1972 (9) TMI 54 - HC - Central Excise

Summary

Issues:
1. Interpretation of entry 18-A of the Central Excise and Salt Act, 1944 regarding excise duty on yarn on hanks.
2. Validity of demand notice issued for recovery of excise duty.
3. Jurisdiction of the authority to pass the order under Rule 9(2) or Rule 10 of the Central Excise and Salt Rules.

Detailed Analysis:
1. The case involved a dispute over the interpretation of entry 18-A of the Central Excise and Salt Act, 1944, concerning the levy of excise duty on folded yarn on hanks. The plaintiff, a company, filed a suit against the Union of India and the Collector of Central Excise seeking recovery of excise duty paid under protest. The trial court decreed the suit, but the lower Appellate Court dismissed it, citing that the demand notice was issued under Rule 9(2) instead of Rule 10. The judgment highlighted that the substance of the matter should be considered over mere technicalities, following a precedent set by the High Court in a previous case.

2. The main contention before the District Judge was the validity of the demand notice issued under Rule 9(2) of the Central Excise and Salt Rules. The District Judge held that the authority had the jurisdiction to pass the order, and any error in citing the specific rule did not invalidate the notice. It was emphasized that the notice was not attacked on any other grounds during the trial. The judgment concluded that the demand notice was deemed legal and valid, dismissing the appeal on this issue.

3. The jurisdiction of the authority to pass the order under Rule 9(2) or Rule 10 of the Central Excise and Salt Rules was a crucial aspect of the case. The District Judge ruled that even if the demand notice was mistakenly issued under Rule 9(2), it could be justified under Rule 10, which authorized the demand for excise duty. The non-examination of the Inspector was deemed immaterial, as the key factor was the legality of the demand itself. The judgment upheld the authority's jurisdiction to issue the notice and collect the excise duty, ultimately leading to the dismissal of the appeal on this ground.