KRISHNARAJENDRA MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is a company manufacturing textile goods in Mysore City. Under the Central Excise and Salt Act (hereinafter referred to as the Act), excise duty was leviable by virtue of Entry 19 in Sch.I of the Act on some of the cotton fabrics manufactured by the petitioner. By a Notification issued by the Central Govt on March 1, 1969, as amended by Notifications d/. 6-6-1976, 29-3-1971 and 38-6-1971, cotton fabrics-medium A Grey (unprocessed), cotton fabries-medium-B Grey (unprocessed) and bleached or and dyed but not printed were exempted from payment of excise duty levied under the Act. Under the Khadi and other Handloom Industries Development (Additional Excise Duty on Cloth) Act (No.12 of 1953) (her emafter reforred to as Act 12 of 1953) additional excise duty was leviable on cloth. Under a Notification issued by the Govt of India dated 2S-7-1953 ail varieties of cloth which were for the time being exempted from the payment of excise duty levied under the Act were exempted from the additional excise duty leviable under Act 12 of 1953. By a Notification d. 1-10-1966, the Notification d.25-7-1953 was amended by the addition of a proviso stating that the said exemption was not applicable to certain kinds of cloth. THE above proviso was substituted by another Notification of the Govt of India d.7-7-1970. After the said substitution, the Notification issued on 25-7-1953 read as follows :

(2.) THE Asst Collector who functioned as the proper officer in this case was of the view that the contention of the petitioner could not be upheld and ordered that a sum of Rs. 58,052-73 was liable to be paid by the petitioner as additional excise duty under Act 12 of 1953. THE appeal filed by the petitioner before the Appellate Collector and the revision petition be fore the Central Govt, were unsuccessful. Hence, this writ petition. Sri T.Rangaswamy lyengar, learned Counsel for the petitioner, relying upon two decisions of the Supreme Court in Union of India v. Angle Afghan Agencies , AIR. 1968 SC. 718. and Century Spinning and Weaving Mill v. Ulashnagar Municipal Council, AIR 1971 SC. 1021. contended that the Central Govt was not entitled to demand the sum of Rs:8,052-73 in view of the representation made by the Superintendent of Central Excise that no additional excise duty was payable under Act 12 of 1953. I find it difficult to agree with the submission made by Sri lyengar. THE two cases relied an by him are cases in which the Supreme Court was not concerned with a statutory rule like Rule 10 of the Central Excise Rules which authorises the proper officer to collect the duty payable from an assesses when he is of to opinion that there has been a short levy of the duty. THE principle of estoppel which is a rule in equity cannot prevail against law. THE proper officer who is empowered to recover the duty due and payable by an assesses by virtue of a statutory rule cannot be prevented from exercising the said power by applying the principle of equitable estoppel. It is not disputed that if duty had been assessed under Act 12 of 1953 read with Notification dt.25-7-1953 as amended by Notification dt.7-7-1970, the petitioner would be liable to pay the sum demanded by the Asst Collector. Since the only ground urged, namely, the ground of equitable estoppel is not available to the petitioner in thp instant case, the petition has to fail. In the result the petition is dismissed. In the circumstances of this case each party would bear and pay its own costs.