E M KARUPPANNAN Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner herein is a grower of tobacco at his village at Elugamvalasu, Ponniyadi, Dharapuram taluk, Coimbatore district for several years. He has taken out a licence for the purpose of curing tobacco which he grew, under the Central Excise Rules. Under the said licence the petitioner is permitted to cure tobacco and the quantity so cured would have to be accounted for to the Central Excise authorities. In the year 1967-68 he submitted a return on 15-3-1968 showing that he has cured 1140 kgs. of chewing tobacco. When the Central Excise Officer visited the petitioner's place on 9-9-1968 for ascertaining as to how he disposed of the cured tobacco the petitioner stated that he had transferred 1106 kgs. of tobacco to a private warehouse licensee, one K.S. Ponnuswami who is a licensed dealer in Bhavani as per transport certificate T.P.2 No. 247123 dated 24-8-1968. When the said Ponnuswami was contacted he denied having transported the tobacco from the petitioner's premises.

(2.) Thereafter an excise duty of Rs. 2388.96 payable on the said stock of 1160 kgs. of chewing tobacco was demanded from the petitioner by an order of the Superintendent of Central Excise, Integrated Divisional Office, Erode, dated 24-9-69 on the ground that the liability of the petitioner as a curer of tobacco continues under Rule 29 of the Central Excise Rules, 1944, hereinafter referred to as the Rules. The petitioner questioned the said demand by filing an appeal before the Collector of Central Excise, Madras who by his order dated 17-4-1971 rejected the appeal holding that the order passed by the Superintendent of Central Excise is in accordance with law. Against the orders of the Collector the petitioner filed a revision petition before the Central Government but that also failed. The petitioner has thereupon approached this court for the issue of a writ of Certiorari to quash the order of the Central Government upholding the demand for excise duty made against the petitioner.

(3.) The petition of the petitioner is that his liability to pay Central Excise duty in respect of the tobacco disposed of by him has ceased as soon as the tobacco has been disposed of in accordance with the rule and that in the circumstances of this case where the goods have been transported under a valid permit issued by the authorities to one Ponnuswamy, Rule 29 cannot be invoked to recover the excise duty from the petitioner. According to the respondent, however, Rule 29 preserve the liability of the curer to pay excise duty until the transfer ownership of the tobacco from the petitioner to another warehouse licensee is reported and acknowledged by the proper officer, and that the petitioner not having reported the transfer of ownership and acknowledged by the Central Excise Officer at Bhavani, the proper officer, the petitioner cannot question the levy of excise duty on him.