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Issues Involved:
1. Whether the suit is barred by Section 40 of the Central Excises and Salt Act, 1944. 2. Whether the suit is barred by Section 35(2) of the Central Excises and Salt Act, 1944. 3. Whether the Excise authorities should have given a notice to the plaintiff to show cause before canceling the order dated 26-3-52. 4. Whether the order dated 22-12-52 is illegal. Detailed Analysis: Issue 1: Whether the suit is barred by Section 40 of the Central Excises and Salt Act, 1944 Section 40 of the Central Excises and Salt Act, 1944, provides immunity to the Central Government and its officers for actions done in good faith under the Act. The court observed that the order dated 22-12-52 by the Superintendent Central Excise, Anand, was not passed under the Act or the Rules, making it illegal and contrary to the Act. Therefore, Section 40 does not protect the government or its officers in this case. The court concluded that the suit is not barred under Section 40 of the Act. Issue 2: Whether the suit is barred by Section 35(2) of the Central Excises and Salt Act, 1944 Section 35(2) of the Act states that every order passed in appeal shall be final, subject to the power of revision conferred by Section 36. The court referred to the precedent set in Secretary of State v. Mask and Co., which emphasized that exclusion of civil court jurisdiction must be explicitly expressed or clearly implied. The court found that the order dated 22-12-52 was illegal and unjustified, and hence, the jurisdiction of the civil courts was not excluded. Consequently, the suit is not barred under Section 35(2) of the Act. Issue 3: Whether the Excise authorities should have given a notice to the plaintiff to show cause before canceling the order dated 26-3-52 The court did not find it necessary to address this issue in detail, as it had already determined that the order dated 22-12-52 was illegal and contrary to the Act. Thus, the question of whether a notice should have been given was rendered moot. Issue 4: Whether the order dated 22-12-52 is illegal The court examined the provisions of Rule 10 and Rule 10A of the Central Excise Rules, 1944. Rule 10 pertains to the recovery of duties short-levied or erroneously refunded within three months, while Rule 10A covers situations where no specific provision exists for the collection of any duty or deficiency in duty. The court found that the short levy in this case was due to an error in interpreting the certificate from the Superintendent of Central Excise, Trivandrum. Since the short levy was due to an error, Rule 10 applied, requiring recovery within three months. The demand made on 22-12-52 was beyond this period, making it illegal. Therefore, the order dated 22-12-52 was deemed illegal and contrary to the Act. Conclusion The court held that the suit filed by the plaintiff is not barred by Section 40 or Section 35(2) of the Central Excises and Salt Act, 1944. The order dated 22-12-52 was found to be illegal and contrary to the Act and Rules. Consequently, the plaintiff's suit was decreed in full, and the appeal was allowed with costs throughout.
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