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TMI Blog1961 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... h they were assessed was from 1st of July, 1956 to 30th April, 1957. The petitioners made a representation to the Assistant Collector of Central Excise, Kolhapur, against the said demand notice. The Assistant' Collector made an order on the 30th of September 1957, confirming that demand. The petitioners made an appeal to the Collector of Central Excise in about January, 1957, and also wrote a letter requesting for certain concessions and also requesting that the deposit required prior to the filling of the appeal be waived. In respect of their request for concessions in the demand being made on a certain basis, certain correspondence passed between the petitioners, the Collector of Central Excise and the Assistant Collector of Central Excise. The question was reopened ultimately the department agreed to levy compounded duty. The Assistant Collector of Central Excise, after giving opportunity to the petitioners to present their case in person, held that the petitioners satisfied the definition of the word 'manufacturer', that they were manufacturing the cloth in respect of which the assessment was being made but that they had adopted a circuitous method to avoid payment of duty. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of an onerous and burdensome character. Before the appellant can avail of it he has to deposit the whole amount of the tax. Such a provision can hardly be described as an adequate alternative remedy." The learned judges distinguished that case on the ground that there the tax was challenged on the ground of the section being ultra vires to the State Legislature. Mr. Mehta relies upon two judgments of this court in Special Civil Application No. 1630 of 1958, decided on 26-8-1958 and Appeal No. 20/1959 decided on 26-4-1960, where in view of the rule regarding deposit the Court entertained the applications under Article 226. In view of these cases, we do not like to dispose of this matter only on the ground that an alternative remedy is available to the petitioners. 6.The second ground urged by Mr. Gupte is one of delay. In the present case the first notice of demand was issued in 1957. The petitioners knew the attitude of the officers of the Central Excise Department which clearly showed that they were of the view that the petitioners were manufacturing the cloth though actually they were not the owners of the factories where it was being manufactured. Even after re-hearing, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial which was collected behind the back of the petitioners was utilized in arriving at the decisions made by the Assistant Collector of Central Excise. In order to examine this contention, we must first go to the first order, dated the 28th of September 1957, in respect of the enquiry held on their representation to the first demand notice for a sum of Rs. 2,32,614.12 nP. Their contentions then were : (1) that the petitioner firm was mainly engaged in sale of yarn and purchase of cloth, and that sometimes fabrics prepared from the same yarn which they had sold were purchased if the rates were suitable and even in such cases the cloth purchased was not equivalent to the yarn sold; ( 2) that they sometimes acted as brokers and commission agents for yarn and cloth or both and their interest was limited to commission only; (3) that the firm did not satisfy the definition of the word 'manufacturer' in order to be liable for this duty; (4) that the Superintendent of Central Excise had calculated the duty for the production from January, 1957 to April, 1957; (5) that they had stopped the business of purchasing cloth from the listed factories from January, 1957 onwards; and (6) that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs or from Bombay merchants and were not getting credit exceeding Rs. 5,000 to Rs. 6,000 at any time and that too at certain definite rate of interest. He then compared account of such transactions with the transactions of the petitioners from their own books. Instances were pointed out to Mr. Kulkarni, who represented the petitioners, that yarn of several thousand purposes was issued on credit to factory owners having only 2 or 3 powerlooms, which appeared to be contrary to ordinary business dealings of merely selling yarn and buying cloth; and the explanation given by the partner was that he was doing that business only on moral hazard. Objection is taken to the observations to the effect that : "Investigations were undertaken by the Superintendent, C.E., Jaisingpur (Rural), with the owners of all the powerloom factories separately to ascertain if they know the amount of transaction and if they had any account to show the amount payable by them to M/s. Shree Agency on account of yarn and cash payments received by them. The enquiry conclusively revealed that none of the owners of the powerloom factories were in a position to know the amount due to M/s. Shree Agency." AND "In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cloth issued from the different factories were prepared by the dalals in the bill books of the different factories and the bill books were returned to the parties; that, however, the parties issued the hundies on the same day of despatch of the goods in favour of M/s. Shree Agency and they received payments from the Bombay firms and that if there were any defects which were noticed after calendering and processing of the goods M/s. Shree Agency was charged for the same by the Bombay firms. In view of this clear and unequivocal statement by the partner, who appeared on behalf of the petitioners the ground that is now made to say the least, is thoroughly unfounded. 11.So far as the subsequent order, dated 21st December, 1959 is concerned, the findings are given after giving the petitioners a personal hearing. The facts relied upon in that order are those which appeared from their own account books, the admissions made by the representatives on the previous occasion and, in addition, the affidavits filed by the petitioners sworn by some of their suppliers and their account books which the petitioners produced with their representation. 12.It is very seriously urged by Mr. Mehta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, to accept this contention also. 13.It is then contended that the petitioners had no opportunity to cross-examine any of the persons from whom statements had been taken by the officer behind their back. Such a complaint was never made, in fact, before the officer concerned at the time of the inquiry. Not only that, as we have shown, while dealing with the first order, there was nothing on which any cross-examination was needed inasmuch as almost all the facts were admitted by the representatives of the petitioners. 14.We may also say in passing that the petition is most inadequate to deal with the grounds now made at the hearing since it contains only general allegations. No specific piece of evidence realised upon by the officer has been specifically challenged as having been used without asking for any explanation from the petitioners. We have not, however, taken these technicalities into account while dealing with this petition nor do we find it necessary to consider the argument of Mr. Gupte that the enquiry in such cases is merely administrative and not quasi-judicial so as to attract the application of the rule of natural justice to it. 15.The next contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the latter 'manufacturer' and it says : ". ......shall be construed accordingly and shall include not only a person who employs hired labour in the production, or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account if those goods are intended for sale." 17.The definition as given is indeed very wide. It does not refer to the ownership of the factory where the goods are manufactured. It covers anyone who employs hired labour in the production and manufacture of goods and we have no doubt that the petitioners would be included even in this portion of the definition. The second part 'who manufactures, or engages in their production or manufacture on his own account', would also apply to the petitioners. It is not possible to accept the interpretation that when the words used are 'who employs hired labour' they must mean necessarily the owner of the factory. It is also not possible to accept the suggestion that when the words used are 'engages in their production on his own account' they must mean the owner of the factory or the person who himself in doing the manufacturing process. Apart from this, the definition i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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