|
Advanced Search Options
Central Excise - Case Laws
Showing 81221 to 81240 of 81330 Records
-
1966 (5) TMI 10
Issues Involved:
1. Jurisdiction of the civil court to entertain the suits.
2. Validity of the notices issued under Rule 10A versus Rule 10.
3. Applicability of Section 35 and Section 40 of the Central Excises and Salt Act, 1944.
Issue-wise Detailed Analysis:
1. Jurisdiction of the Civil Court:
The defendant contended that the civil court lacked jurisdiction to entertain the suits, arguing that the action of the Central Excise Department in issuing notices demanding additional excise duty could not be questioned in a civil court. The court, however, held that if the Central Excise Officer acted beyond his powers or arbitrarily, the civil court had jurisdiction to examine the validity of the notices. The court referenced several judgments, including Secretary of State v. Masp & Co. and Firm I. S. Chetty & Co. v. State of Andhra Pradesh, to support the principle that non-compliance with fundamental statutory provisions renders proceedings illegal and without jurisdiction. Consequently, the civil court could interfere if the officer acted beyond the scope of his authority.
2. Validity of Notices under Rule 10A versus Rule 10:
The plaintiffs argued that the notices for additional duty were issued under Rule 10A but should have been under Rule 10, which has a three-month limitation period. The court found that the initial duty was paid on 29-4-1953, and the notices were issued after three months, making Rule 10 inapplicable. Rule 10A, being a residuary provision, applies only when Rule 10 does not cover the situation. The court agreed with the plaintiffs that the notices should have been issued under Rule 10 within the three-month period, and the action under Rule 10A was illegal. The court emphasized that Rule 10A could not be used to circumvent the specific provisions of Rule 10.
3. Applicability of Section 35 and Section 40 of the Central Excises and Salt Act, 1944:
The defendant argued that Sections 35 and 36 provided the exclusive remedies for grievances against decisions or orders by Central Excise Officers, and thus, the civil courts had no jurisdiction. Section 35 provides for appeals and revisions, while Section 40 bars suits against the Central Government or its officers for actions done in good faith under the Act. The court held that these sections did not apply if the officer acted beyond his powers or arbitrarily. The court noted that Section 40 protects actions done in good faith, but if the validity of the order itself is challenged, this protection does not apply. The court cited Union of India v. Vittappa Kamath and other cases to support this interpretation, concluding that the suits were not barred by Sections 35 or 40.
Conclusion:
The court dismissed the appeals, holding that the civil court had jurisdiction to examine the validity of the notices, which were improperly issued under Rule 10A instead of Rule 10. The Central Excise Officer acted beyond his powers, and the protections under Sections 35 and 40 of the Central Excises and Salt Act did not apply. The appeals were dismissed with costs.
-
1966 (3) TMI 103
Issues Involved:
1. Interpretation of Section 167(81) of the Sea Customs Act.
2. Admissibility of the appellant's statement to the Deputy Superintendent of Customs and Excise under Section 25 of the Indian Evidence Act.
Detailed Analysis:
1. Interpretation of Section 167(81) of the Sea Customs Act:
The appellant was prosecuted under Section 167(81) of the Sea Customs Act, read with Section 9 of the Land Customs Act. The High Court had disagreed with the Calcutta High Court's decision in Sitaram Agarwala v. State, holding that even persons not directly involved in the import of prohibited goods could be liable under Section 167(81). This view was in line with the Supreme Court's decision in Sachidananda Bannerjee v. Sitaram Agarwal, which clarified that Section 167(81) could encompass individuals not directly concerned with the import of prohibited goods. Consequently, the appellant's counsel admitted that the appellant would be guilty under Section 167(81) of the Sea Customs Act.
2. Admissibility of the Appellant's Statement under Section 25 of the Indian Evidence Act:
The appellant argued that the statement made to the Deputy Superintendent of Customs and Excise was inadmissible under Section 25 of the Indian Evidence Act, as the officer should be considered a police officer. The High Court had relied on the Supreme Court's decision in the State of Punjab v. Barkat Ram, which held that a Customs Officer under the Sea Customs Act was not a police officer within the meaning of Section 25 of the Evidence Act. The appellant, however, cited the decision in Raja Ram Jaiswal v. State of Bihar, where an excise officer under the Bihar and Orissa Excise Act was deemed a police officer.
The Supreme Court acknowledged the differing views among High Courts regarding the term "police officer" in Section 25. The broader view, supported by the Bombay High Court in Nanoo Sheikh Ahmed v. Emperor, suggested that any officer with investigative powers akin to those of a police officer could be considered a police officer. The narrower view, supported by the Patna High Court in Radha Kishun Marwari v. King-Emperor, confined the term to police officers properly so-called.
The Court examined the Central Excises and Salt Act, noting that its primary purpose was to levy and collect excise duties, with Central Excise Officers appointed for this purpose. These officers had powers of arrest and search to support their main function. Section 21 of the Act allowed Central Excise Officers to inquire into charges and exercise powers similar to those of an officer-in-charge of a police station during such inquiries. However, the Court noted that these powers did not include the authority to submit a charge-sheet under Section 173 of the Code of Criminal Procedure, distinguishing the case from Raja Ram Jaiswal.
