# i'\'EW CENTRAL JUTE MILLS CO. LTD v. THE ASSISTANT COLLECTOR OF CENTRAL EXCISE, ALLAHABAD & ORS

- **Citation:** [1971] 2 S.C.R. 92
- **Court:** Supreme Court of India
- **Decided:** 1970-09-08
- **Case number:** Civil Appeal No. 460 of 1970
- **Bench:** J. C. Shah, K. S. Hegde, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i-ew-central-jute-mills-co-ltd-v-the-assistant-collector-of-central-excise-5159
- **Pages:** 7

## Headnote

C<'ntral Excise & Salt Act 18 of 1947-Section 12 whether 1•oid for ex,
ce.v:rire ,/elegation-Power under section to alter provisions of Sea Custo1ns
Act, 1878 in applying then1 to Act 18 of 1947 1111hether includes polt·er to
111uke c·hanges in legislatire policy.
General Clauses Act, s. 8(1)-lvhether e/iables provisions of Customs
Act( 1962 to he applied under s. 12 of Act 18 of 1947 in place of the
p1ovisiOns of Sea Custo1ns Act, 1878.
c·uston1s Act, 1962, S. 105(1)-Conditions for issue of search n·arrant.
The appellant company had a factory at Varanasi at which chemicals
including ammonia were manufactured.
It was considered by the Ccqtral
Excise authorities that there had been evasion of tluty on ammonia by
1he company.
The Assistant Collector . Central Excise issued a warrant
for search and seizure of goods and documents, pursuant to which
the
pr.e.!llises of the aforesaid factory were raided. in May, 1968 and certain
documents seized.
The company filed a writ petition in the High Court
which was dismissed by the Single Judge. The Division bench upheld tlfe
order of the Single Judge.
In appeal to this Court by special leave, the
questions that fell for consideration were (i) Whether s. 12 of the Central
Excise Act was void because the powers delegated to the Central Government thereby including the power to make alterations in the Act applied
were excessive; (ii) Whether the Sea Customs Act, 1875 having been',
repealed, it was open thereafter to the Central Government under s. 12 of
the Excise Act to apply s. 105 of the Customs Act
1962; and
(iii)
Whether the Assistant Collector issued the warrants in the present case
after due application of mind to relevant materials and 'facts in terms of
s. 105(1) of the Customs Act, 1962.
·
HELD : (i) In the notifications issued inter a/ia applying s. 105(1)
and s. I JO of the Customs Act, 1962, no such changes had been made
as could possibly. fall within the meaning of the word 'alterations'. The
power to restrict and modify does not import the power to make essential changes. It is confined to alterations of minor character and no change
in principle is involved.
The word 'alteration' in s. 12 must be understood in the sense in which it was open to the legislature to employ it
legitimately and in a con•titutional manner.
No question was thus involved df delegation either of any essential legislative functions or any
change of legislative policy. [96 B-D]
In re Delhi Laws Act, 1912, [1951] S.C.R. 747, referred to.
(ii) S. 8(1) of the General Clauses Act provides that where any
Central Act repeals and re-enacts with or without modification any provision of the former enactment then references in any such enactment
or in any instrument, to the provisions so repealed shall, unless a dilferent
intention appears, be construed ai references to the provisions so reA
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enacted. By virtue of this provision 1t could not be disputed that in s. 12
of the Central Excise and Salt Act. 1947, the Customs Act, 1962 can be
read in plac' of the Sea Customs Act. 1878. [96 El
The contention that s. 12 of the Act empowers incorporation of the
provision of the Sea Customs Act, 1878 in the Act itself and, therefore,
s. 8(1) of the General Clauses Act, does not apply could not be accepted.
Section 12 only contained a provision delegating limited powers to the
Ccnlral Government ·to draw upon the provisions of the Sea Customs Act;
1878 for the purpos' of implementing s. 3 of the Act. [96 F; 97 A]
Secretary of State for India in Council v. Hindusthan Co·opel'afiv~ Jn.,
surcince Society, 58 I.A. 259, distinguished;
The Collector of Customs Madras v. Natliel/a Sampatilil Chetty &:
Anr. [1962] 3 S.C.R. 786 referred to.
