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Issues:
1. Interpretation of excise duty exemptions under the Central Excises and Salt Act and the Khadi and other Handloom Industries Development Act. 2. Application of equitable estoppel in excise duty payment disputes. 3. Authority of the proper officer to recover excise duty. Analysis: 1. The petitioner, a textile company, manufactured cotton fabrics subject to excise duty exemptions under various notifications. The dispute arose when the Superintendent of Central Excise provided incorrect information regarding the duty exemptions, leading the petitioner to believe they were not liable for additional excise duty under Act 12 of 1953. However, the Assistant Collector later identified the duty liability and demanded payment, resulting in the petitioner claiming equitable estoppel against the revenue's recovery. The court analyzed the relevant notifications and held that the duty exemption did not apply to certain cloth descriptions specified in the proviso, which included the petitioner's goods. Therefore, the petitioner was liable to pay the additional excise duty under Act 12 of 1953. 2. The petitioner argued for the application of equitable estoppel based on the representation made by the Superintendent of Central Excise, contending that they would have passed on the duty to consumers if not for the erroneous information received. However, the court rejected this argument, emphasizing that equitable estoppel cannot prevail against statutory rules like Rule 10 of the Central Excise Rules, which empower the proper officer to collect duty when there is a short levy. The court cited Supreme Court precedents to support the principle that the proper officer's duty recovery authority cannot be hindered by equitable estoppel claims, especially when the duty liability is established under the relevant statutory provisions. 3. The Assistant Collector, acting as the proper officer, determined the additional excise duty payable by the petitioner under Act 12 of 1953. Despite the petitioner's appeals to the Appellate Collector and the Central Government, the duty liability was upheld. The court affirmed the Assistant Collector's decision, stating that since the duty assessment was valid under the statutory provisions, and the petitioner's equitable estoppel argument was not applicable, the petitioner was obligated to pay the demanded amount. Consequently, the court dismissed the writ petition, ruling that each party would bear its own costs in the case.
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