The Court concluded that even under the broader view, a Central Excise Officer under the Act was not a police officer within the meaning of Section 25 of the Evidence Act. Consequently, the appellant's statement was admissible unless it was obtained by threats, which the High Court had already rejected under Section 24 of the Evidence Act. Therefore, the appellant's conviction was upheld, and the appeal was dismissed.
Conclusion:
The Supreme Court dismissed the appeal, affirming the interpretation of Section 167(81) of the Sea Customs Act and the admissibility of the appellant's statement under Section 25 of the Indian Evidence Act.
-
1966 (3) TMI 76
Issues Involved:
1. Legality of the seizure under Section 110(1) of the Customs Act.
2. Validity of the extension order under the proviso to Section 110(2) of the Customs Act.
3. Allegations of antedating the extension order.
4. Compliance with natural justice in extending the period for issuing a notice.
5. Constitutionality of the proviso to Section 110(2) under Article 19(1)(g) of the Constitution.
Issue-wise Detailed Analysis:
1. Legality of the Seizure under Section 110(1) of the Customs Act:
The petitioners argued that the seizure of gold was illegal as it was not made in the reasonable belief that the goods were liable to confiscation under the Customs Act. The court noted that the seizure was based on the belief that the gold was imported without a permit from the Reserve Bank of India, making it liable for confiscation under Section 111(d) of the Customs Act. The court held that the belief required for seizure under Section 110(1) is subjective and need not be disclosed. The petitioners did not allege that the officer lacked reasonable belief or that the belief was unreasonable. Thus, the court concluded that the seizure was legal.
2. Validity of the Extension Order under the Proviso to Section 110(2) of the Customs Act:
The petitioners contended that the extension order by the Collector of Customs was not made on the date it bore (August 18, 1963) but was antedated after the six-month period had expired. The court examined the circumstances and found no evidence to support the claim of antedating. It noted that the petitioners did not allege antedating in their initial communications and only raised the issue in the writ petitions. The court found the extension order valid as it was made within the permissible period.
3. Allegations of Antedating the Extension Order:
The petitioners alleged that the Collector of Customs antedated the extension order to make it appear as if it was made within the six-month period. The court scrutinized the surrounding circumstances and found no credible evidence to support this allegation. It emphasized that the delay in dispatching the order did not necessarily imply antedating. The court also referred to the Supreme Court's guidance on assessing such allegations based on probabilities and found the charge of antedating groundless.
4. Compliance with Natural Justice in Extending the Period for Issuing a Notice:
The petitioners argued that the extension order was made without hearing them, violating natural justice principles. The court held that the power to extend the period under the proviso to Section 110(2) is an administrative power. It does not require hearing the persons from whom the goods were seized. The court reasoned that involving the petitioners at this stage would be impractical and detrimental to the investigation. Therefore, the Collector was not obligated to state the grounds for extension in his order.
5. Constitutionality of the Proviso to Section 110(2) under Article 19(1)(g) of the Constitution:
The petitioners claimed that the proviso to Section 110(2), allowing the Collector to extend the period for issuing a notice, imposes an unreasonable restriction on their fundamental right to acquire, hold, and dispose of property under Article 19(1)(g). The court assessed the reasonableness of the restriction by considering the purpose of the Customs Act, which aims to prevent smuggling and punish smugglers. It noted that smuggling operations are complex and may require extended investigation periods. The court concluded that the proviso, which allows a maximum extension of six months, is a reasonable restriction in the public interest and is constitutional.
Conclusion:
The court dismissed the writ petitions, upholding the legality of the seizure, the validity of the extension order, and the constitutionality of the proviso to Section 110(2). The petitioners were ordered to pay the costs of the writ petitions.
-
1966 (3) TMI 18
Issues:
Partnership firms seeking exemption from excise duty under Notification No. 44 of 1962 for cotton fabrics. Interpretation of the proviso regarding exemption sharing among multiple processing factories owned by partners in the firms.
Analysis:
Two partnership firms filed writ petitions seeking a mandamus to direct the Collector of Central Excise to grant them exemption from excise duty for the first 20,000 sq. metres of cotton fabrics cleared in a month, as per Notification No. 44 of 1962. The first firm, M/s. Sivan Printing and Dyeing Factory, Erode, started with four partners in 1956, later continued with three partners. The second firm, M/s. Sivan Mahadevan Printing Mills, Erode, began with seven partners in 1960, increased to eight partners. Both firms obtained processing licenses from the Collector of Central Excise.
The Government of India issued a notification in 1962 exempting the first 20,000 sq. metres of cotton fabrics cleared in a month for home consumption from excise duty for processing factories. However, the proviso stated that if a person had proprietary interest in multiple processing factories, the exemption must be shared proportionally among all factories exceeding the 20,000 sq. metres limit. The petitioners argued that since three partners were common between the two firms, the proviso should not apply to them as partners in a partnership were not intended to be covered. The court disagreed, stating that every partner holds proprietary interest in a partnership, and if a partner is involved in multiple firms, the exemption sharing rule applies. The court rejected the contention that the notification only applied when the same individual owned interest in two factories, finding no such limitation in the proviso language. Consequently, the court dismissed both petitions, ruling against the petitioners' contentions.
