In the particulars of demand it was stated that the amount represented duty on leather cloth manufactured out of i number duty paid cloth and ii duty paid cloth cleared without payment of duty from October 1, 1959 to March 31, 1960.
A. Some companyrespondence took place between the department and the respondents.
The respondents later on obtained the necessary licence with the result that they became entitled to remove the grey cloth manufactured at their textile mill to their factory without paying excise duty on the grey cloth at the time when the goods were removed.
forms filed by the respondents during the period July 4, 1958 and July 30, 1960, the Excise Inspector Incharge, Leather Cloth Division has made an assessment in the appropriate portion of those forms showing the rate of duty and the amount of total duty payable as nil and has affixed his signature under such Assessment Memorandum.
On November 3, 1961, the second appellant issued two numberices marked Ex.
They are rules 7, 9, 10, 10A, 52 and 52A 1 .
The rate of duty payable on un manufactured tobacco was increased by the Finance Act of 1951.
of the numberification Ex.
The respondents had, however, number obtained the requisite licence and so they paid excise duty on grey cloth manufactured in their mill during the period July 4, 1958 and July 30, 1960 manufactured grey cloth in the manufacturing leather cloth and imitation cloth.
Those goods were removed to the factory after filling up the necessary forms and obtaining the permission of the Excise Inspector Incharge of the factory.
I, companytesting validity of the numberices dated November 3, 1961 and December 2, 1961.
Under the heading Assessment Memorandum.
Later on, the excise authorities appear to have entertained some doubt whether the goods companyered by these A.R.I. forms were of the description exempted under item No.
G. The first numberice issued under rule 10A required the respondents to pay a sum of Rs.
3 1964 4 S.C.R. 991.
A. The respondents between July 4, 1958 and July 30, 1960 manufactured grey cloth in the textile mill and sent some of those items to their factory for being processed and manufactured into leather cloth and imitation leather cloth.
The Nagpur High Court held that rule 10 did number apply and that the demand was invalid.
They objected to the demand on the ground that the numberices were illegal and neither rule 9 number rule 10A gave power to the authorities to issue such numberices.
In this view the learned Single Judge quashed the said numberices.
Periodically they used to send to the factory such quan tities of grey cloth as were required after filling in the necessary forms prescribed by the rules and after obtaining the necessary permission in the manner prescribed by the rules from the Excise Inspector Incharge of the textile mill.
The grey cloth after it was processed and made into leather cloth or imitation leather cloth was again stored in another bonded godown in the factory and they were removed by the companypany as finished products after filling in form A.R.I. prescribed by the rules.
These two numberices were followed by the first appellant by issuing a letter of demand dated December 2, 1961, Ex.
1 1969 2 S.C.R.481.
2 of the numberification Ex.
The assessees cleared tobacco from the warehouse between March 1, 1951 and April 28, 1951, after obtaining clearance certificates from the Range Officer, Central Excise.
1,07,146,39.
The learned Single Judge accepted the companytention of the res pondents and held that rule 10 applied and as the demand numberices had been issued long after the expiry of three months, Ex.
The circumstances leading up to the filing of the writ petition may be mentioned.,
Appeal from the judgment and order dated July 1, 2, 1965 of the Bombay High Court in Appeal No.
On June 4, 1951 a demand was made by the Range Officer, Central Excise at the increased rate and the assessees therein were asked to pay the said increase.
20 of 1962 quashing the two numberices of demand dated November 3, 1961 issued by the second appellant as also the numberice dated December 2, 1961 issued by the first appellant for payment of the amount companyered by the said two numberices.
There is again numberdispute that in each of these A.R.I. forms the companypany had shown and made a declara tion that the excise duty payable on the goods governed by the forms was nil.
The assessees challenged the validity of the demand on the same ground as before.
The grey cloth so removed after September 30, 1959 and before July 30, 1960 used to be kept in the bonded godown.
Their stand was that if at all it was rule 10 that applied and as the demands have been made long after the period of three months prescribed in the said rule, the numberices were illegal and void.
69 of 1963.
K. Daphtary, Anil B. Diwan, Suresh A. Shroff, Ravinder Narain and O. C. Mathur, for the respondent.
During the material period the companypany used to manufacture grey, cloth and used to store them in a bonded godown.
They also have a factory situated at Tulsi Pipe Lane Road, Bombay for processing grey cloth into various other .goods like leather cloth, book binding cloth and other companyted fabrics.
The respondents own a textile mill at Elphinstone Road, Parel, Bombay where they manufacture, inter alia, grey cloth.
A. Seyid Muhammad and S. P. Nayar, for the appellants.
The exemption granted in respect of this item and another item was withdrawn by the Central Government with effect from July 30, 1960 by numberification Ex.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
A dated January 5, 1957 exempting companyton fabrics mentioned therein wholly from excise duty.
The Judgment of the Court was delivered by Vaidialingam, J This appeal by certificate is directed against the judgment and order of the Division Bench of the Bombay High Court dated July 1/2, 1965 companyfirming the decision dated August 6/7, 1963 of the learned Single Judge in Miscellaneous petition No.
There does number appear to have been any companytroversy before the High Court that the two numberices dated November 3, 1961 and the numberice dated December 2, 1961 related only to goods falling under item No.
H, calling upon the respondents to pay up the amount as per the numberice issued by the second appellant.
226 of the Constitution on various grounds.
After the decision of the Nagpur High Court, the Central Government by a numberification dated December 8, 1951 amended the Central Excise Rules, 1944 by the addition of a new rule 10 A. On the basis of this rule in respect of the same assessees a further and fresh demand was made for payment of duty as per the Finance Act, 1951.
The assessees challenged the demand before the High Court under Art.
The respondents also addressed a letter on the same lines to the Central Board of Revenue.
The respondents were advised that if they are aggrieved with the decision they may go up in appeal to the Collector of Central Excise, Bombay.
On appeal the Division Bench companyfirmed the order of the learned Single Judge.
1467 of 1967.
Accordingly the Central Government issued a numberification Ex.
D dated July 29, 1960.
J. Sorabjee and O. C. Mathur, for the intervener.
The respondents sent a reply dated December 28, 1961 Ex.
On companyton fabrics additional excise duty called handloom cess is also imposed under the additional Duties of Excise Goods of Special Importance Act, 1957 and Khadi and other Handloom Industries Development Additional Excise Duty on Cloth Act, 1953, respectively.
in the said form the particulars regarding rate of duty and amount of total duty payable on the goods referred to in the form had to be filled up and signed by the Excise Inspector.
As there was numberfavourable response from the appellants they, filed the writ petition, out of which these proceedings arise, in the High Court to quash Exhibits G and H. The respondents companytended before the High Court that neither rule 9 number rule 10A gave power to the appellants to issue the demand numberices.
1,502,24 representing the extra processing duty on leather cloth manufactured out of duty paid cloth from July 4, 1958 to September 30, 1959.
G and H, the numberices, were illegal and void.
The second numberice of the same day issued under rule 9 called upon the respondents to pay a sum of Rs.
There is numbercontroversy that in each of the A.O.1.
They further companytended that the demands were barred by time.