The extension of s. 105 could not be said to be illegal merely because
under s. 172 of the Sea Customs Act it was a Magistrate who a.J'ter applying judicial mind had to issue search warrant whereas under the preae

## Text

i'\'EW CENTRAL JUTE MILLS CO. LTD.
v.
THE ASSISTANT
COLLECTOR OF
CENTRAL EXCISE,
ALLAHABAD & ORS.
September 8, 1970
[J. C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.]
C<'ntral Excise & Salt Act 18 of 1947-Section 12 whether 1•oid for ex,
ce.v:rire ,/elegation-Power under section to alter provisions of Sea Custo1ns
Act, 1878 in applying then1 to Act 18 of 1947 1111hether includes polt·er to
111uke c·hanges in legislatire policy.
General Clauses Act, s. 8(1)-lvhether e/iables provisions of Customs
Act( 1962 to he applied under s. 12 of Act 18 of 1947 in place of the
p1ovisiOns of Sea Custo1ns Act, 1878.
c·uston1s Act, 1962, S. 105(1)-Conditions for issue of search n·arrant.
The appellant company had a factory at Varanasi at which chemicals
including ammonia were manufactured.
It was considered by the Ccqtral
Excise authorities that there had been evasion of tluty on ammonia by
1he company.
The Assistant Collector . Central Excise issued a warrant
for search and seizure of goods and documents, pursuant to which
the
pr.e.!llises of the aforesaid factory were raided. in May, 1968 and certain
documents seized.
The company filed a writ petition in the High Court
which was dismissed by the Single Judge. The Division bench upheld tlfe
order of the Single Judge.
In appeal to this Court by special leave, the
questions that fell for consideration were (i) Whether s. 12 of the Central
Excise Act was void because the powers delegated to the Central Government thereby including the power to make alterations in the Act applied
were excessive; (ii) Whether the Sea Customs Act, 1875 having been',
repealed, it was open thereafter to the Central Government under s. 12 of
the Excise Act to apply s. 105 of the Customs Act
1962; and
(iii)
Whether the Assistant Collector issued the warrants in the present case
after due application of mind to relevant materials and 'facts in terms of
s. 105(1) of the Customs Act, 1962.
·
HELD : (i) In the notifications issued inter a/ia applying s. 105(1)
and s. I JO of the Customs Act, 1962, no such changes had been made
as could possibly. fall within the meaning of the word 'alterations'. The
power to restrict and modify does not import the power to make essential changes. It is confined to alterations of minor character and no change
in principle is involved.
The word 'alteration' in s. 12 must be understood in the sense in which it was open to the legislature to employ it
legitimately and in a con•titutional manner.
No question was thus involved df delegation either of any essential legislative functions or any
change of legislative policy. [96 B-D]
In re Delhi Laws Act, 1912, [1951] S.C.R. 747, referred to.
(ii) S. 8(1) of the General Clauses Act provides that where any
Central Act repeals and re-enacts with or without modification any provision of the former enactment then references in any such enactment
or in any instrument, to the provisions so repealed shall, unless a dilferent
intention appears, be construed ai references to the provisions so reA
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NEW CENTRAL JUTE MILLS\', ASST. COLL. ({jrover, J.)
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enacted. By virtue of this provision 1t could not be disputed that in s. 12
of the Central Excise and Salt Act. 1947, the Customs Act, 1962 can be
read in plac' of the Sea Customs Act. 1878. [96 El
The contention that s. 12 of the Act empowers incorporation of the
provision of the Sea Customs Act, 1878 in the Act itself and, therefore,
s. 8(1) of the General Clauses Act, does not apply could not be accepted.
Section 12 only contained a provision delegating limited powers to the
Ccnlral Government ·to draw upon the provisions of the Sea Customs Act;
1878 for the purpos' of implementing s. 3 of the Act. [96 F; 97 A]
Secretary of State for India in Council v. Hindusthan Co·opel'afiv~ Jn.,
surcince Society, 58 I.A. 259, distinguished;
The Collector of Customs Madras v. Natliel/a Sampatilil Chetty &:
Anr. [1962] 3 S.C.R. 786 referred to.