-
1966 (2) TMI 20
Issues:
1. Conviction under section 9 of the Central Excise and Salt Act, 1944.
2. Appeal against acquittal of one respondent.
3. Liability of the respondent as an abettor under clause (d) of section 9.
Analysis:
Issue 1: Conviction under section 9 of the Central Excise and Salt Act, 1944
The case involved a complaint filed against the accused for contravening section 9 of the Act. The accused were found guilty of contraventions under clauses (a) and (b) of section 9 by the Magistrate. However, on appeal, the respondent Daya Shanker was acquitted by the Sessions Judge. The government appealed against this acquittal, arguing that the respondent was liable under clauses (a) and (b) of section 9. The court examined the contentions and ruled that the respondent could not be held liable under clause (a) as he was not deemed to be the owner as per rule 3 of the Central Excise Rules, 1944. The court also found no evidence linking the respondent to the removal of 80 bags of tobacco under clause (b), thereby upholding the acquittal of the respondent.
Issue 2: Appeal against acquittal of one respondent
The government advocate contended that the respondent could be held liable as an abettor under clause (d) of section 9. However, the court noted that the original complaint was vague and did not include allegations under clause (d) or intent to hold the respondent as an abettor. As such, the court declined to consider this argument, emphasizing that introducing a new theory of liability at this stage would prejudice the respondent's defense. The court highlighted the need for a fresh trial if liability as an abettor was to be established.
Issue 3: Liability of the respondent as an abettor under clause (d) of section 9
The court emphasized that the respondent had not been called upon to defend against liability as an abettor during the trial or appeal. Given the lack of prior focus on this aspect of liability, the court deemed it inappropriate to delve into this issue without affording the respondent a fair opportunity to defend against this new theory of liability. The court also considered the time elapsed since the alleged offense and subsequent acquittal, deeming it inappropriate to order a retrial in the circumstances.
In conclusion, the court dismissed the appeal, upholding the acquittal of the respondent and emphasizing the need for due process and fairness in establishing liability under the Central Excise and Salt Act, 1944.
-
1966 (1) TMI 17
Issues Involved:
1. Validity of the excise duty demand on destroyed tobacco.
2. Applicability of Rule 147 and Rule 149 of the Central Excise Manual.
3. Adequacy of inquiry into the accidental nature of the fire.
4. Requirement of formal notice under Rule 147.
5. Availability of an alternative remedy and its impact on the writ petition.
Issue-wise Detailed Analysis:
1. Validity of the Excise Duty Demand on Destroyed Tobacco:
The petitioners challenged the demand for Rs. 51,475.62 as excise duty on the entire stock of tobacco stored in the warehouse, which was destroyed by fire. The petitioners argued that the tobacco was either completely burnt or rendered unfit for use and thus should be exempt from duty under the relevant excise rules. The court examined the facts and found that the local Central Excise officer was present during the fire and supervised the destruction of the unfit tobacco. Consequently, the court held that no duty could be legally demanded from the petitioners for the destroyed tobacco.
2. Applicability of Rule 147 and Rule 149 of the Central Excise Manual:
Rule 147 allows for the remission of duty on goods lost or destroyed by unavoidable accident, while Rule 149 pertains to the destruction of unusable material. The court found that 582 maunds 35 seers of tobacco, which was rendered unfit for human consumption, was disposed of under the supervision of the local Central Excise officer, as per Rule 149. The remaining 706 maunds and 8 chhataks of tobacco were reduced to ashes by the fire, making Rule 147 applicable. The court emphasized that the Collector's discretion under Rule 147 must be exercised judicially and based on facts justifying the refusal to remit duty.
3. Adequacy of Inquiry into the Accidental Nature of the Fire:
The petitioners alleged that the Central Excise authorities did not properly investigate whether the fire was accidental. The court scrutinized the counter-affidavit, which claimed that detailed inquiries were made and the fire was not due to an unavoidable accident. However, the court noted that the counter-affidavit was not sworn according to the rules and lacked personal knowledge. Therefore, the court concluded that the petitioners' allegation that no proper inquiry was made remained unrebutted, and the conduct of the Central Excise officials indicated that they treated the fire as accidental.
4. Requirement of Formal Notice Under Rule 147:
The proviso to Rule 147 requires notice of the loss or destruction of goods in a private warehouse to be given to the officer-in-charge within 48 hours. The court held that since the local Central Excise officer was present during the fire, no formal notice was necessary. Thus, the petitioners were entitled to the benefit of Rules 147 and 149, and no duty could be legally demanded from them.
5. Availability of an Alternative Remedy and Its Impact on the Writ Petition:
The opposite parties argued that the petitioners should have pursued their appeal before the Collector, which they did not do due to the requirement to deposit the demanded duty. The court referred to the Supreme Court's decision in Himantlal Harilal Mehta v. State of Madhya Pradesh, which held that the existence of an alternative remedy does not bar a writ petition when a fundamental right is alleged to be infringed. The court found that the demand for over Rs. 51,000 was an infringement of the petitioners' fundamental rights, making the alternative remedy inadequate. Therefore, the writ petition was not barred.
Conclusion:
The court allowed the writ petition, quashing the order of the Collector of Central Excise dated June 20, 1960, and the subsequent demand notice. The petitioners were awarded costs from the opposite parties.
-
1965 (11) TMI 21
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.
-
1965 (11) TMI 20
Issues:
Claim of illegal demands for excise duty exemption under Central Excise and Salt Act, 1944.
