T VELAPPAN Vs. SUPERINTENDENT OF CENTRAL EXCISE ERODE

JUDGEMENT

(1.) THE petitioner in this writ petition is a partner of M/s. Bharat Refiners and Oil Mills carrying on business at Erode in the manufacture and sale of ground-nut oil and refined oil and he prays for the issue of a writ of certiorari to quash the notice of demand dated 7-6-1971, demanding payment of Rupees 26, 768. 75 from the petitioner for the periods 1967-68 to August 1970 under the provisions of the Produce Cess Act 15 of 1966.

(2.) THE Central Act 15 of 1966 was enacted to provide for the imposition of cess on certain produce for the improvement and development of the methods of cultivation and marketing of such produce and for matters connected therewith. Sub-section (1) of Section 3 provides for the levy and collection, as a cess, a duty of customs at such rate not exceeding the rate specified in the corresponding entry in column 3 of the First Schedule on every produce specified in column 2 of that Schedule. Sub-section (2) of that section provides for levy and collection, as a cess, on every produce specified in column 2 of the Second Schedule, a duty of excise at such rate, not exceeding the rate specified in the corresponding entry in column 3 thereof. Item 3 in the Second Schedule is'oils extracted from oil-seed crushed in any mill in India'. THE maximum rate at which duty of excise may be collected is one rupee per quintal of oil and the actual rate provided for in the Second Schedule is 60 paise per quintal of oil. Section 8 of the Act provides for every occupier of a mill furnishing to the Collector every month a return stating the total amount of produce specified in the Second Schedule consumed or brought under processing or extracted in the mill during the preceding month. Section 9 deals with collection of cess leviable on produce specified in the Second Schedule. Sub-section (1) of this section provides that on receiving any return made under section 8, the Collector shall assess the duty of excise payable on every produce specified in the Second Schedule, in respect of the period to which the return relates, and if the amount has not already been paid, shall cause a notice to be served upon the occupier of the mill requiring him to make payment of the amount assessed within ten days of the service of the notice. Sub-section (2) of this section deals with assessments to be made in a case where no return is furnished or the return furnished happens to be defective. That sub-section states - "9. (2) if the occupier of any mill fails to furnish in due time the return referred to in Section 8 or furnishes a return which the collector has reason to believe is incorrect or defective, the Collector shall assess the amount payable by him in such manner, if any, as may be prescribed, and the provisions of sub-section (1) shall thereupon apply as if such assessment had been made on the basis of a return furnished by the occupier : Provided that, in the case of a return which he has reason to believe is incorrect or defective, the Collector shall not assess the duty of excise at an amount higher than that at which it is assessable on the basis of the return without giving to the occupier a reasonable opportunity of proving the correctness and completeness of return.' Section 10 deals with the finality of assessment after providing for appeal. Sub-section (1) of this section states -" * 10. (1) Any occupier of a mill who is aggrieved by an assessment made under Section 9 may, within three months'notice referred to in sub-section (1) of that section, appeal to such authority as the Central government may, by notification in the Official Gazette, appoint in this behalf, for the cancellation or modification of the assessment and, on such appeal, the said authority may cancel or modify the assessment and order the refund to such occupier of the whole or part, as the case may be, of amount paid thereunder : Provided that the authority so appointed shall not be inferior in rank to the Collector by whom the assessment was made.'