The extension of s. 105 could not be said to be illegal merely because
under s. 172 of the Sea Customs Act it was a Magistrate who a.J'ter applying judicial mind had to issue search warrant whereas under the preaent
notification lifter the enactment of the Customs Act, 1962, it was the
Assistant Collector of Customs performing executive functions who had
been empowered to issue a search warrant. By t,he latter notification die
previous notification applying the provisions of the Sea Customs Act was
superseded and no question with regard to the validity of the notification
issued in 1963 and then amended in 1965 could survive.
Collector Custom & Excise Cochine &: Ors. v. A. S. B<1Pa [1968] I
S.C.R. 82; distinguished [98 A-CJ
(iii) On ,be facts of the case it could not oo said that the Assistant
Collector had no relevant material upon which the belief could oo founded
in terms of s.. 105 ( 1) of the Customs Act, 1962. [98 DJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 460 of
1970.
Appeal by special leave from the judgment and order dated
May 20, 1969 of the Allahabad High· Court in Special Appeal
No. 1177 of 1968.
M. C. Chagla anr R. Gopalakrishnan, for the appellant.
V. A. Se.vid Muhammad, P. C. Chandi, B. D. Slrarma and
.s. P. Nayar, for the respondents.
The J udgme~t of the Court was delivered by
Grover, J.
This is an appeal by special leave from a judgement qf the Allahabad High Court dismissing a writ petition by
which the appellant challenged the validity of a warrant issued
by the Assistant Collector, Central Excise, Allahabad, authorising
the Superintendent, Central Excise, Varanasi, to enter certain premises, search the same and seiz.e the documents therefrom.
The appellant, which is a public limited company having its
registered office at Calcutta, owns and runs a factory known as
Sahu Chemicals and Fertilisers at Varanasi where chemicals such
'94
SUPREME COURT REPORTS
[1971]2 S.C.R.
as ammonia and soda ash are manufactured. In February 1962
excise duty was fixed on manufacture of ammonia for the purpose
of fertilisers at Rs. 25 / -
per metric ton, the rate being
Rs. 125 /- per metric ton if it was used for other purposei.. The
notification by winch the aforesaid duty was payable was later
withdrawn by means of another notification dated March l, 1964
and thereafter no excise duty was required to be paid on the ·
manufacture of ammonia. For the period from May 1962 to the
beginning of March 1964 the appellant had paid duty at the rate
· ·.of Rs. 25/- per metric ton on the ground that ammonia had been
· utilised for the purpcise of manufacture of chemical fertiliser.
· The Central Excise authorities, however, had received information
that part of the ammonia had been utilised for purposes other
than the manufacture of fertilizers on· which higher duty
of
Rs. 125/- per metric ton was payable. It was considered that
there had been evasion of duty. On May ll, 1968, the Assistant
· ... Collector issued a warrant for the search and seizure of goods and
documents pursuant to which the premises of the factory at Varanasi were searched on May 11, 12 and 13, 1968 and various
documents were seized.
· The writ petition was heard in the first instance by the learned
single judge who dismissed it. In appeal his judgment was upheld by the Division Bench. Three contentions were raised before
the Division Bench; the first was that s. 12 of the Central Excises
and Salt. Act, 1944, hereinafter called the "Act" was void as the
powers delegated to the Central Government by the legislature
were excessive and beyond permissible limits. The second point
was that the Sea Customs Act 1878 having been repealed it was
not open to the Central Government under s. 12 of the Act to
apply s. 105 (I) of the Customs Act 1962 to the Act and the
notification dated May 4, 1963 by which this was done was illegal
and ultra vires. The third was that the search and seizure made
l>y the respondents under the impugned authorisation dated August
11, 1968 and the authorisation itself were not in accordance with
the provisions of s. 105 of the Customs Act 1962.
Section 12 of the Act is in the following terms :
S. 12. Application of the provisions of Act VIII of
1878 to Central Excise Duties.-The Central Government may, by notification in the official Gazette declare
that any of the provisions of the Sea Customs Act 1878
relating to the levy on and exemption from customs
duties, drawback of duty, warehousing offences and
penalties, confiscation, and procedure relating to offences
and appeals, shall, with such modifications and alterations as it may consider necessary or desirable to adapt
.them to the circumstances, be applicable in regard to
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NEW CENTRAL JUTE MILLS v. ASST. COLL. (Grover, J.)