Analysis:
The case involved a dispute regarding excise duty exemption under the Central Excise and Salt Act, 1944. The petitioners, who were manufacturers of pigments, colours, paints, enamels, varnishes, blacks, and cellulose lacquers, claimed that demands for excise duty were illegal as they were not granted the exemption provided by government notifications. The exemption was based on specific quantities of goods manufactured by small manufacturers. The petitioners began manufacturing in 1958 without obtaining a license under the Act, and demands were issued for excise duty on their production during certain periods. The Department contended that the statutory exemption could only be enjoyed by manufacturers operating under proper excise control, which included obtaining a license as required by Section 6 of the Act.
The Court examined the provisions of the Act and the rules framed under it. Section 3 of the Act provided for the levy and collection of excise duties, while Section 6 mandated obtaining a license for manufacturing excisable goods. Rule 9 outlined the procedure for payment of duty and required obtaining permission before removing goods from the manufacturing premises. The petitioners had not obtained a license during the relevant period and had removed goods without paying the excise duty. The Court noted that the grant of exemption must be in accordance with the notification provisions and that exemptions are to be strictly construed.
Regarding the government notifications providing exemptions, the Court analyzed the language and intent of the notifications issued in 1956 and 1960. The 1960 notification granted exemption only for goods cleared for home consumption, and the liability to pay duty arose at the time of clearance. The Court emphasized that the exemption could only be claimed at the time of clearance when duty was paid. Since the petitioners had not paid duty at the time of clearance and the demands were made under Rule 10A, the claim for exemption was deemed invalid. Similarly, the 1956 notification exempted goods if the total output did not exceed 50 tons, but the duty exemption was tied to the time of clearance. As the petitioners had not paid duty at the time of clearance, their claim under this notification also failed.
Ultimately, the Court dismissed the petitions, ruling against the petitioners' claim for excise duty exemption. No costs were awarded in the case.
-
1965 (11) TMI 19
Issues Involved:
1. Determination of value for duty under the Central Excise and Salt Act, 1944.
2. Validity of notices of demand under Rule 10A of the Central Excise Rules.
3. Provisional assessment under Rule 10B of the Central Excise Rules.
4. Limitation under Rule 10 of the Central Excise Rules.
Detailed Analysis:
1. Determination of Value for Duty under the Central Excise and Salt Act, 1944:
The petitioners, manufacturers of rubber and canvas goods, including shoes, were subject to excise duty under the Finance Act, 1954. The value for duty purposes was to be determined as per Section 4 of the Central Excise and Salt Act, 1944. This section specifies that the value should be the wholesale cash price at the factory or nearest market. The petitioners argued that their sales to Messrs. Santlal Bansidhar were at the correct wholesale cash prices and that Santlal Bansidhar was not their sole selling agent but an outright purchaser. The court noted that the respondents failed to prove that Messrs. Santlal Bansidhar was a wholesale market or the sole selling agent, thus making the prices charged by Santlal Bansidhar irrelevant for duty assessment.
2. Validity of Notices of Demand under Rule 10A of the Central Excise Rules:
The petitioners received multiple notices of demand for short-levied duty under Rule 10A, which they contested on grounds of lack of opportunity to show cause. The respondents claimed the demands were based on differences between prices charged by Santlal Bansidhar and the petitioners. The court held that since Messrs. Santlal Bansidhar were not proven to be the sole selling agents or part of a wholesale market, the demands based on their prices were invalid.
3. Provisional Assessment under Rule 10B of the Central Excise Rules:
The respondents argued that the assessments were provisional, pending final verification of prices. The petitioners denied this, stating that all assessments prior to May 22, 1958, were final. The court examined endorsements on A.R. 1 forms and found no evidence of provisional assessments before May 22, 1958. The court concluded that the story of provisional assessment was negated by the endorsements and the lack of a bond before May 22, 1958.
4. Limitation under Rule 10 of the Central Excise Rules:
The petitioners argued that the demands were barred by the three-month limitation period prescribed by Rule 10. The court agreed in part, finding that some periods covered by the notices were indeed barred by limitation. Specifically, parts of the periods from October 1, 1957, to December 31, 1957, and from December 17, 1956, to June 3, 1958, were barred. However, the period from January 1, 1958, to December 31, 1958, was not barred.
Conclusion:
The court quashed the demands based on the prices charged by Messrs. Santlal Bansidhar, as these prices were irrelevant for duty assessment. The theory of provisional assessment was also rejected for the bulk of the goods covered by the demands. The court directed the respondents to re-adjust the petitioners' current account accordingly and made no order as to costs.
-
1965 (11) TMI 17
Issues Involved:
1. Whether the manufacture of wireless sets was completed prior to 1st March 1961, thereby exempting them from excise duty.
2. Constitutionality of the Central Excise Rules and the delegation of legislative powers.
3. Whether the refusal to grant a personal hearing at the revision stage violated principles of natural justice.
Issue-Wise Detailed Analysis:
1. Completion of Manufacture Prior to 1st March 1961:
The petitioner argued that the wireless sets were fully manufactured before 1st March 1961 and thus not subject to excise duty under the new item 33A inserted in the First Schedule to the Central Excises and Salt Act, 1944. However, an inspection on 9th March 1961 revealed that 1186 radio sets were in a dismantled condition, with several components not yet assembled. The Superintendent of Central Excise concluded that the manufacture was not completed prior to 1st March 1961, and excise duty was payable. This decision was upheld by the Collector of Central Excise and the Central Government in revision.
