MADINA Vs. COLLECTOR CENTRAL EXCISE

JUDGEMENT

(1.) - This appeal by special leave is directed against the judgment and order dated 4-4-1973 of the Allahabad High Court passed in Special Appeal No. 83 of 1986 affirming an order of a learned single Judge passed on 1-10-1965 in Civil Miscellaneous Writ No. 3234 of 1959.

(2.) The appellant is a manufacturer of chewing tobacco (Zarda). He holds a licence under the Central Excise Rules, whereunder he is permitted to keep in possession, subject to the observance of rules, unmanufactured tobacco. It appears that no licence is necessary, for possession or sale of manufactured chewing tobacco. Somewhere in May, 1958 the premises of the appellant were inspected by the Deputy Superintendent, Central Excise, Allahabad. Amongst other stock, a quantity of 14,376 lbs. of tobacco, which the appellant termed as manufactured and the Excise Department as unmanufactured, was taken into possession. Besides that there was another quantity of 264 lbs. recovered as undeclared, whether manufactured or unmanufactured.

(3.) The appellant was issued a show cause notice by the Assistant Collector of Central Excise asking him to explain the unauthorised possession of the unmanufactured tobacco. In response thereto, the appellant asserted that the recovered tobacco was, in the eye of law, manufactured inasmuch as it had been crushed and coloured towards the manufacture of chewing tobacco ie. Zarda. The Assistant Collector of Central Excise by his order dated 21-8-1958 rejected the contention holding that the alleged manufacture of tobacco did not qualify being complete manufacture as colouring was the very first step in the usual process of manufacture of Zarda and that the same had not been treated further with any other appreciable ingredients. In conclusion, he held that the tobacco seized was in the beginning of the process of manufacture and that there was no document to prove that the tobacco was duty paid. On that basis he imposed a penalty of Rs. 200/- on the appellant declaring the tobacco weighing 14,376 and 264 lbs. as unmanufactured and liable to confiscation. He, however, permitted redemption of the confiscated tobacco on payment of a redemption fine of Rs. 200/-. In addition to duty due thereon to be paid at the appropriate rate.