ORIENT PAPER MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The appellant is a public limited company which carries on the business of manufacturing and selling wholesale paper and boards at Brajrajnagar in the State of Orissa. The appellant company holds a licence under the Central Excise Act in Form L-4 prescribed by the Central Excise Rules, 1944. The appellant company's factory and its premises and precincts have been demarcated under the said Rules. The Factory is traversed by railway lines, because the appellant company enjoys the benefit of a private siding. In 1960, the appellant Company constructed a new railway siding outside the original factory premises where bamboos and other raw materials were stored and constructed a platform for loading and unloading .This extension has not been included in the factory or its premises or precints for purposes of the Excise Rules. It is presumably so, because to reach the new siding, a public road has to be traversed which is not enclosed and from which public cannot be excluded. It is in evidence that after this new siding was constructed, the appellant company requested the excise authorities to amend the licence to include the new railway siding but this was refused.

(2.) On February 27, 1961, the appellant loaded 20 wagons of paper after effecting clearance of these goods by payment of the excise duty under R. 52 of the Excise Rules. On February 28, 1961, the appellant company loaded 13 more wagons and cleared them. These wagons were sealed by the railway administration and railway receipts were issued to the appellant company. The company also obtained gate pass. The wagons then passed into the control of the railway administration, but as a pilot engine was not available, the wagons were shunted into the new siding. The exit from the new siding is only through the factory premises because the railway track comes to a dead-end on the other side.

(3.) The Deputy Superintendent of Central Excise wrote to the appellant company on March 1, 1961 that the wagons loaded on February 27, and 28, 1961 were found inside the factory premises till 9-45 A.M. on March 1, 1961 and the goods were therefore liable to be assessed at the higher rates of excise duty current from March 1, 1961. The appellant company contended before the Deputy Superintendent that the wagons were duly sealed after the completion of loading in his presence, were taken out of the factory premises and were not in the factory when the new rates came into force.. The appellant company relying upon R. 9-A of the Central Excise Rules, 1944 submitted that duty was payable at the rate in force on the date on which the duty was actually paid. In the alternative, the appellant company submitted that the goods having been cleared or removed from factory premises before the midnight of February 28,1961 could not be made liable for the enhanced duty which came into force from March 1, 1961. These contentions were not accepted by the Deputy Superintendent who demanded payment of Rs. 45,475.83 from the appellant company as differential excise duty. The amount was paid under protest and without prejudice to the rights of appeal and representation to the proper authorities under the Excise Act.