SHIV SILK MILLS Vs. UNION OF INDIA

JUDGEMENT

(1.) The issue involved in this writ petition falls within a very narrow compass. Before proceeding to determine the issue, it is necessary to briefly notice the facts of the case.

(2.) The petitioner is a processor, purchasing fabrics for embroidery work and effecting clearances of the embroidered fabric. According to the petitioner's case, the goods were purchased directly from the mills, and at times from the open market, and it was not possible to ensure that the goods were received in mill packed condition, or were accompanied by documents certifying their duty paid character.

(3.) The dispute arose in respect to the extent of the liability of the petitioner for payment of excise duty on the goods cleared by them. The period involved is June 1970 to March 1971. A demand of short levy, amounting to Rs. 13,891.45 was raised by means of show cause notice dated 12.5.1971, alleging that the petitioner were clearing cotton fabrics, after making embroidery, assessable under Tariff Item No. 19-1 (2) of the Central Excise Tariff, and that for the cotton fabrics (base fabrics) which they had received from the open market, they had not been able to establish their identity with the duty paying documents, and as such the differential duty equivalent to the excise duty payable on the base fabrics was demanded from the petitioner. The relevant entry, as in force, at the time, reads as under: <FRM>JUDGEMENT_180_DRJ24_1992Html1.htm</FRM>