M.N. CHANDURKAR, C.J.


In the judgment appealed against, the learned single Judge has held as follows :


1.The Director of Anti-evasion (Central Excise), New Delhi, had been properly invested with the powers of the Collector of Central Excise.


2.In view of the inter-Collectorate ramification and the huge estimated evasion of excise duty, the notice to show cause issued to the appellant is not open to challenge on the ground of overlapping of jurisdiction.


3.Having regard to the fact that there are a large number of branches of the Indian Tobacco Co., throughout India, it will not only be desirable, but also proper that one officer exercises the powers of the Collector.


4.The contents of the show cause notice do not amount to prejudging the alleged evasion and before a notice to show cause was issued, the authority was required to beprima faciesatisfied that there are reasonable grounds for the issue of a show cause notice.


5.The question as to whether there has been a clandestine removal so as to attract the provisions of Rule 9(2) of the Central Excise Rules could be decided by the adjudicating authority.


6.The contentions which were advanced before the learned single Judge are reiterated at the stage of admission of these writ appeals. We are however not satisfied that there is any error in the view taken by the learned single Judge.


7.The show cause notice issued by the Director of Anti-evasion (Central Excise) refers to contravention of the provisions of Rule 9(1), Rule 52, Rule 52A and Rule 209 of the Central Excise Rules, by the Indian Tobacco Co. Ltd. as well as its seven outside contract Manufacturers. The present appellant is one such outside Contractor Manufacturer. The estimated evasion is more than Rs. 800 crores. In so far as the appellant is concerned the estimated evasion is to the tune of Rs. 43.07 crores. They have paid excise duty to the tune of Rs. 116.70 crores, on the footing that they received Rs. 304.61 lakhs as job charges. According to the Department, the appellant has conveniently suppressed the fact of receivingad hocpayments as compensation from Messrs. Indian Tobacco Co. Ltd. which have been accounted in the books of accounts of the appellant as trade discount. The show cause notice refers to several facts which cannot be gone into at this stage.


8.The contention of the appellant is that under Section 37 of the Central Excise and Salt Act (hereinafter referred to as the Act), power is given to the Central Government to make rules to provideinter alia'for the assessment and collection of duties of excise, the authorities by whom function under this Act are discharged, the issue of notice requiring payment, the manner in which the duties shall be payable and the recovery of duty not paid' [see Section 37(2)(ib)]. It is argued that in exercise of this power while defining the meaning of the term 'Collector' insofar as the Districts of Coimbatore, Periyar, Nilgiris, Salem and Dharampuri in the State of Tamil Nadu are concerned, 'Collector' is defined as meaning the Collector of Central Excise, Coimbatore. Therefore, insofar as the appellant is concerned, since the factory is situated in Hosur, District Dharampuri, the Collector of Central Excise, Coimbatore, alone is the proper authority to issue notice. No other person, according to the learned counsel for the appellant, can be authorised to exercise this power by virtue of an executive order of the Central Board of Excise. This contention overlooks the fact that Section 2(b) of the Act defines 'Central Excise Officer' as meaning 'any officer of the Central Excise Department or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards and Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer'. The definition of a 'Collector' apart from defining what a Collector is, also contains an inclusive clause. In view of this definition, undoubtedly, the Collector of Central Excise, Coimbatore, is a 'Collector', but the inclusive part of the definition includes within the definition of 'Collector' 'an Additional Collector and any officer specially authorised under Rule 4 or Rule 5 to exercise throughout any State or any specified area therein all or any of the powers of a Collector under these rules'. The word 'Officer' used in the inclusive part is defined as 'Central Excise Officer'. By virtue of the inclusive part of the definition, therefore, a 'Collector' will include a 'Central Excise Officer', and, if he is specially authorised under Rule 4 or Rule 5 to exercise the powers of a Collector, then, such Central Excise Officer will also be a Collector, Rule 4 provides as follows :

"The Central Board of Excise and Customs may appoint such person as it things fit to be Central Excise Officers, or to exercise all or any of the powers conferred by these rules on such officers" *


9.There is a notification which has been issued on 27-3-1986 (which is impugned in the writ petitions) by the Central Board of Excise and Customs in exercise of the powers conferred by Section 2(b) of the Act, read with Rule 4 of the Central Excise Rules, 1944, by which some officers of the Directorate of Anti-evasion (Central Excise) have been invested with all the powers of officers of different ranks, such as, Collector, Deputy Collector, Assistant Collector, Superintendent and Inspector. The Director in the Directorate of Anti-evasion (Central Excise), is invested within the powers of the Collector of 'Central Excise'. This Notification, in our view, has no infirmity at all; and having regard to the inclusive definition of the term 'Collector', there is nothing illegal in the powers of the Collector being invested in the Director. The notification also invests the aforesaid Officers of the Directorate of Anti-evasion (Central Excise) with the powers to be exercised throughout the territory of India and therefore is in conformity with Rule 2(ii). The powers having been expressly conferred by the Rules and the Act, there is no question of any conflict between the powers vested by the rule itself in the Collector as defined and the power vested by exercise of the specific powers under the Act and the Rules.


