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TMI Blog1978 (12) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1972 was issued on the alleged ground that overweight was found by inspection group by the inspection report No. 26/70 of 19-11-1970. As the last mentioned notice entirely comes within the purview of the Rule 10A of the Central Excise Rules, 1944 at the hearing of this application learned Advocate for the petitioner did not press the challenge so far as this notice was concerned. Therefore, I am confined to consider in this application the six other notices issued under Rule 10A of the said Rules as indicated before. The said Annexure F, however contains particulars of 115 notices. The other notices being 8 of them were issued under Rule 10 of the said Rules. Inasmuch as the petitioner has shown cause in respect of those 8 notices in this application the said 8 notices are not under challenge. The copies of the notices which are under challenge have been set out in Annexure 'G(l)' onwards from page 62 onwards. The notices are identical in nature and after setting out the particulars of the amount claimed and the period for which these amounts have been claimed the grounds on which the amounts are sought to be recovered are indicated as follows : "Due to non-levy of appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the trade practice and or trade convention prevailing in this country and abroad weight of the paper was inclusive of that of the wrapper or the reel cores in which it was packed and/or wound. The weight of the reel cores or the wrapper was not taken into account separately from the weight of the paper for which they were utilised and no distinction was made in the trade. About the weight of the wrapper or reel cores utilised for packing or binding the different types of papers, the price realised from the customer and the bills and invoice raised on them was, according to the petitioner, inclusive of the weight of the wrapper or the reel cores. As the weight of wrapper or reel cores was very insignificant to the total weight of the paper that weight of the wrapper or reel cores was treated in the trade as that of the packed or wound paper duties. Indeed, according to the petitioner, it was impractical and was extremely difficult to ascertain the weight of the wrapper or reel cores in respect of each of the packages of manufactured paper. In accordance with the said trade practice, the petitioner asserts the weight of the wrapper and/or reel cores was ignored both in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire weight of the reel cores used to be taken by the excise authorities. As mentioned hereinbefore, approximately 40% of the weight of the reel cores consisted of Sodium Silicate utilised for manufacture of reel cores at the rate applicable to the paper contents in respect of the weight of the reel cores relating the Sodium Silicate. The said assessment of duty was made on the basis of the said representations or assurances. 3. In March, 1961 the Central Excise authorities wanted to change the procedure for assessing the wrapping paper utilised for packing, printing and writing paper. The Excise authorities wanted to assess the wrapping paper utilised for packing and printing and writing papers separately. The change however was not given effect to in view of the representation made by the paper manfacturers and the old practice continued. The petitioner in this connection has referred to two trade notices dated 28th of March, 1961 and 22nd of May, 1961 respectively, the said trade notice dated 28th of March, 1961 which was issued by the Collector of Central Excise, Calcutta and Orissa stated as follows : "It has been decided that the existing practice of assessment of wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Central Excise authorities regarding the manner of assessment of wrapping paper utilised for packing the paper on the manufacture of reel cores the petitioner had paid duty under the Act. The petitioner states that the petitioner did not realise or recover duties on other basis from its customers in respect of wrapping paper at rate different than that for the packed paper and acted to its detriment and had altered its position. The petitioner had also suffered assessment to be made and duty to be recovered on wrapping paper at rates higher than these applicable to it in respect of wrapping paper utilised in packing the superior qualities of paper. The petitioner had also paid duty on the basis of the above procedure of 40% of the weight of the reel cores utilised for winding the paper although the said weight was not of the packing paper but of Sodium Silicate. It is the case of the petitioner that no duty in any event was leviable in respect of the weight of the said chemical. 6. On the 5th of August, 1971 the petitioner received a letter from the respondent No. 2 herein namely, the Assistant Collector of Central Excise, Burdwan Division regarding the assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superseded by the letter." 8. Along with the letter he enclosed the letter from the Secretary Central Board and Excise dated 1st of May, 1970 which referred to the obser, vations of the Public Accounts Committee and stated, inter alia, as follows : "I am directed to refer to Para 28 (ii) of Audit Report on Revenue (Civil Receipts 1969, on the above subject and reproduce below the observations/recommendations that have been made by the Public Accounts Committee in their 11th Report : "The Committee observe that wrapping paper used in the manufacture of Reel Cores was erroneously assessed to duty at the same rate writing paper would on reel cores. While Committee note that the correct procedure for assessment is not being followed in all the Collectorates, they would like to point out that mistake occurred in as many as six Collectorates. This case as well as to the case of assessment of wrapping paper mentioned elsewhere in this Report, points to the need for clear cut instructions to collectors in the matter of assessment whenever containers and contents are assessable at different rates of duty." The Board desire that proper care should be taken to ensure that where both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equiring him to show cause to the Assistant Collector of Central Excise why he should not pay the amount specified in the notice. (2) The Assistant Collector of Central Excise, after considering the representation, if any, made by the person on whom notice is served under sub-rule (1), shall determine the amount of duty or charges due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined within ten days from the date on which he is required to pay such amount or within such extended period as the Assistant Collector of Central Excise may, in any particular case, allow. 