into Tea Bag falls within the definition of "manufacture" as contained in the Act and if so the resultant commodity falls within the definition of "exciseable goods". Such being the position I am of the considered view that defendant No.3 is legally competent to issue the impugned letters to call for the information for the purposes of the Act from the plaintiff. There is another aspect of the matter. Under subsection (3) section 14 of the Act inquiry undertaken by duly empowered Central Excise Officer is deemed to be a "Judicial Proceedings" within the meaning of section 193 and section 228 of the Pakistan Penal Code (XLV of 1860). The purposes of enacting subsections 3 to 14, of the Act is to eliminate possibilities of giving false evidence and to curb intentional interruption or insult to the Central Excise officer conducting an enquiry for the purposes of the Act. In view of the above grant of blanket injunction as prayed by the plaintiff would amount to stifling the process of enquiry being conducted by the Central Excise Officer under section 14 of the Act. Preamble of the Central Excise Act, 1944 suggests that the said Act has been promulgated by the legislature to consolidate and amend the law relating to Central Duties of Excise on goods manufactured produced, imported or consumed and service provided or rendered in Pakistan. The Act embodies in itself complete procedure for levy and recovery of duties of Central Excise. "Excisable goods" have been defined in section 2(19) and definition of word "manufacture" has been defined in section 2(25) of the Act. In terms of section 2(19) of the Act "Excisable goods" mean goods specified in the First Schedule and includes goods manufactured or produced in non-tariff area and brought for consumption to tariff area. Subsection (25) of section 2 of the Act defines the words "manufacture" as under: "25. manufacture' includes any process incidental or ancillary to the completion of a manufactured product and any process of remanufacture, remaking, reconditioning or repair and the process of packing or repacking such product; and, in relation to tobacco, includes the preparation of cigarettes, cigars, cheroots, biris, cigarette and pipe or hookah tobacco, chewing tobacco or snuff, and the word 'manufacturer' shall be construed accordingly and shall include not only a person who employees hired labour in the production on manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account if those goods are intended for sale and, in respect of gold and silver and products thereof, also any person dealing in gold and silver and products thereof who, whether or not he carries out any process of manufacture himself or through his employees of relatives, gets any process of manufacture carried out on his behalf by any person who is not in his employ, and any person so dealing in gold and silver and products thereof shall be deemed to have manufactured for all purposes of this Act, all products of gold or silver in which he deals in any capacity whatever;" Section 3 of the Central Excises Act, 1944 is the charging section which provides for levy and collection of prescribed duties of excise on all excisable goods. Section 9 of Act relates to penalties and offences under the Act. Section 35 of the Act provides for appeals to Collector (Appeals) against an order passed, under the Act or the rules made thereunder, by a Central Excise Officer whereas section 35-B of the Act provides appeals to the Appellate Tribunal by person aggrieved from orders passed by the Collector of Central Excise as an adjudicating authority, an order passed by the Collector (Appeals) under section 35 and an order passed by the Central Board of Revenue of Collector of Central Excise under section 35-A. It would, thus, be seen that the Central Excises Act, 1944 is a complete code in itself in respect of levy and recovery of the duties of the Central Excises and a forum for rederssal of grievances of persons aggrieved by any order passed under the Act has also been provided. Reverting to the grievance of the plaintiff it may be stated that section 14 of the Central Excises Act, 1944 authorises and empowers Central Excise Officer to summon any person to give evidence or to produce a document in any inquiry for the purpose of the Act. It is not the case of the plaintiff that the empowered Central Excise Officer is not competent under the law to summon the plaintiff to give evidence or to produce document. The case of the plaintiff is that the tea and filter paper used by the plaintiff for converting the same into tea bag is exempt from Excise Duty and that the process by which filter paper is converted by the plaintiff into a tea bag does not fall within the definition of manufacture as defined under subsection (25) of section 2 of the Act and that the tea bags is not a vendable commodity and, as such, the same is not subject to payment of excise duty. Further contention of the learned counsel for the plaintiff is that by issuing the impugned letters the defendants Nos.3 and 4 are conducting roving inquiry which is not permissible under the law. The determination of the question as to whether the process of converting filter bag into tea bag falls within the definition of manufacture as contemplated by subsection (25) of section 2 of the Act and as to whether the tea bag falls within the definition of Excisable Goods and defined under subsection (19) of section 2 of the Act primarily falls within the domain of the hierarchy created under the Act and Court should not and will not substitute its own opinion on the subject as any decision on the said point would amount to encroaching upon the powers, functions and duties of the officers empowered under the Act. Such being the position, I am of the considered view that the Central Excise Officer is, under section 14 of the Act, fully competent to call for the information from the plaintiff as demanded in the impugned letters but before raising a demand for payment of Central Excise Duty on the basis of information supplied by the plaintiff it is obligatory for the defendants to first, after hearing the plaintiff, decide the question as to whether the process of conversion of filter paper into a Tea Bag falls within the definition of; "Manufacture" as defined under subsection (25) of section 2 of the Act and the question as to whether the resultant commodity is exciseable goods under the Act. C.M.A. No.4544 of 1998 is, therefore, disposed of in the following term:- (a) That the plaintiff shall furnish the information called for by defendants vide letter dated 12-12-1997 within a maximum period of 30 days from the date of this order. (b) That on receipt of the information, as above, that defendants shall, after providing an opportunity of being heard to the plaintiff, determine the question as to whether the Tea Bags manufactured by the plaintiff are excisable goods. (c) Failure of the plaintiff to furnish the information as per (a) above would entail penal consequences as contemplated under the Act. H. B. T./L-10/K Order accordingly.