AGENCY Vs. ASSISTANT COLLECTOR C EX KOLHAPUR

JUDGEMENT

(1.) This petition arises out of a demand notice issued by the Superintendent of Central Excise for a sum of Rs. 52,290, subsequently altered to Rs. 43,020, Against the petitioners.

(2.) The petitioners are a partnership firm which carries on business as wholesale dealer in yarn and cloth in Sangli. It consists of four partners and the main business they do is to purchase and sell yarn and cloth as alleged by them. They do not own any powerloom factories as such. In respect of their activities of selling yarn and purchasing cloth the Superintendent of Central Excise, Jaisingpur (Rural), acting under the provisions of the Central Excise & Salt Act, 1944 and Rules, made a demand upon the petitioner firm on the 11th of May, 1957, for a sum of Rs. 2,32,614.12 nP. as Excise Duty payable on the cotton fabrics, which he alleged were manufactured by the petitioners in the factories belong to others. The period for which they were assessed was from 1st of July, 1956 to 30th April, 1957. The petitioners made a representation to the Assistant Collector of Central Excise, Kolhapur, against the said demand notice. The Assistant Collector made an order on the 30th of September 1957, confirming that demand. The petitioners made an appeal to the Collector of Central Excise in about January, 1957, and also wrote a letter requesting for certain concessions and also requesting that the deposit required prior to the filling of the appeal be waived. In respect of their request for concessions in the demand being made on a certain basis, certain correspondence passed between the petitioners, the Collector of Central Excise and the Assistant Collector of Central Excise. The question was reopened ultimately the department agreed to levy compounded duty. The Assistant Collector of Central Excise, after giving opportunity to the petitioners to present their case in person, held that the petitioners satisfied the definition of the word 'manufacturer', that they were manufacturing the cloth in respect of which the assessment was being made but that they had adopted a circuitous method to avoid payment of duty. He held that the petitioners were liable for the entire period though they alleged that they had not even purchased the cloth manufactured by the petitioners and directed the Superintendent of Central Excise, Ichalkaranji, to revise his demand keeping in view the directions that he gave. It is this order that is sought to be challenged in this court.

(3.) It may be mentioned that after this order, an appeal has been lodged with the Collector of Central Excise on the 19th of February 1960. A letter was written to the Collector of Central Excise on 20th of January, 1960, requesting him to waive the deposit required by the rules. Some correspondence ensued and the Collector of Central Excise finally on the 4th of June, 1960, turned down the request for waiver of the deposit. The petitioners made an application to the Central Board of Revenue to waive the deposit as the ultimate control lies with the Central Board. On 21st January, 1961, Central Board informed the petitioners that the deposit could not be waived. The present petition has been filed on the 19th of January, 1961, i.e., two days before that order.