2. Constitutionality of the Central Excise Rules and Delegation of Legislative Powers:
The petitioner contended that the provision of the machinery for assessment and collection of excise duty was a legislative function that had been unconstitutionally delegated to the Central Government. The court rejected this argument, stating that Article 265 of the Constitution uses the term 'law,' which includes rules made under an Act of the Legislature. The court noted that the Act provided sufficient guidance for rule-making, including the definition of 'manufacture' in Section 2(f) and principles for determining the value of goods in Section 4. The court also highlighted that rules must be laid before Parliament, ensuring legislative oversight.
3. Refusal to Grant Personal Hearing at Revision Stage:
The petitioner argued that the refusal to grant a personal hearing at the revision stage violated the principle of natural justice, specifically the rule of audi alteram partem. The court agreed, citing Supreme Court precedents that required quasi-judicial authorities to provide a reasonable opportunity for a hearing. The court emphasized that the question of whether the manufacture of a wireless set was complete is a mixed question of law and fact, necessitating a personal hearing.
Conclusion:
The court quashed the orders of the Superintendent of Central Excise dated 13th March 1961 and 17th March 1961, the appellate order of the Collector of Central Excise dated 30th June 1961, and the order of the Central Government dated 21st December 1961. The Collector of Central Excise was directed to rehear the appeal after giving the petitioner a reasonable opportunity to represent their case. There was no order for costs.
-
1965 (10) TMI 84
Issues Involved:
1. Validity of the 1333-F Act post-introduction of the Dangerous Drugs Act, 1930, and the Drugs Act, 1940.
2. Intra vires status of the Andhra Pradesh (Telangana Area) Chloral Hydrate (Chloral) Rules, 1962, under the amended 1333-F Act.
3. Classification of chloral hydrate as a narcotic drug or intoxicating drug under the relevant legislative entries.
Detailed Analysis:
1. Validity of the 1333-F Act post-introduction of the Dangerous Drugs Act, 1930, and the Drugs Act, 1940:
The appellant contended that the 1333-F Act was repealed by the introduction of the Dangerous Drugs Act, 1930, and the Drugs Act, 1940, through subsequent legislation. The court analyzed the legislative competence and the scope of these Acts. It was noted that the 1333-F Act, which was in force in Hyderabad since 1924, dealt primarily with excise duties on intoxicating drugs, including opium and other substances that could be notified by the government. The Dangerous Drugs Act primarily dealt with the prohibition and control of certain drugs but did not cover the excise aspect. Similarly, the Drugs Act focused on the standard and quality of drugs and did not pertain to excise duties. The court held that the introduction of these Acts did not result in the complete effacement of the 1333-F Act, which remained valid for the purpose of excise duties on intoxicating drugs and could be amended by the Hyderabad Act No. 22 of 1953.
2. Intra vires status of the Andhra Pradesh (Telangana Area) Chloral Hydrate (Chloral) Rules, 1962, under the amended 1333-F Act:
The appellant argued that the Rules framed in 1962 were not within the powers conferred by the amended 1333-F Act. The court examined the amended Act, which defined "intoxicating drugs" to include any substance notified by the government as an intoxicating drug, provided it was not opium, coca leaf, or a manufactured drug as defined in the Dangerous Drugs Act. The amended Act was primarily an excise Act, allowing the state to impose excise duties on notified substances. Chloral hydrate was notified as an intoxicating drug under the amended Act, and the Rules were framed accordingly. The court found that the Rules, which provided for the manufacture, possession, sale, import, export, and transport of chloral hydrate, were intra vires the amended Act.
3. Classification of chloral hydrate as a narcotic drug or intoxicating drug under the relevant legislative entries:
The court considered whether chloral hydrate could be classified as a narcotic drug or intoxicating drug under entry 51 of List II of the Seventh Schedule to the Constitution. The appellant admitted that chloral hydrate was used as a hypnotic and sedative, which fits the dictionary definition of a narcotic. The court also noted that chloral hydrate increased intoxication when mixed with liquor, supporting its classification as an intoxicating drug. The court rejected the appellant's reliance on the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, noting that chloral hydrate was not classified as a medicinal preparation under this Act and that the appellant had not raised this argument before the High Court.
Conclusion:
The Supreme Court dismissed the appeal, upholding the validity of the 1333-F Act post-introduction of the Dangerous Drugs Act and the Drugs Act, confirming the intra vires status of the Andhra Pradesh (Telangana Area) Chloral Hydrate (Chloral) Rules, 1962, and affirming the classification of chloral hydrate as a narcotic and intoxicating drug under the relevant legislative entries. The appeal was dismissed with costs.
-
1965 (9) TMI 49
Whether the petitioner is justified in challenging the validity of provision of of the Motor Vehicles Act, 1939?
Held that:- As a consequence of this conclusion, it follows that the petitioner is entitled to claim that the tax assessed against him in respect of his vehicles for the period between 26th March, 1962and the 9th September, 1964 at the enhanced rates is invalid, and that the taxing authorities concerned will have to levy the tax at the rates prescribed by the notification issued on the 30th April, 1959 under s. 3 of the principal Act as it originally stood.
