A RAMIAH NADAR Vs. SECRETARY MINISTRY OF FINANCE

JUDGEMENT

(1.) THE plaintiff who has lost in both the courts below, has preferred this second appeal in so far as he could not get a declaration or injunction that the Central Excise Authority had wrongly levied duty on him and further that he was not liable for any duty. He is a tobacco merchant dealing in unmanufactured tobacco for which he holds licence issued under the Central Excises and Salt Act, 1944, briefly referred to herein as the Act. THE said licence does not prohibit him in dealing with manufactured products like tobacco packets, pani tobacco etc. He was also dealing in manufactured tobacco viz. pani tobacco, etc. for which no licence or accounts is required under the law of Central Excise that he is not a manufacturer of such pani tobacco. On or about 15th July, 1966, the Central Excise authorities inspected his premises and checked the bill books maintained by him for the sale of pani tobacco for the period from 5th August, 1964 to 9th July, 1966. It was found, 10642 kgs. of pani tobacco had been sold by him. This quantity was not manufactured, but, was purchased from outside for sale. On this, it was concluded that the said quantity of pani tobacco was manufactured by him and on that basis, it was calculated that the quantity of raw tobacco as 3547 kgs. for the manufacture of pani tobacco. On these materials, a show cause notice came to be issued by the Assistant Collector of Central Excise (Sivakasi, 3rd defendant) on 30th December, 1966, calling upon the plaintiff to show cause why he should not be assessed and penalty levied for having brought into his duty paid premises the non-duty paid tobacco without valid permit. That notice was duly replied. Not being satisfied with the explanation, the Assistant Collector passed an order raising a demand for a sum of Rs. 5, 296.05, as central excise duty on 2675 kgs. of chewing tobacco under Rule 40 of the Central Excise Rules, 1944. An appeal was preferred to the Collector of Central Excise (second defendant) to modify and reduce the quantity to 2230 kgs. as non-duty paid tobacco. THE revision to Government of India was also dismissed. Hence the present suit.

(2.) THE basis of the suit is that the conclusion of the Central Excise authorities is illegal and erroneous and lacks evidence. THE arrival at the quantum was arbitrary. THEre was no reasonable opportunity to peruse the records.

(3.) THE learned trial Munsif on a consideration of the facts of the case before him, found that the plantiff did manufacture the pani tobacco and the assessment order was correct and therefore, dismissed the suit. On appeal, the learned Additional subordinate Judge in A.S. No. 36 of 1974, confirmed this finding. Hence, the present second appeal.