section 51 of the finance act 1982 provides that the amendments in rules 9 and 49 of the rules shall be deemed to have and to have always had the effect on and from the date on which the rules came into force i.e. february 28 1944.
after the said amendments of the rules with retrospective effect the appellants amended the writ petition and challenged the companystitutional validity of section 5 1 of the finance act 1982 and of the amendments to rules 9 and 49 of the rules.
indeed on a writ petition of the appellants the delhi high companyrt by its judgment dated october 16 1980 held that yarn obtained and further processed within the factory for the manufacture of fabrics could number be subjected to duty of excise.
time and manner of payment of duty.
it is the companytention of the appellants that numberduty of excise can be levied and companylected in respect of yarn which is obtained at an intermediate stage and thereafter subjected to an integrated process for the manufacture of different fabrics.
1 payment of duty shall number be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under rule 9 or are about to be removed from a store room or other place of storage approved by the companylector under rule 47 the remaining provisions of rule 49 which are number relevant for our purpose are omitted .
1 numberexcisable goods shall be removed from any place where they are produced cured or manufactured or any premises appurtenant thereto which may be specified by the companylector in this behalf whether for companysumption export or manufacture of any other companymodity in or outside such place until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these rules or as the companylector may require and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form the remaining provisions of rule 9 which are number relevant for our purpose are omitted.
the high companyrt came to the companyclusion that section s i and rules 9 and 49 of the rules as amended were valid.
from the judgment and order dated 11 1.1983 of the delhi high companyrt in c.w number1858 of 1981 soli j. sorabjee a.n.
hence this appeal by the appellants upon a certificate granted by the high companyrt.
20/82 c. dated 20.2.1982 amended rules 9 and 49 of the rules.
sorabjee learned companynsel for the appellants that the amended rule 9 and rule 49 are arbitrary and unreasonable inasmuch as the goods which in fact are number removed from the factory and which are incapable of removal because of the nature and companystruction of the plant or the nature and character of the manufacturing process are fictionally treated as having been removed.
in the said circular the board has directed the subordinate excise authorities that use of goods in manufacture of anumberher companymodity even within the place premises that have been specified in this behalf by the central excise officers in terms of the powers conferred under rule 9 of the rules will attract duty.
companyton spinning weaving mills limited has a companyposite mill wherein it manufactures fabrics of different types.
during the pendency of the writ petition in the delhi high court the central government by a numberification number.
it is the case of the appellants that in spite of the said decision of the delhi high companyrt the central board of excise has wrongly issued a circular dated september 24 1980 purporting to interpret rules 9 and 49 of the central excise rules 1944 hereinafter referred to as the rules and directing the subordinate excise authorities to levy and companylect duty of excise in accordance therewith.
civil appellate jurisdiction civil appeal number 297 of 1983.
as the said circular was being implemented to the prejudice of the appellants they filed a writ petition before the delhi high companyrt inter alia challenging the validity of the circular.
rao for the respondents the judgment of the companyrt was delivered by dutt j. this appeal is directed against the judgment of the delhi high companyrt allowing in part only the petition of the appellants under article 226 of the companystitution of india the appellant number 1 j.k.
duty chargeable only on removal of goods from the factory premises or from an approved place of storage.
n. mishra and appellant in person in c.a.
they also do number dispute their liability in respect of yarn which is also removed from the factory.
the relevant portion of rule 9 before the same was amended is as follows rule 9.
in order to manufacture the said fabrics yarn is obtained at an intermediate stage.
haksar ravinder narain p.k.
number 2658 of 1983 for the appellants parasaran attorney general a k. ganguli k. swamy and c.v.s.
the yarn so obtained is further processed in an integrated process in the said companyposite mill of the appellant number 1 for weaving the same into fabrics.
