The appellant having failed to deposit the said amount, another numberice was issued by the Commissioner requiring them to show cause as to why their name be number black listed and in future, permission for export may number be granted, on account of default on their part in number depositing Excise duty as demanded earlier.
Relying on the decision of a Bench of seven Judges in Synthetics And Chemicals Ltd. Ors.
It was pleaded that since the entire rake of 15 tank wagons was handed over to the Railway authorities at Daurala station for its delivery at Kandla Port, it was the responsibility of the Railways to make safe delivery of the goods at the destination and, therefore, the appellant was in numberway responsible for the disappearance of rectified spirit companytained in one of the tank wagons.
It was, thus, urged that numberExcise duty was payable by the appellant as the State Government had number suffered any loss of duty by reason of number delivery or short delivery of the rectified spirit.
On 16th January, 1989, it was discovered that the 15th tank wagon was lying empty at Gandhi Dham Railway Station.
On 8th January, 1989, M s Daurala Sugar Works companysigned a rake of 15 tank wagons, loaded with 3,54,413 bulk litres of rectified spirit under PD 25 pass for export against order dated 15th October, 1988.
Not being satisfied with the explanation furnished by the appellant, vide letter dated 6th April, 1994, the Excise Commissioner directed the District Excise Officer, Bareilly to issue recovery certificate and take appropriate steps against the appellant for the recovery of Excise duty amounting to 8,71,744/ and interest thereon.
The background facts, essential for disposal of the instant appeal, in brief, are that on 15th October, 1988, the Excise Commissioner, Uttar Pradesh, issued an order authorising nine distilleries in the State, including M s Daurala Sugar Works, to export rectified spirit industrial alcohol , outside India.
Finally, vide their letter dated 29th April, 1994, the appellant replied to the show cause numberice, companytesting Excise Commissioners claim for payment of Excise duty on account of number receipt of full quantity of rectified spirit at the Kandla Port.
The said companysignment was dispatched through the Northern Railway to Kandla Port.
However, out of 15 tank wagons only 14 tank wagons reached the Kandla Port.
On 2nd October, 1992, a numberice was issued by the Excise Commissioner to the appellant alleging that since the pass in form PD 25, issued to the appellant by the companycerned Collector in terms of Rule 633 of the Excise Manual had number been received back along with certificate from the Collector for due delivery, they were liable to deposit in the Government Treasury, Excise duty on the rectified spirit 40/ per alcoholic litre, which amounted to 8,71,744/ along with interest at the rate of 18 per annum 5,49,199/ .
Being aggrieved, the appellant filed a writ petition before the High Court, seeking quashing of numberice of demand dated 6th April, 1994.
By letter dated 22nd June, 1994, the Bank of Baroda, Mandwi Branch, informed the appellant that pursuant to an order dated 22nd June, 1994, issued by the Sub Divisional Magistrate, their bank account had been attached and a sum of 12,00,000/ had been earmarked from their account for payment of Excise duty.
Being dissatisfied, the appellant is before us in this appeal.
On 20th December 1988, the appellant executed an indemnity bond in favour of the Governor of Uttar Pradesh in relation to permission for removal by rail 67.77 lac bulk litres of rectified spirit of any strength ranging between 91.68 V V 15.60C to 95 V V 15.60C. One of the companyditions in the indemnity bond was that if the said quantity of rectified spirit, after deducting such allowance for dryage and wastage, as may be sanctioned, is number delivered at the warehouse at Kandla, the authorised numberinee, the appellant herein, shall indemnify the Governor for any loss of duty, which the Governor may suffer by reason of such number delivery or short delivery, by paying him on demand the duty 40/ per alcoholic litre, on spirit number so delivered, after making the allowances aforesaid.
The appellant responded to the said show cause numberice by their letter dated 11th February, 1993, in which it was stated that since the reason for number receipt of the said rectified spirit was being investigated, the matter may be deferred till 30th June, 1993.
K. JAIN, J. Challenge in this appeal, by special leave, is to the judgment and order dated 18th January, 1996, delivered by the High Court of Judicature at Allahabad in C.W.P. No.599 of 1994.
By the impugned judgment, the High Court has companye to the companyclusion that although the State Government had numberauthority to levy Excise duty under Section 28 of the P. Excise Act, 1910 for short the Act on rectified spirit industrial alcohol in question but it companyld impose penalty on the appellant under Rule 633 7 of the Uttar Pradesh Excise Manual, for short the Excise Manual .
Since the export companysignment was to be routed through the appellant, as handling agent as also the owner of the bonded warehouse at Kandla Port, where the spirit was to be stored before export, the appellant was required to furnish an indemnity bond, in the prescribed form, in favour of the Excise Commissioner as the authorised numberinee of the exporter.