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When the Act was enacted. s. 172 of the Sea Customs Act 1878
which could be applied to the Act under s. 12 provided :
S. 172. "Any Magistrate may, on application by a
Customs-Collector, stating his belief that dutiable or prohibited goods (or any documents relating to such goods)
are secreted in any place within the local limits of the
jurisdiction of such Magistrate, issue a warrant to search
for such goods.
Such warrant shall be executed in the same way
and shall have the same effect, as a search warrant issued
under the law relating to Criminal Procedure."
It may be mentioned that the words "or documents" were inserted
by the Sea Customs Amendment Act 1955. After the enactment
of the Customs Act 1962 by the notification dated May 4, 1963
as amended by the Notification dated February 6, 1965 amongst
other provisions of the Customs Act 1962, sub-s. ( 1) of s. 105
and s. 110 were made applicable with certain modifications of a
minor nature under s. 12 of the Act. The material part of these
sections are reproduced below ;-
"S. 105(1) Power to search premises.-(1) If the
Assistant Collector of Customs, or in any area adjoining
the land frontier or the coast of India an officer of
Customs specially empowered by name in this behalf
by the Board, has reason to believe that any goods
liable to confiscation or any documents or things which
in his opinion will be useful for or relevant to any proceeding under this Act are secreted in any place, he
may authorise any officer of customs to search or may
himself search for such goods, documents or things."
"S. 110 ( 3). The proper officer may seize any <locument or things which, in his opinion, will be useful for,
or relevant to, any proceeding under this Act."
On the first point it has been urged on behalf of the appellant
that s. 12 of the Act gave unrestricted and unlimited power to the
Central novemment to modify or alter the provisions of the Sea.
Customs Act 1878 and to apply the provisions of that Act with
such modifications and alterations as the Central Government
might consider appropriate. Modification, it has been pointed out,
may be permissible and may not fall within the vice of excessive
delegation because the basic structure is not changed but alteration, it is suggested, has a much wider connotation and it em-
9G
SUPREME COURT REPORTS
[197!]2 S.C.R.
braces even the changing of the essential pattern of a thing or
object. Such a power inherently involves the making of changes
even in regard to matters pertaining to legislative policy.
.
In our opinion the above contention is purely of academic
mtcrest in the present case. In the notificatiOinS which were issued
applying, inter alia, s. 105 (l) ands. 110 of the Customs Act 1962
no such changes have been made as can possibly fall within the
meaning of the word "alterations".
It has been pointed out in
the previous decisions of this Court that the power to restrict and
modify does not import the power to make essential changes. It is
confined to alterations of a minor character and no change in
principle is involved.
See In re Delhi Laws Act, 1912.(1)
It
was conceded before the High Court and has not been urged before us that the word "modifications" could not be taken as conferring on the Central Government any legislative power which
was in excess of the permissible limits. Objection was taken only
with regard to the word "alterations" but that word must be understood in the sense in which it was open to 1 the legislature to employ it legitimately and in a constitutional manner. No question
is thus involved of delegation either of any essential legislative
functions or any change of legislative policy.
The second contention has hardly any merit.
Section 8 (1)
of tl{e General Clauses Act provides that where any Central Act
repeals and re-enacts with or without modification any provision
of a former enactment then references in'· any such enactment or
in any instrument to the provision so repealed shall,
unless
a
different intention appears, be construed as references to the provision so re-enacted.
By virtue of this provision it cannot be
disputed that in s. 12 of the Act the Customs Act 1962 can be
read in place of the Sea Customs Act 1878. An attempt has
been made to argue that s. 12 of the Act empowers incorporation
of the provisions of Sea Customs Act 1878 in the Act itself and
whenever a notification is issued under it such provisions of the
Sea Customs Act as have been applied become incorporated as
an integral part of the Act. Section 8 of the General Clauses Act
Would not be applicable to a case of such incorporation and it can
only apply if s. 12 can be regarded as containing a reference to
the provisions of the Sea Customs Act. . In ;>ecretary Qf State for
Indian in Council v. Hindusthan Cooperative Insurance Society
Ltd.(') it was accepted as a settled rule of construction that
where a statute is incorporated by reference into a second the
repeal of the first statute does not affect the sec<?nd ... The law
laid down by the Privy Coun~il can have no a1?phc.ab1hty. to the
present case. Section 12 of the Act did -not bodily lift., as 1t were,
certain provisions of the Sea Customs Act 1878 and incorporate
(I) [1951] S.C.R. 747
(2) 58 l.A.259.
