1984 (9) TMI 69 - HC - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the Civil Court under the Central Excises and Salt Act.
2. Liability for removal of goods from a sealed warehouse.
3. Applicability of Rule 225 and Rule 147 of the Central Excise Rules.
4. Adequacy of the show cause notice and procedural compliance.

Detailed Analysis:

1. Jurisdiction of the Civil Court under the Central Excises and Salt Act:

The primary issue addressed in the judgment is whether the Civil Court has jurisdiction in matters arising under the Central Excises and Salt Act. The court referred to previous judgments, including the Division Bench decision in Union of India v. Jyoti Ltd. and the Supreme Court ruling in Union of India v. Narasinhulu, to conclude that the Central Excises and Salt Act constitutes a complete code. The court held that the jurisdiction of the Civil Court is barred by clear implication of the statute. It emphasized that any grievances related to the enforcement of excise duties must be addressed through the specialized machinery provided under the Act, and not through civil suits.

2. Liability for removal of goods from a sealed warehouse:

The facts of the case reveal that the plaintiff's warehouse was sealed by a court bailiff from April 13, 1967, to April 18, 1967. The Assistant Collector of Central Excise concluded that the removal of tobacco must have occurred before the warehouse was sealed. Consequently, the plaintiff was held liable for the removal of the goods. The appellate Collector upheld this decision, relying on Rule 225 of the Central Excise Rules, which holds the licensee of a warehouse responsible for any removal of excisable goods.

3. Applicability of Rule 225 and Rule 147 of the Central Excise Rules:

The appellate Collector's decision was based on Rule 225, which states that the licensee is responsible for the removal of goods from the warehouse. The court noted that the appellate Collector did not consider Rule 147, which grants the excise authorities the power to remit duty in cases of loss. The court suggested that the authorities should determine whether the goods were removed before or after the warehouse was sealed and whether Rule 147 applies to the facts of the case.

4. Adequacy of the show cause notice and procedural compliance:

The plaintiff contended that the show cause notice did not adequately inform them about the quantum of duty and penalty. They also argued that the excise authorities did not consider Rule 147, which allows for remission in case of loss. The court acknowledged these contentions but reiterated that such issues should be addressed by the authorities under the Central Excise Act, not the Civil Court.

Conclusion:

The court concluded that the Civil Court lacks jurisdiction in matters arising under the Central Excises and Salt Act. It emphasized that all issues raised by the plaintiff could be addressed through the specialized machinery provided under the Act. The court set aside the judgments and decrees of the lower courts and dismissed the suit, directing the parties to bear their own costs. The court expressed hope that the pending Revision Application before the Central Excise Appellate Tribunal would be decided expeditiously and that recovery would not be enforced against the plaintiff until then.