1988 (4) TMI 75 - HC - Central Excise

Summary

Issues:
1. Challenge of duty demand for non-production of triplicate copy of application under Rule 156B of Central Excise Rules.
2. Compliance with Rules 156A and 156B regarding removal of goods from one warehouse to another.
3. Jurisdiction to make a demand under Rule 156B in case of non-compliance with Rule 156A(4).

Analysis:

1. The petitioner, a wholesale dealer in tobacco, challenged a duty demand of Rs. 4,986.10 for not producing the triplicate copy of an application for the removal of tobacco. The petitioner had dispatched the consignment to the consignee, but the triplicate copy was not returned by the consignee. The demand was made under Rule 156B of the Central Excise Rules. The petitioner approached the Court to quash the demand.

2. The petitioner complied with the procedure under Rules 156A and 156B for the removal of goods from one warehouse to another. The consignor is required to present a triplicate application endorsed with a certificate to the officer-in-charge of the warehouse of removal within ninety days of the transport permit issuance. The petitioner failed to comply with this requirement, but the demand was made under Rule 156B, which necessitates non-compliance with both Rule 156A(4) and the absence of the duplicate application with the rewarehousing certificate from the warehouse of destination.

3. The Court examined whether the non-compliance with Rule 156A(4) empowers the authority to demand duty under Rule 156B. The judgment highlighted that for such a demand to be valid under Rule 156B, both conditions of non-compliance with Rule 156A(4) and the absence of the duplicate application with the rewarehousing certificate must be met. As the duplicate application's absence was not proven, the demand made under Rule 156B was found unsustainable. The Court set aside the demand and allowed the writ application without costs.

Additional Judgment:
- Chief Justice Agrawal concurred with the judgment, emphasizing that mere non-compliance with Rule 156A(4) does not automatically warrant duty imposition. The prescribed authority must follow the procedure outlined in Rule 156B(1) for levying duty. The Court found that the opposite parties failed to demonstrate compliance with the statutory requirements of Rule 156B(1), leading to the success of the writ application.