NON FERROUS ROLLING MILLS Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE two writ petitions may be considered together since they involve common issues both on facts and law. W.P.No. 9525 of 1982 has been filed for issue of a Writ ofCertiorarito quash the order of the second respondent dated 4-10-1982 in A. No. 289/82(M)/C.No.V/27/13/82 whereunder the second respondent rejected the appeal filed by the writ petitioner against the order of the third respondent dated 17-7-1982. W.P. No. 9526 of 1982 is for a writ ofCertiorarified Mandamusto quash the consequent demand made by the fourth respondent in Demand No. V/27/2/2/77 Serial No. E/63-114531 dated 3-8-1982 and forbearing him from enforcing the demand made therein.

(2.) BEFORE dealing with the various contentions raised, the facts of the case may be briefly stated as follows : The Writ petitioners were having a Rolling Mill where they convert Aluminium Ingots into Redraw Rods which are the raw material for Aluminium conductors. The petitioners have been licensed under the provisions of the Central Excise Rules, 1944 and they enjoy proforma credit under Rule 56A of the said Rules. The Superintendent, Madras Sough Range of the Department undertook inspection and verification of the accounts of the petitioners and it appeared to have revealed a shortage of 102. 426 metric tonnes of aluminium ingots for the period from 26-3-1970 to 11-8-1971 for which the wirt petitioners availed the proforma credit. The Superintendent also issued a show cause notice on 6-4-1972 calling upon them to show cause as to why duty at 25% B.E.D. Plus 20% S.E.D. amounting to Rs. 1, 22, 603. 89 should not be demanded. A detailed reply dated 3-5-1972 was submitted wherein the writ petitioners explained that the shortage was due to melting loss to the tune of 2% which is an invisible loss, unaccounted scrap, rejects etc. and metal in the metter and holder. Thereafter, another notice was issued on 28-8-1975 calling upon the petitioners to submit once again an explanation to the earlier notice, since there was jurisdictional change. Again on 8-9-1975 a detailed reply has been sent and a personal hearing was also given on 16-10-1975. Thereafter till 1977, nothing happened when again a show cause notice dated 18-1-1977 was issued giving a fresh personal hearing. It is after all these, the third respondent passed the order dated 17-7-1982 holding that the writ petitioners are liable to pay duty on the shortage of 70. 313 mts. of aluminium ingots not duly accounted for by them under Rule 56A(3) (v) and Rule 9A(3A) of the Central Excise Rules, 1944. Thereupon, the writ petitioners filed an appeal before the second respondent who, by the impugned order dated 4-10-1982, rejected the appeal. Against this order, W.P. No 9525 of 1982 has been filed. While so, the fourth respondent issued a demand dated 3-8-1982 consequent upon the order of the third respondent which is being challenged in W.P. No. 9526 of 1982.

(3.) MR. P. Narasimhan, Senior Central Government Standing Counsel appearing for the respondents submitted that the plea of limitation is untenable, that as a person enjoying the proforma credit under Rule 56A, failure to account the goods received tantamounts to clandestine removal in violation of Rules 9(1), 52A, 173P and 173G attracting also a penalty under Rule 56A and that there is no time-limit for the demand of duty raised in the present case under Rule 56A(3)(v) of the Rules and in any event in respect of a demand under Rule 10, the time-limit is one year when Rule 10 is read with Rule 173J prior to 6-8-1977 and not three months as contended by the Counsel for the writ petitioners. Learned Counsel for the Department, therefore, submitted that notwithstanding the omission of rule 10 etc. the impugned proceedings and the consequential demand are quite in accordance with law.