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TMI Blog1978 (3) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, a sample of the said quantity of paper removed by the respondent from its factory was drawn by the Central Excise Authorities for the purpose of chemical test. The Assistant Collector of Central Excise, Asansol Division, by his letter dated August 6, 1963, informed the respondent that the said sample was found to be Bond paper without any watermark and, as such, was assessable under Item 17(2) of the First Schedule to the Act. The respondent preferred an appeal against the finding as contained in the said letter of the Collector of Central Excise. The appeal was dismissed. Thereafter, the respondent preferred a revisional application to the Central Government which has since been dismissed. During the pendency of the said revision case before the Central Government, the respondent received a notice of demand under Rule 10A of the Central Excise Rules, 1944, hereafter referred to as the Rules. In the said notice of demand, it was inter alia alleged that as the said quantity of paper removed by the respondent from its factory during the above period was found on a chemical retest to be Bond paper, the respondent was liable to pay excise duty under Item 17(2) of the First Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand was made under the authority of law, it is not correct to say that the respondent was sought to be deprived of its property without such authority. In support of this contention, it is argued that the appellants were entitled to claim excise duty under the provision of Rule 9(2) of the Rules. We are, however, unable to accept this contention. The impugned notice of demand has been issued by the appellants under Rule 10A and not under Rule 9(2). Moreover, Rule 9(2) relates to removal of excisable goods without any assessment and payment of excise duty in contravention of sub-rule (1). In N.B. Sanjana v. The Elphinstone Spinning and Weaving Mills Co. Ltd. [1978 E.L.T. (J 399)], it has been laid down by the Supreme Court that in order to attract sub-rule (2), the goods should have been removed clandestinely and without assessment. lt is however, not the case of the appellants that the goods have been removed clandestinely or without any assessment. Rule 9(2) has, therefore, no manner of application. 4. It is next contended on behalf of the appellants that the respondent, which is a company, has no fundamental right as held by the Supreme Court in State Trading Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rined in the said article. If that is so, the plea under Article 31(1) as well as under Article 14 cannot be sustained for the simple reason that in supporting the said two pleas, inevitably the appellant has to fall back upon the fundamental right guaranteed by Article 19(1)(f)." Relying on the said observation, it is argued on behalf of the appellants before us that in order to avail itself of the provision of Article 31(1) of the Constitution, the respondent has to fall back upon Article 19(1) (f) and (g) of the Constitution or, in other words, the respondent must be a citizen of India having fundamental rights under Article 19(1) of the Constitution. This contention is wholly misconceived and does not arise in the facts and circumstances of the case. In the case before the Supreme Court the appellant, which was a foreign company challenged the constitutional validity of the provision of Section 52A of the Sea Customs Act on the ground that the said provision infringed its fundamental right guaranteed under Article 19(1) (f) of the Constitution. It was pointed out by the Supreme Court that as the appellant was not a citizen, it had no fundamental right as conferred on the citiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled upon to pay the differential amount of excise duty. 8. The impugned notice of demand was admittedly issued beyond the period of three months as prescribed by Rule 10. There can be no doubt that if Rule 10 applies it must be held that the demand was barred. It is, however, contended on behalf of the appellants that as the respondent had suppressed the fact that the papers in question were Bond papers or, in other words, the respondent having wilfully made a mis-statements to the description of the goods, Rule 10A and not Rule 10 applied. Under Rule 10, one of the grounds for short-levy of excise duty is mis-statement as to the description of the goods. It is argued by the appellants that 'mis-statement' as contemplated by Rule 10 is a bona fide mis-statement and not a deliberate or wilful mis-statement or one based on deliberate suppression of facts. It is contended that the respondent deliberately suppressed the fact that the papers that were removed were Bond papers and made a mis-statement about the same in the said applications. It is difficult for us, nor is it within the scope of this appeal, to embark on the adjudication of the question whether the goods were of a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal side Appeal No. 69 of 1963-disposed of on 1st/2nd July, 1965) which was challenged before the Supreme Court in the case N.B. Sanjana v. The Elphinstone Spinning and Weaving Co. Ltd. referred to above. It was held by the Bombay High Court that the word 'mis-statement' would include not only innocent but even fraudulent mis-statements. 10. Much reliance has been placed on behalf the appellants on a Bench decision of the Gujarat High Court in Shri Dinesh Mills Ltd. v. Union of India, 1974 (2) Tax LR 2313. What happened in that case was the' certain fabrics were brought by the plaintiff company from a weaving factory with the permission of the Collector of Central Excise who had already exempted the goods in question from payment of duty. For subsequent years also full duty was not charged on the ground that the goods in question were no manufactured by the plaintiff. It was subsequently found that the plaintiff had obtained permission by misrepresentation and by concealing certain facts, and demand notices for payment of excise duty were issued by the Excise authorities under Rule 10A of the Rules. The Gujarat High Court, while holding that Rule 10A would apply observed that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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