1980 (7) TMI 258 - HC - Central Excise

Issues Involved:

1. Entitlement to duty on specified yardage.
2. Payability of excise duty to the State of Rajasthan.
3. Entitlement to recover excise duty.
4. Jurisdiction of civil court.
5. Bar of limitation.
6. Authorization of person signing and verifying the plaint.
7. Constitutionality of the Rajasthan Excise Duties Ordinance, 1949.
8. Validity of the presentation of the suit.
9. Estoppel from making the claim.
10. Maintainability of the suit.
11. Assessment of excise duty and its recoverability.
12. Relief entitled to the plaintiff.

Detailed Analysis:

1. Entitlement to Duty on Specified Yardage:

The court found that the total yardage for the purpose of excise duty was 13,455,678 yards, calculated at 3 yards per pound. The defendant's claim that the yardage should be calculated at 2.5 yards per pound was not substantiated.

2. Payability of Excise Duty to the State of Rajasthan:

The court held that the defendant was liable to pay excise duty under the Rajasthan Excise Duties Ordinance, 1949. This duty was applicable to the stock of manufactured cloth lying in the mills on April 1, 1949, and to the cloth manufactured during the period from April 1, 1949, to March 31, 1950.

3. Entitlement to Recover Excise Duty:

The court found that by virtue of the agreement dated February 25, 1950, between the President of India and the Rajpramukh of Rajasthan, the Union of India became entitled to recover the excise duty payable by the defendant to the State of Rajasthan. The Ordinance and the Rules framed thereunder were properly promulgated in the Official Gazette.

4. Jurisdiction of Civil Court:

The court held that the suit was maintainable in a civil court. The arrears of excise duty became a debt due to the Union of India, which was entitled to recover the same by a civil suit. The court distinguished this case from others where the jurisdiction of civil courts was barred due to the existence of special tribunals for tax disputes.

5. Bar of Limitation:

The court found that the suit was within limitation under Article 112 of the Limitation Act, which prescribes a period of 30 years for suits by the government. The suit was filed within this period.

6. Authorization of Person Signing and Verifying the Plaint:

The court held that the plaint was signed and verified by a duly authorized person, and the presentation of the plaint was in accordance with the law.

7. Constitutionality of the Rajasthan Excise Duties Ordinance, 1949:

The court found that the excise duty could be levied retrospectively and that such retrospective imposition did not violate the Constitution. The legislative competence of the Union or State to impose excise duty retrospectively was upheld.

8. Validity of the Presentation of the Suit:

The court held that the presentation of the suit was valid. Any defects in the presentation were rectified, and the suit was maintainable.

9. Estoppel from Making the Claim:

The court did not find any grounds for estoppel that would prevent the plaintiff from making the claim for excise duty.

10. Maintainability of the Suit:

The court held that the suit was maintainable. The plaintiff's right to recover the arrears of excise duty as a debt was affirmed.

11. Assessment of Excise Duty and Its Recoverability:

The court found that the assessment of excise duty was duly made, and the duty was demanded according to law by the Central Excise Officer through a notice of demand. This was sufficient compliance with the provisions of law.

12. Relief Entitled to the Plaintiff:

The court decreed the plaintiff's suit for Rs. 2,14,520/- on account of excise duty and directed that the plaintiff shall get interest at 6% on the decretal amount from the date of the suit till realization.

Conclusion:

The appeal was dismissed, and the judgment and decree of the District Judge were upheld. The plaintiff was entitled to recover the specified amount of excise duty along with interest.

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