It is true that this result sounds very anomalous, because for the period immedeately preceding the period in question, the tax is validly recoverable at the enhanced rates, whereas for the period in question, it has to be recovered at a lower Tate; but, for this anomaly, the defective drafting of S. 2 and s. 4 of the Act is entirely responsible. Appeal partly allowed.
-
1965 (9) TMI 48
Whether the enhancement of the levy by notification dated March 31, 1961 insofar as it enhanced the levy from ₹ 40 to ₹ 70 per L.P. Gillon infringes any constitutional probibitions?
Whether the original duty alone would be sustained or also the enhanced duty which was introduced in 1961?
Held that:- The adaptation made the Act valid vis-a-vis the Government of India Act, 1935. When the Act was valid, the notification issued in 1937 was also valid. The Excise Acts, as adapted, continued to be law under the Government of India Act, 1935. The present Constitution has made no change either in the distribution of legislative power or the entries and has further said in Art. 372 that all existing laws continue to be of full force and effect. The imposition of countervailing duty at ₹ 40 per London proof gallon continued to be valid.
If the old duty it the old rate is sustainable there is no reason why the absence of production of foreign liquor in the State would make any difference to the enhancement of the duty to ₹ 70 per London proof gallon. So long as the Act is valid, and that is beyond doubt, the notification can be changed. The duty could always be made less and there is no reason why it could not be made more provided the imposition of duty on locally produced goods was not made lower. If production of foreign liquor is not a condition precedent to the validity of the Act because of historical reasons there is no bar to the validity of the notification which takes its force from the valid Act. Appeal dismissed.
-
1965 (9) TMI 13
It is not clear how the figure of 46.8534 M.T. was reached on which differential duty was ordered to be refunded
Held that:- The order under appeal must be set aside because there was no fair opportunity to the Company to represent its case. We accordingly set aside the order of the Government and send back the case to Government for decision after affording the Company a fair opportunity of making such submissions on the material in the possession of Government, as it may choose to make
-
1965 (6) TMI 4
Issues Involved:
1. Liability for export duty and cess due to loss of goods during transit.
2. Validity and enforcement of the bond executed by the respondent.
3. Jurisdiction of the High Court to issue writs against the Union of India under Article 226 of the Constitution.
Detailed Analysis:
1. Liability for Export Duty and Cess Due to Loss of Goods During Transit:
The respondent, owner of Atiabari Tea Estate, sent tea to Calcutta via a route passing through Eastern Pakistan. The consignment was lost when the steamer sank in Pakistan. The Central Excise Department demanded export duty and cess, which the respondent contested, arguing that no duty was payable due to the total loss of goods. The court noted that the Union of India admitted the loss in its written statement, making any further demand for duty and cess frivolous. The court held that the respondent was not liable for export duty or cess as there was no sufficient evidence of loss of cargo arising from the sinking of the steamer.
2. Validity and Enforcement of the Bond Executed by the Respondent:
The respondent executed a bond guaranteeing to pay duty and cess if there was short delivery. The court acknowledged that the bond was a contract between the parties. However, it emphasized that the bond's terms contemplated that if a sufficient explanation was provided for short delivery, the respondent would not be held liable. Given the admitted total loss of goods, the court concluded that the bond's terms could not be enforced against the respondent, as the explanation of loss was conclusive.
3. Jurisdiction of the High Court to Issue Writs Against the Union of India Under Article 226 of the Constitution:
The appellant argued that the High Court had no jurisdiction to issue a writ against the Union of India when the Rule Nisi was issued in 1955, as the Fifteenth Amendment to the Constitution, which conferred such jurisdiction, came into force in 1963. The court, referencing decisions from other High Courts and its own Full Bench, held that the amendment was procedural and retrospective. Therefore, the High Court had jurisdiction to issue writs against the Union of India in this pending case, and the writ of Mandamus issued by Sinha J. was upheld.
Conclusion:
The appeal was dismissed, affirming that the respondent was not liable for export duty and cess due to the total loss of goods, and the bond's terms could not be enforced. The High Court's jurisdiction to issue writs against the Union of India was upheld based on the retrospective application of the Fifteenth Amendment to the Constitution. Each party was ordered to bear its own costs.
-
1965 (5) TMI 2
Issues:
1. Violation of Central Excise Rules regarding non-payment of excise duty on mustard oil.
2. Challenge against the penalty and duty imposed by the petitioner.
3. Application for instalments in payment of imposed duty.
4. Detention of goods under Rule 230 of the Central Excise Rules.
5. Petition under Article 226 of the Constitution challenging the detention of goods.
6. Argument of discrimination and violation of Article 14 of the Constitution regarding Rule 230.
7. Analysis of Rule 230 and Section 11 of the Central Excises and Salt Act.
8. Interpretation of the term "exacting such duty" in Rule 230.
9. Deposit of a sum by the petitioner with the Registrar and its appropriation towards outstanding excise duty.
Analysis:
The petitioner, conducting business as 'Mahakali Oil Mills,' was found to have removed mustard oil without paying excise duty, in violation of Central Excise Rules. The Assistant Collector held the petitioner liable for the duty and imposed a penalty. Despite challenging the duty and penalty, the petitioner paid the penalty and sought instalments for the duty. After making partial payments, the petitioner stopped and received a notice for non-payment, leading to the detention of goods under Rule 230. The petitioner moved the High Court under Article 226, challenging the detention and seeking relief through a writ of Mandamus and Prohibition.
