JULLUNDER RUBBER GOODS MANU Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an appeal by special leave from a judgment of the Punjab High Court (Circuit Bench) Delhi in which, the validity and legality of the levy of cess by way of excise duty on the rubber used by manufacturers of chappals under the provisions of the Rubber Act 1947. (Act XXIV of 1947), as amended hereinafter called the Act, have been assailed.

(2.) M/s. Jullundur Rubber Goods Manufacturers, Association is an association of rubber chappal manufacturers at Jullundur in the State of Punjab. Its members, who manufacture chappals, are stated to use about 15 to 20 per cent of rubber in the process of their manufacture while the rest of the materials used by them consists of various other articles. A petition was filed under Arts. 226 and 227 on behalf of the aforesaid Association, the second petitioner being its Secretary, challenging the levy and collection from the manufacturers of chappals under the provisions of the Act, the Rules framed and the relevant notification issued thereunder of a duty as a result of the amendment made in S. 12 of the Act by the Rubber Act of 1960. A learned Single Judge dismissed the writ petition and his judgment was affirmed by a Division Bench of the High Court.

(3.) The contentions which have been raised are (1) the duty sought to be imposed under S. 12 as amended being outside the ambit of Entry 84 of List I in the Schedule to the Constitution is beyond the legislative competence of the Parliament; (2) Section 12 (2) suffers from the vice of excessive delegation. It confers uncontrolled and unrestricted discretion upon the Rubber Board to levy upon and collect duty of excise from either the owners of the rubber producing estates or the users so called manufacturers (of rubber) without specifying the circumstances under which it should be imposed upon the one or the other nor has any guiding policy or principle been laid down in the Act for making a choice. (3) In any case the Rules which have been framed do not satisfy the provisions of S. 12 (2) of the Act and do not indicate with sufficient clarity and precision on whom the levy is to be made and from whom the duty is to be collected as between the owners of the estates and the manufacturers.