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TMI Blog1979 (8) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and be bound by the various rules and regulations in the matter of storage of the tobacco which is admittedly excisable and for removal of such excisable commodity from the bonded warehouse. We are narrating the relevant facts in W.P. No. 4328 of 1975. The stock in the warehouse of the above petitioners was checked and weighed on 17-6-1975. Though the entries in the stock books and accounts were found to be in order on physical verification, an apprehension was entertained in the minds of the Excise Officials that in certain lots, the variety of tobacco found at the time of the check may not correspond to those that should have been actually in stock in the warehouse according to the description in the relevant stock records and other documents. Entertaining a suspicion that there has been an illicit removal and a clandestine replacement of an inferior quality of tobacco, samples were drawn from the stock in the warehouse on the date of inspection and, as is the common practice, the samples were examined by a trade panel for ascertaining whether or not the tobacco found in these lots were the same as the ones that should have been in stock as per the earlier description. Appreh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , read with Rules 144 and 151 to take such action as is necessary in a particular case and according to circumstances and therefore it is said that the taking of samples is to achieve the object of the Act and in pursuance of the rules made thereunder and such a provision not being unreasonable but in the interests of the revenue of the State is sustainable in law and the writ of prohibition sought for by each of the appellants is without any justification whatsoever. 4. Before considering the objections of the writ petitioners, it is necessary to refer succinctly to the Central Excises and Salt Act, 1944 and the Rules made thereunder. The Central Excises and Salt Act and the Customs Act of 1962 are twin enactments subserving similar objectives, the primary intendment of both being to check evasion of excise duty or customs duty. These enactments being quasi-fiscal and quasi-penal in nature have to be interpreted strictly. Under Section 12 of the Central Excises and Salt Act, the Central Government may by a notification in the Official Gazette declare that any of the provisions of the Customs Act relating to the levy of Customs duty, warehousing, offences, confiscation procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy and collection of duties imposed by this Act on any excisable goods. Rule 144 of the Central Excise Rules 1944, imposes a ban on the warehouse keeper not to take any goods out of the warehouse unless so permitted by the statutory authorities. Rule 151 provides for offences with respect to warehousing. It says - "151. Offences with respect to warehousing :- It the owner of goods warehoused, or the warehouse keeper, by himself or by any person in his employ or with his connivance, commits any of the following offences,- (a) ......... (b) ......... (c) warehouses goods in, or removes goods from, a warehouse otherwise than as provided by these rules ..... (d)......" he is said to have committed an offence and he shall be liable to a penalty besides all the goods warehoused, removed or concealed in contravention of this rule shall be liable to confiscation. Rule 223-A enables the Collector to take an account of goods in a warehouse at least once in every year. No doubt, this rule lays an accent on the quantity warehoused but does not expressly refer to the quality of the goods. 5. It may be necessary also to rule, to refer 56 which has been relied upon by the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read in conjunction with the intendment of the Legislature to penalise the licence holder for any of the contraventions of the provisions of the Act or the Rules made thereunder. Rule 144 of the Rules lays an embargo on the warehouse keeper from removing the goods from any warehouse except on payment of duty. Rule 151 of the Rules provides for the imposition of a penalty as also confiscation, if it is found that the warehouse keeper or his agent warehouses goods in or removes goods from a warehouse otherwise than as provided for by these rules. Rule 223-A is a processual provision which envisages the levy of a penalty, where it is found that there is a deficiency in the weight of the commodity. The cummulative effect of this enforcement provisions which are quasi-penal in nature read with the object of the enactment which is to consolidate the law relating to Central Excise duties and which is factually a statutory instrument preventing evasion of tax, is that these runs in the vein of this statute a power in the Excise authorities to take such actions as the circumstances of a case demands, in order to avoid evasion of tax. If, as in the instant case, suspicion is entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l entry into the warehouse, cannot seize a much smaller quantity for purposes of substantiating that there has been a substitution in the goods. The substitution might result in evasion of tax because there are varied rates of duties according to the quality of tobacco. Weight of course is one of the incidents for consideration but quality, having regard to the nature and variety of duties according to the quality of the tobacco, is also equally an essential ingredient to detect unauthorised substitution. It is in this context that reliance is placed upon Rule 56. Rule 56 is a special rule touching upon the taking of samples of any manufactured or partly manufactured goods. The sense behind this rule is easily understandable. In the case of manufacturer, he may claim that certain excisable commodities have been used. In order to satisfy themselves that there has been a use of the authorised percentage of excised goods in the manufactured commodity, a specific provision is made for sample of those goods. This would not, however imply that the excise authorities in the course of their investigation who detect the commission of any offence, are precluded from taking samples of excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are unable to accept the contention of the appellants that no threat of arrest could be extended to them. 10. The last but feeble contention of the learned Counsel for the appellants was that analysis of the samples by a panel of traders, who are in fact competitors in the profession is unauthorised. As pointed out by Koshal J. it is for the authorities to determine as to what sort of evidence would be sufficient to support the intended prosecution or further statutory action. If the prosecution is laid on the basis of the opinion of the panel and if the Court accepts it, then the appellants can have no complaint. The methodology to be adopted by the investigating agency in order to sustain their conviction and belief that an offence has been committed under the Central Excise Act cannot be challenged in these proceedings. 11. The writ of prohibition is an extraordinary writ which could be asked for only in cases where there is a total absence of jurisdiction in the authority to take action or where there is an open excessive exercise of such jurisdiction. Neither of these two primordial conditions which would prevent an authority from taking action under the appropriate ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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