10.The other contention that there are no guidelines to show under what circumstances the Director of Anti-evasion (Central Excise) is to act, is also without any substance. It is implicit in the several provisions of the Act that the officers referred to in the Act have to exercise their powers in furtherance of the object of the Act. Among other things, Section 11A, and particularly the proviso thereto, takes care of the powers to be exercised to recover excise duty in the case of evasion. It is for the authorities to decide how best in a given case to recover excise duty which has been evaded and how to deal with such cases of evasion. In certain cases, evasion may involve persons from different parts of the country when the activities of a manufacturer are spread all over the country. In the instant case, the allegations made in the show cause notice disclose, at leastprima facie, that there is an evasion on a large scale by activities in different places in India and that would itself be enough to show that, at leastprima facie, the power cannot be said to be either abused or exercised mala fide. The power invest a Central Excise Officer with the powers of the Collector of Central Excise, or other officers, is vested in the highest authority under the Act and the possibility of abuse of the power cannot thus be assumed.


11.The other contention raised is that the Director of Anti-Evasion (Central Excise), must be held to have a bias against the appellant because he had investigated into the circumstances which are alleged to have resulted in the evasion of excise duty and therefore, it must be assumed that the authority has already made up his mind. In any case, according to the learned counsel, a likelihood of bias would be enough to vitiate the show cause notice. We have gone through the notice to show cause issued to the appellant and it appears to us that the Director in the Directorate of Anti-evasion (Central Excise) has taken care to include in the notice all the necessary material on which the charge of evasion of excise duty is intended to be proved. The authority has been careful enough to use the phraseology that on the material referred to in the show cause notice 'it appears' that there is a contravention of the provisions of Central Excise Rules. For example, in paragraph 12, the authority after referring to all the evidence, which has been collected, has stated -


"From the foregoing evidence it appears that ....." In clause (h) of the same paragraph, it has been stated :-



"Thereby it appears that I.T.C. and even O.C.Ms have jointly rendered themselves liable for penalties under the provisions of Rule 9(2), Rule 52A(5), Rules 209, 210 of the said Rules" *


The notice, generally, therefore, expresses merely aprima facieview and is pure and simple a notice to show cause. It is therefore, not open to challenge on the ground that the authority has already made up his mind. The fact that the investigations were made by the same person who has issued the notice does not vitiate the notice on the ground of bias.


12.It was then urged that the petitioner is being called upon to meet charges of evasion of excise duty both by the Collector of Central Excise, Coimbatore, and by the Director or Anti-evasion (Central Excise) and thus the plurality of officers, according to the learned counsel, results in avoidable inconvenience. The record shows that the material which is dealt with by the Collector of Central Excise, Coimbatore, is in respect of alleged evasion prior to 1-3-1983 and the alleged evasion dealt with by the specially authorised Collectors is after 1-3-1983, when the method of calculation has undergone a change. There is no overlapping of jurisdiction. Indeed, it appears that having regard to the material which is incorporated in the show cause notice, a conspiracy has been alleged between the I.T.C. and its manufacturers who are spread over all over the country i.e., in Tamil Nadu, in Andhra Pradesh, in Bombay, in Madhya Pradesh and in Sikkim, if the materials have been collected from all over the country it can be properly dealt with only when determination of the alleged evasion is entrusted to one competent authority. The decisions inBidi Supply Co.v. Union of India, 1956 (29) ITR 717, 1956 SCJ 492, 1956 (1) SCR 267, 1956 AIR(SC) 479, 1956 ILR(Pun) 1163 andSir Balaji Rice Co.v. Commercial Tax Officer, 1984 (55) STC 292 cannot therefore be of any assistance on the facts of the present case.


13.It was then argued that there is no allegation of clandestine removal and on the basis of certain decisions it was urged that rule 9(2) of the Rules would not be attracted in the absence of any allegation of clandestine removal.

It is too premature to go into the merits of themodus operandiwhich according to the department has been adopted. Whether themodus operandiestablishes a case of evasion and if such evasion is within the four corners of Rule 9(2) can properly be determined only when the full and complete enquiry is made in pursuance of the show cause notice. It would not therefore be proper at this stage to go into the validity of the notice on the footing that it does not fall within Rule 9(2). 14.This, in our view, is clearly a case where, having regard to the proviso to Section 11A of the Act, the Central Excise Officer, viz. the Director in the Directorate of Anti-evasion (Central Excise) has been properly invested with the powers of the Collector of Central Excise. Having regard to the alleged wide ramification of the activities of the different manufacturing units of the I.T.C., it would not be proper to throttle the enquiry at this stage on the ground that the show cause notice is void. 15.The appeals are dismissed. 16.The learned counsel for the appellant after the pronouncement of this judgment has made an oral application for leave to appeal to the Supreme Court. The leave prayed for is refused.