RADHAKRISHNA RAMNARAIN LIMITED Vs. R PARTHASARATHY

JUDGEMENT

(1.) The petitioners are the manufacturers of P.V.C. Leather Clothes also known as artificial Leather Clothes of Rexnis. Uptil 29th February 1980, the same item was assessed to excise duty under tariff item No. 19 of the First Schedule to the Excises and Salt Act, 1944, the rate being 25 paise per square metre. Pursuant to Finance Bill of 1968, a new item 22B was introduced in the schedule which covered the item manufactured by the Petitioner and the rate was 25 per cent ad volorem. A declaration was made under the Provisional Collection of Taxes Act, 1931. Accordingly the new rate prescribed in respect of the said item came into effect from mid- night between 29th February 1978 and 1st March 1968. As required the petitioners declared to the Excise Officer concerned the stock of manufacture of goods lying in the factory at that time which consisted of 5510 rolls of the material measuring 1,32,989 linar metres and cut pieces weighting 4,519.75 kgs.

(2.) The Inspector of Central Excise concerned, issued a demand notice dated 19th March 1968 calling upon the petitioner to pay duty on the paid goods in the sum of Rs. 39,617.00. Even before the goods were removed or sought to be removed from the factory a further notice of demand dated 17th April, 1968 for Rs. 2,317.75 was also issued in similar circumstance. Amounts in both the notices were calculated on the basis of rate prescribed in item No. 19 and not 22B. The said notices purport to be notices under Rule 10A of the Central Excise Rules, 1944. The petitioner objected to the said demand contained in the notice dated 19th March 1968, by its letter dated 27th March 1968, on the ground that the goods did not fall within item No. 19 but were covered by the new item 22B. This contention was negatived by the 1st respondent as per his letter dated 17th February 1969.

(3.) During this period between 21st March 1968 and 27th May 1968, the petitioners removed goods from the Factory in accordance with the provisions of the Central Excise Act, and Rules, after filing necessary ARI forms and submitting the same to the Officer concerned. The officer assessed the duty as Nil and allowed the clearance of goods.