The petitioner argued that Rule 230 was discriminatory and violated Article 14 of the Constitution, comparing it to Section 11 of the Central Excises and Salt Act. However, the Court ruled that Rule 230 was a method to compel payment and secure assets for duty recovery, not an alternative to Section 11. The Court highlighted that Rule 230 applies to all defaulters and is a recognized power for duty realization, dismissing the discrimination claim.
The Court also noted the term "exacting such duty" in Rule 230, clarifying its meaning as compelling payment rather than extortion. The judgment advised revising the language of Rule 230 for clarity. The petitioner had deposited a sum with the Registrar, which could be appropriated towards the outstanding duty, subject to the final decision on the adjudication order. The Court discharged the Rule without costs, allowing the petitioner to pay the outstanding amount to avoid further action under Rule 230.
-
1965 (3) TMI 16
Issues Involved:
1. Classification of mustard oil under the Central Excises and Salt Act, 1944.
2. Validity of the expression 'Vegetable Non-essential Oils' in the context of mustard oil.
3. Application of the principle of interpreting taxing statutes in favor of the assessee.
Issue-wise Detailed Analysis:
1. Classification of Mustard Oil under the Central Excises and Salt Act, 1944:
The primary issue was whether mustard oil falls within the classification of 'Vegetable Non-essential Oils' as per the First Schedule to the Central Excises and Salt Act, 1944. The Finance Act, 1956, amended the Central Excises and Salt Act, 1944, adding 'Vegetable Non-essential Oils' to the First Schedule. The petitioners, who produced mustard oil using power-driven machinery, were required to comply with the new excise duty regulations starting from March 1, 1956. Despite compliance, the petitioners later contended that mustard oil should not be classified as a non-essential oil. The court, however, concluded that mustard oil, being a fixed oil, could be rightfully classified under 'Vegetable Non-essential Oils' since it does not fall under the category of essential oils, which are defined as volatile and odoriferous bodies obtained from vegetable sources.
2. Validity of the Expression 'Vegetable Non-essential Oils' in the Context of Mustard Oil:
The petitioners argued that the term 'Vegetable Non-essential Oils' was vague and indefinite, making it inapplicable to mustard oil without further specification. The court examined the chemical definitions and distinctions between essential and non-essential oils, referencing authoritative texts such as the Encyclopaedia of Chemical Technology and Guenther's book on 'Essential oils'. The court determined that the expression 'Vegetable Non-essential Oils' was not vague and was applicable to fixed or fatty oils derived from mustard seeds. The court found that mustard oil, being a non-volatile fixed oil, fits within the classification of non-essential oils despite its essential use as a cooking medium.
3. Application of the Principle of Interpreting Taxing Statutes in Favor of the Assessee:
The petitioners invoked the principle that any ambiguity in a taxing statute should be resolved in favor of the assessee. The court acknowledged this principle, citing precedents from the House of Lords and the Supreme Court of India. However, the court concluded that there was no ambiguity in the term 'Vegetable Non-essential Oils' that would exclude mustard oil from its scope. The court noted that the expressions 'essential oils' and 'non-essential oils' were well-established in statutory language and chemical terminology. Consequently, the court held that the benefit of the doubt principle did not apply in this case.
Conclusion:
The court discharged the Rule with costs, holding that mustard oil is correctly classified as a 'Vegetable Non-essential Oil' under the Central Excises and Salt Act, 1944. The petitioners' arguments were found to be without merit, and the court directed the respondents to calculate the excise duty due up to March 1, 1963, and refund any excess amount deposited by the petitioners. The court also addressed similar points raised in related cases, dismissing them without costs and directing appropriate refunds of any excess amounts held by the respondents.
-
1965 (3) TMI 14
Issues:
Challenge to validity of order passed by Collector of Central Excise under Central Excises and Salt Act, 1944. Dispute over the basis for assessing excise duty on pharmaceutical products. Claim for deduction of trade discount and quantity discount in excise duty assessment.
Analysis:
The petitioners, a firm manufacturing pharmaceutical products, challenged an order by the Collector of Central Excise imposing a 10% ad valorem duty on their products under the Central Excises and Salt Act, 1944. The main contention was regarding the basis for assessing excise duty, with petitioners arguing for using their sale prices to distributors as the basis, rather than the prices at which distributors sold to wholesale dealers. Another issue raised was the denial of certain deductions, particularly trade discount, by the authorities. The petitioners claimed that the trade discount should be allowed as per the Explanation to Section 4 of the Act.
The authorities held that the wholesale market for assessment was in Bombay, not mofussil places, and that the trade discount referred to in Section 4 was a cash discount, not gifts in kind. The court examined the concept of trade discount, emphasizing that it must operate as a deduction from the price payable by the purchaser. While gifts given by distributors were not considered trade discounts, the court found no reason to deny a deduction for quantity discount, as it effectively reduced the price charged to purchasers. The court clarified that a trade discount need not always be in monetary form and could include deductions in the form of goods.
The court directed the authorities to reconsider the petitioners' claim for deduction for quantity discount, as it could amount to a trade discount. The authorities were instructed to modify the order if necessary based on established facts. If any refund became due to the petitioners as a result, it should be processed accordingly. The petition was dismissed, with costs to be borne by the petitioners.