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NEW CENTRAL JUTE MILLS v. ASST. COLL. (Grover, !.)
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them as an integral part of the Act. It only empowered the Central Government to apply the provisions of the Sea Customs Act
1878 with such modifications and alterations as might be con-
. sidered necessary or desirable by the Central Government for the
purpose of implementation and enforcement of s. 3 of the Act.
No exception could be taken to the view of the High Court that
s. 12 contained a provision delegating limited powers to the Central Government to draw upon the provisions of the S~a Customs
Act l 878 for the purpose of implementing s. 3 of the .Act. Jn
The Collector of Customs, Madras v. Nathe/la SampaJhu Chetty &:
Another(') this Court examined at length the meaning and effect
of incorporation by reference of one statute into another and discussed the Privy Council case referred to before in detail. Section 8 (I ) of the General Clauses Act, it was pointed out, dealt
with reference or citation of one enactment in another without
incorporation. The usual or recognised formulae generally
employed to effect incorporation were considered; for instance the
words used in s. 20 of 53 and 54 Viet. Ch. 70-Housing of the
Working Classes Act, 1890, the words used were
"shall, for that purpose, be deemed to form part of
this Act in the same manner as if they were enacted in
the body thereof."
In 54 and 55 Viet. Ch. 19, s. 1 (3), the langua.ge employed was:
"The provisions of s. 1 ~4 of the said Act (set out in
the schedule) shall apply as if they were herein enacted."
It is unnecessary to mention the other provisions because a compari~on of the recognised formulae with the text of s. 12 of the
Act shows that the provisions of the Sea Customs Act 1878 were
not meant to be incorporated in the Act and were only to be applicable to the extent notified by the Central Government for th.c
purpose of the duty leviable under s. 3.
Another aspect·•which has been presented under the second
contention is that the impugned notification is bad and stands
vitiated 'because under the previous notification which applies s.
172 of the Sea Customs Act 1878 it was a Magistrate who had to
bring his judicial mind to bear on the expediency or desirability
o[ issuing a warrant for search whereas under the present notification after the enactment of the Customs Act 1962 it is the Assistant
Collector of Customs who performs executive functions an.d who
has been empowered to issue the warrant for search and seizure.
The decision of· this Court in Collector of Customs & Excise,
Cochin & Ors. v. A. S. Bava(') has been sought to be pressed
into service in support of the argument that extension of s. 105 (I)
(I) [1962] ( J) S.CR. 786.
(2) [1968)1 S.<;.R. 82.
98
SUPREME COURT REPORTS
[1971] 2 S.C.R.
is illegal. In that case the provisions of s. 129 of the Sea Cust.oms
Act 1878 had been applied under s. 12 of the Act. Section 129
dealt with the procedure relating to appeals and required an
appellant to deposit pending the appeal the duty or penalty imposed
and empowered the appellate authority, in its discretion, to dispense with such deposit pending the appeal in any particular case.
There was a provision in the Act itself, s. 35, which gave an unfettered right of appeal to a person aggrieved by any decision or
order made under the Act. It was in these circumstances that it
was held that s. 129 of the Sea Customs Act 1878 could not be
made applicable so as to whittle down the substantive right of
appeal conferred by s. 3 5 of the Act. The ratio of that decision
can afford no assistance to the appellant in the present case. By
the notification issued under s. 12 of the Act after the enactment of
Customs Act 1962, the previous notification under the Sea Customs
Act 1878 s.tood superseded and no question survives with regard
to the validity of the notification issued in 1963 and amended in
1965.
On the third point an attempt was made to argue that the
.Assistant. Collector, while issuing the warrant for search and
seizure did not apply his' mind to the relevant and necessary facts.
Our attention has been invited to the warrant itself in which the
·documents have not been particularised or specified but the words
"certain documents" have been used.
The learned single judge
dealt with this matter fully and repelled the contention that there
was no relevant material before the authority upon which the belief could be founded in terms of s. 105 (1) of the Customs Act
1962 by the Assistant Collector. We find no merit in this contention.
The appeal fails and it is dismissed with costs.
G.C.
Appeal dismissed.
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