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TMI Blog1985 (7) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the Excise Rules, and why duty should not be demanded on the said quantity of 12091 kgs. tobacco was issued. 2. The explanation given by the appellant shows that there was heavy driage of the tobacco and it had undergone too many turnings for preservation which has resulted in loss of weight. 3. The Collector of Central Excise took the view that the loss in some cases was unduly large and by way of illustration he referred to a loss of 41.3% in the case of Cheroot tobacco which was stored for a period of 3 months and 21 days while in another case though the tobacco was stored for over one year, the loss was only 21%. He took the view that if the climate was hot, it should have affected all the consignments. Having rejected the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently, according to the learned counsel, the orders of the excise authorities determining the percentage of allowances to be made would amount to an arbitrary exercise of power under Rule 223-A of the Rules. Reference has been made to Sec. 5 of the Central Excise Act, which was brought into force in 1978, which enabled the Central Government by rules made under that section to provide for remission of excise duty leviable on any excisable goods which duty to any natural causes are found to be deficient in quantity. Sub-sec. (2) provides that any rules made under sub-sec,. (1) may having regard to the nature of the excisable goods or of processing or of curing thereof, the period of their storage or transit and other relevant consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructions should be issued by the Central Board of Excise and Customs in respect of making of the allowance for waste by evaporation or other natural causes, but if the rule is properly read, the power of the Collector to determine the allowance which should be made for waste by evaporation or any other natural causes is not controlled only by the instructions issued by the Central Board of Excise and Customs. The more important part of Rule 223-A is that which vests jurisdiction in the proper officer to determine the allowance to be made to such extent as he deems it reasonable. Primarily, it is his discretion to determine as to what will be the reasonable allowance to be made on account of waste by evaporation or other natural causes. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been introduced in 1978, undoubtedly provided that the Central Government can make rules for remission of duty of excise leviable on any goods which due to any natural causes are found to be deficient in quantity. This power was already there in the Collector under the rules and Rule 223-A which is still in force is none referable to Sec. 5. Sec. 5 (2) merely contemplates either an outer limit or the minimum limit and the maximum percentage beyond which such percentage shall not be allowed. Substantially, therefore, the question as to whether the allowance made by the Collector in a given case is reasonable or not has to be determined on the facts of each case and unless it is shown that the discretion has been arbitrarily exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is this which Rule 223-A has done when it says that a deficiency has to be accounted for by the owner of the goods or if the premises be a public bonded warehouse, the keeper thereof and if the deficiency is not accounted for, then the owner will be liable to pay the full amount of duty chargeable on such goods as are found deficient. 13. The instant case, we are concerned with tobacco which, it is well-known, has some moisture in it. The longer the period of storage, it is possible the reduction in weight will be higher because more moisture will evaporate. But when determining whether the entire deficiency is explained away on the ground that the moisture has evaporated or on account of driage, as it is normally called, it would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view that it is not possible to lay down with any rigidity that certain percentage of driage ought to be allowed as a matter of course throughout the country in respect of tobacco and that it has to depend on so many factors. The Division Bench in that case has taken the view that if any rigid formula is prescribed, it would be arbitrary and observed as follows- "The effect of nature is variable from place to place and it is impossible to lay down with, any rigidity that a certain percentage of driage ought to be allowed as a matter of course throughout the country and wherever the goods are and wherever the bonded warehouse is. It is in this context that the executive has left to the expertise of the authorities concerned who are duly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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