1965 (11) TMI 21 - HC - Central Excise

Summary

Issues:
1. Liability of petitioner for excise duty on tobacco not reaching its destination.
2. Challenge to the order of Excise authorities demanding duty and the dismissal of appeal by Collector, Central Excise.
3. Preliminary objection on maintainability of the petition due to alternative remedy under Central Excise and Salt Act, 1944.

Analysis:
Issue 1:
The petitioner, a Commission Agency dealing in tobacco and potatoes, sold tobacco to a buyer who failed to re-warehouse the goods at the destination, leading to a demand for excise duty on the petitioner. The petitioner argued that as the goods were removed on the consignee's bond under Rule 153 of the Excise Rules, it was not liable for duty. The court examined the provisions of Rule 153 and Rule 156-A, concluding that since the consignee did not comply with the re-warehousing requirements, the petitioner could not fulfill its obligations under Rule 156-A. Consequently, the court held that no action could be taken against the petitioner under Rule 156-B, and no duty could be demanded.

Issue 2:
The petitioner challenged the Excise authorities' duty demand and the Collector's dismissal of its appeal. The court found that the petitioner's fundamental right to carry on trade was being infringed by coercive measures taken by Excise authorities. It rejected the preliminary objection of alternative remedy under the Central Excise and Salt Act, 1944, citing precedents that such remedies were onerous and burdensome. The court emphasized that when a fundamental right is infringed, Article 226 jurisdiction can be invoked, and the alternative remedy was not adequate in this case. Consequently, the court directed the authorities not to demand duty from the petitioner.

Issue 3:
The preliminary objection raised by the opposite party regarding the maintainability of the petition due to the availability of an alternative remedy under the Central Excise and Salt Act, 1944, was dismissed by the court. It held that the alternative remedy was not adequate in the face of the petitioner's fundamental right being affected. Citing previous judgments, the court emphasized that when a fundamental right is infringed, the court can exercise its powers under Article 226. The court found no merit in the objection raised by the opposite party and proceeded to rule in favor of the petitioner, directing the authorities not to demand duty.