-
1965 (1) TMI 3
Issues Involved:
1. Provisional Assessment of Goods
2. Applicability of Rule 9B of the Central Excise Rules, 1944
3. Validity of Demand Notices under Rule 10 and Rule 10A of the Central Excise Rules, 1944
4. Time Limitation for Demand of Short-levied Duty
Issue-wise Detailed Analysis:
1. Provisional Assessment of Goods:
The primary question was whether the goods were assessed on a provisional basis. The petitioner company contended that the assessments were final and not provisional. The court noted that the abstracts of the Personal Ledger Accounts did not indicate that duties were imposed on a provisional basis. The court found it significant that the respondent No. 2 Inspector had marked certain A.R. 1 forms as "Provisional" after the fact, which was not originally the case. This action by the Inspector suggested an attempt to retroactively impose a provisional status on the assessments.
2. Applicability of Rule 9B of the Central Excise Rules, 1944:
The petitioner argued that Rule 9B, which deals with provisional assessment, was not applicable as there was no request for provisional assessment, nor was there any execution of a B-10 or B-13 Bond at the material time. The court examined Rule 9B and found that the circumstances required for its application-such as the assessment involving two or more alternative bases or a request for provisional assessment-were absent. The bond executed by the petitioner on September 26, 1962, was found to be irrelevant to the assessments for the period from July 1961 to April 1962.
3. Validity of Demand Notices under Rule 10 and Rule 10A of the Central Excise Rules, 1944:
The court had to determine whether the demands for differential duty could be justified under Rule 10 or Rule 10A. Rule 10 deals with recovery of duties short-levied due to inadvertence, error, or misstatement, with a time limit of three months. Rule 10A is a residuary provision for recovery of sums due to the government where no specific rule applies. The court concluded that the case fell under Rule 10 because the alleged short-levy was due to misstatements regarding the value of the goods. Therefore, Rule 10A was not applicable.
4. Time Limitation for Demand of Short-levied Duty:
The court noted that under Rule 10, any demand for short-levied duty had to be made within three months from the date the duty was paid or adjusted in the owner's account. Since the demands were made beyond this three-month period, they were not sustainable. The court referenced its previous ruling in National Tobacco Co. of India Ltd. v. Assistant Collector of Central Excise, which supported this interpretation.
Judgment:
The court made the Rule absolute, quashing the notices of demand and restraining the respondents from enforcing them. The current account of the petitioner company was to be readjusted if any debits had been made in respect of the sums covered by the notices. A Writ of Certiorari and a consequential Writ of Mandamus were issued accordingly. No order as to costs was made.
-
1964 (11) TMI 119
Issues Involved:
1. Jurisdiction of the Superintendent of Central Excise to issue a fresh notice after the appellate order.
2. Legality of the fresh notice issued under Rule 9(2) and Rule 226 of the Central Excise Rules, 1944.
3. Finality of the appellate order under Section 35 of the Central Excise and Salt Act, 1944.
4. Validity of the departmental communication and its effect on the appellate order.
Detailed Analysis:
1. Jurisdiction of the Superintendent of Central Excise to Issue a Fresh Notice:
The petitioner challenged the fresh notice dated January 13, 1961, issued by the Superintendent of Central Excise on the grounds of jurisdiction. The petitioner argued that the appellate order passed on November 2, 1960, had become final, and in the absence of any remand order, the Superintendent could not legally issue a fresh notice on the same grounds. The respondents contended that the Deputy Collector had directed a de novo adjudication because Rule 9 was not included in the original show cause notice, and the petitioner was not given an opportunity to be heard on that point.
2. Legality of the Fresh Notice Issued Under Rule 9(2) and Rule 226:
The fresh notice was issued on the grounds of variations between the R.G. 1 records and the folding reports, alleging contravention of Rule 9(2) and Rule 226. The petitioner argued that this was without jurisdiction as the appellate order had already quashed the original demand and penalty. The respondents argued that the fresh notice was legal and competent due to the remand order, which was a part of the appellate order.
3. Finality of the Appellate Order Under Section 35:
Section 35(2) of the Central Excise and Salt Act, 1944, provides that every order passed in appeal shall be final, subject to the power of revision conferred by Section 36. The petitioner argued that no revision application was filed, making the appellate order final. The respondents contended that the appellate order included a direction for de novo adjudication, which was communicated to the Superintendent.
4. Validity of the Departmental Communication and Its Effect on the Appellate Order:
The appellate authority's order dated November 2, 1960, did not explicitly mention a remand for de novo adjudication. However, a post-script dated November 5, 1960, directed the Superintendent to adjudicate the case de novo. The petitioner argued that this post-script was a mere departmental communication and not part of the judicial order. The respondents claimed it was a composite order, and the de novo adjudication direction was valid.
Conclusion:
The court held that the appellate order dated November 2, 1960, was final and did not include any remand for de novo adjudication. The post-script dated November 5, 1960, was considered a departmental communication and not part of the judicial order. Therefore, the Superintendent of Central Excise had no jurisdiction to issue the fresh notice dated January 13, 1961. The court quashed the impugned notice and prohibited any proceedings in pursuance thereof. The petition was allowed, and the rule made absolute with costs.
............
|
9911796707
