UNION OF INDIA Vs. G VITTAPPA KAMATH

JUDGEMENT

(1.) IN this seconctappeal the appellant is the Union of India, represented by the secretary, Ministry of Finance, Government of India, New Delhi, and the questions that arise are firstly whether a civil Court has got jurisdiction to order refund of amounts alleged to have been illegally collected as Central Excise tax on betel nuts and secondly Whether on the facts of the case there has been such illegal collection. The respondent filed O. . S. No. 183 of 1947 In the Court of the District Munsif, mangalore for refund of Rs. 502 stated to have been illegally collected as central excise tax on cured betel nuts. The trial court held that the suit was not maintainable and dismissed the same. In appeal the learned Subordinate Judge, south Kanara, came to a contrary conclusion and decreed the suit as prayed for and hence the present second appeal.

(2.) UNDER the Indian Finance Act of 1944, the Government of India imposed an "excise duty of two annas per pound on cured betel nuts produced on and after 14-1944. The first plaintiff, a dealer in arecanuts, had already stocked cured nuts by the end of March 1944. which could not be brought within the taxation under the Finance Act of 1944. The Sub-Inspector of Central Excise checked the pro-excise stock, i. e. , the goods which the first plaintiff had stocked with him before 31-3-1944 and issued a certificate Ex. A-l on 12-4-1944 showing that the first plaintiff was in possession of arecanuts cured before 31-3-1944 and the quantity was 16 candies 1 maund which corresponded to 9245 Ibs. On 17th and 19th of April 1944 and 6-5-1944 the first plaintiff sold 7 candies 16 maunds 25 Ibs. out of the pre-excise stock to one Ullal Hari Varman Nayak as per entries in Ex. A-8 and a reference had been made to the pre-excise certificate, Ex. A-l.- Subsequently the Assistant Inspector of Excise issued a demand order, Ex. A-2, dated 2-12-1944, calling upon the first plaintiff to pay exciseduty of two annas per pound On 9245 Ibs. which according to the first plaintiff was identical with the weight mentioned in the pre-excise certificate. Against that demand order, there was an appeal to the Collector of Central Excise. Meanwhile as the stock had to be sold the goods were handed over to the second plaintiff for sale and the quantity thus handed over came to 1 candies 12 maunds and 12 Ibs. This quantity was bonded and a tax of Rs. 502 was collected whereupon the second plaintiff paid the amount under protest and filed a petition for refund. The Collector of Central Excise dismissed it on 15-4-1946 and on appeal to the Central Board of Revenue, the order of the Collector was confirmed. The present suit is for recovery of the illegal levy of Rs. 502.

(3.) THE contention put forward on behalf of the Central Government is that the stock sold by the first plaintiff to the second plaintiff was not pre-excise stock but that the first plaintiff was trying to use the pre-excise certificate as a shield against the imposition of duty on the goods cured after 31-3-1944, and that was why exemption was cancelled.