10A. Residuary powers for recovery of sums due to Government- (1) Where these rules do not make any specific provisions for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short-levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, the proper officer may serve a notice on the person from whom such duty, deficiency in duty or sum is recoverable requiring him to show cause to the Assistant Collector of Central Excise why he should not pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in this application, Rule 10A of the said rules has no application and the alleged grounds would be covered under Rule 10. Therefore, the notices having been issued beyond the period contemplated by Rule 10 the notices were barred and without jurisdiction. It was, secondly, submitted that payment had been made on the basis of agreed assessments and the revenue had no right to question such agreed assessments in the manner purported to be done. As a part of the said submission he urged that, in any event, in view of the administrative circulars which I have set out hereinbefore which amounted, according to the learned Advocate for the petitioner, representation on behalf of the Revenue, and upon which the petitioner had acted to its detriment, the revenue authorities were estopped from challenging the said previous procedure and issuing the impugned notices on the alleged grounds. 13. It is well-settled that where a case is covered by Rule 10 of the said Rules the same cannot be reopened under Rule 10A of the said Rules because Rule 10A deals with residuary powers of recovery of sums due to the Government. If a particular contingency or a particular ground for short-levy or no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition reliance may be placed on the observations of the Division Bench of this Court in the case of Inspector, Central Excise v. Bengal Paper Mill - 82 C.W.N. at page 766. 16. In aid of the submission that the assessing authority was bound to act in compliance with the instructions of the superior authority while he was making the assessment reliance was placed on Rule 233 of the Central Excise Rules, 1944 which authorises the Central Board of Revenue and Customs to issue - instruction; while on the rules reference may be made to Rule 8 of the said Rules which authorises the Central Government by notification to exempt certain excisable goods from duty and also which empowers the Central Board of Revenue now the Central Board of Excise and Customs to exempt from payment of duty under certain circumstances of exceptional nature on any excisable goods. It was urged that acting on the instructions of the circulars which I have set out hereinbefore there have been agreed procedure of assessments and the respondents was not competent to deviate from the said procedure of assessments. Reliance in this connection was placed on the observations of the Supreme Court in the case of Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opening in the instant case and the Government was estopped. 17. On behalf of the respondent it was urged that the circular dated 27th of July, 1970 was not the subject matter of challenge in this case. Learned Advocate argued that if the circular dated 27th of July, 1970 was the correct position then the subsequent circulars dated 2nd of February, 1972 or 4th of August, 1971 ware irregular and contrary to the previous circular. Therefore, he submitted that the duty had been non-levied or short-levied, acting on wrong circulars. He sought to urge that it was not a case of any mis-construction or error on the part of the officer nor on the part of the assessee and therefore the impugned show cause notices which were to give effect to the previous circular of 27th July, 1970 could not come within the purview of Rule 10 and as such Rule 10A was attracted. I am unable to accept this contention. It is true that the non-levy or short-levy which are being sought to be recovered by the show cause notices impugned in this case was not perhaps due to error or mis-construction on his own on the part of the officer making the assessments nor perhaps could it be said that there was any niis-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the expression used in Rule 10 of the said roles does not apply in the present case. I am concerned with the question whether there was short-levy on which I must proceed on the basis of the show cause notice is the case of the revenue and then I must consider whether the alleged ground of short-levy was through inadvertence or error or mis-construction on the part of the officer or mis-statement as to the quantity, description or value of such goods, on the part of the owner. It is abundantly clear that if the case of revenue is to be accepted, as I must do for the purpose of this application, there was short-levy caused through inadvertence and error in ignoring the circular by the Officers issuing instructions contrary to the previous circular. As I said the case of inadventence, error or mis-construction on the part of the officer or the cause of mis-statement if any by the assessee as to the quantity, description or value of the goods on the part of the owner is irrelevant provided there was short-levy through either inadvertence, error or mis-construction on the part of the officer or mis-statement as to the quantity, description or value of the goods. In that view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd. v. Union of India (1976) S.C. Cases 242 - AIR 1977 S.C. page 596. Reliance was placed on the said decision for the proposition that whether there was an error or mis-construction or inadvertence on the part of the officer or whether there was any mis-statement on the part of the assessee was a matter that can be gone into the proceeding that would follow if cause is shown. The petitioner had an effective and an alternative remedy. Therefore, at this stage the petitioner was not entitled to seek the aid of Article 226 of the Constitution. I am unable to accept this position. If on admitted facts an authority purports to act without jurisdiction then to make the party go and suffer through the departmental proceeding is not a remedy for the wrong that he has complained of. Therefore, it cannot be said that there was any effective and alternative remedy in the departmental proceedings envisaged. This principle has been reiterated by this Court in the case of N.C. Banerjee v. Commercial Tax Officer - 8 C.W.N. page 836. This principle has been reiterated by a Division Bench of this Court in the decision in the case of Manindra Motian Sarkar v. Income Tax Officer Project Circle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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