ANNAPURAN MATCH INDUSTRIES CUDAPAH Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner applied for a licence to manufacture safety matches on 2-1-1965 and was granted the same on 10-2-1965 by the Superintendent of Central Excise, the Superintendent of Central Excise, Cuddapah. The production of matches however , commenced in the month of October, 1966 and the first clearance was effected on 29-12-66 after paying Excise Duty. The petitioner produced nearly 900 gross match boxes. Under item 38 Schedule 1 to the Central Excises and Salt Act , 1944 read with Section 3 of the Said Act matches are excisable to duty at a maximum rate of Rs. 0-65 per thousand matches. Under section 3 (3) the Governments is empowered to fix different tariff values for different classes or descriptions of the same article. Rule 8 (1) of Central excise Rules, 1944 framed under the Central Excises Act empowers the Central Government to exempt any excisable good from the whole or any part of the duty leviable on such goods. The Central Government in exercise of Powers conferred by rue 8 (1) of the Central Excise Rules and in suppression of Notification No.67/64 Central Excise dated 174- 196 issued Notification No.75 dated 30-4-1966 reclassifying the manufacturers of matches and fixing different rates of duty for matches cleared by different categories of factories. The said notification in so far as it is relevant for our purpose reads as follows. Government of India. Ministry of Finance (Dept. of Revenue and Insurance) Notification No.75, dated 30-th April 1966. In exercise of the powers conferred by Sub-Rule (1) of Rule 8 of the Central Excise Rules. 1944 and in suppression of the Notification of the Government of India in the Department of Revenue and Company Law in the Ministry of Finance No. 97/64 Central Excise,. dated the 17th April, 1964, the Central Government hereby exempts matches specified in Column (2) of the Table below, failing under item No.38 of the First Schedule to the Central Excise and Salt Act. 1944 (1 of 1944) and cleared by any manufacturers for home consumption during any financial year, from, so much of the duty of excise leviable thereon as is in excess of the rate specified in the corresponding entry in column (3) of the said table: (contd in Col. 2) TABLE -I Category. Specification of matches Ratches.

(2.) The output of the petitioner did not exceed 75 million matches per year and the production itself commenced only in October, 1966. Under Table I of the Notification such of the Manufacturers whose output in 1964-65 did not exceed 75 million matches are made to pay the lowest rate of Rs. 3-75 per gross. But the manufacturers who have not cleared any goods during the financial year for which they had licence have to pay at the rate of Rs. 4-40 per gross as per clause 7 of the proviso of that Notification. In view of clauses 4 and 6 of the proviso the manufacturers who applied for licence on or after 1-4-1966 are liable to pay at the rate Rs. 4-10 per gross while the manufacturers who applies for licence before 1 4-1966 and cleared mathes during the financial year are liable to pay only Rs. 375 per Gross. The Range Officer, Central Excise, Cuddapah Circle, 2nd respondent herein applying Cl. 7 of the Notification levied Excise duty on the petitioner at the rate of Rs..4-40 per gross which is the rate applicable to category 'B' mentioned in Table No.1 of the Notification rejecting the petitioner's plea that it belonged to category 'D' thereof in view of the fact that there was no clearance in the year 1964-65.

(3.) The petitioner also states that on and from 1--4-1967 the respondent is likely to apply cl. (4) of the said Notification and collect Rs. 4-10 per gross towards. Excise Duty from him. In this Writ petition it is contended that Clauses 4,6 and 7 of the Proviso of the Notification are arbitrary and unreasonable and make hostile discrimination which is violative of Art, 14 of the Constitution of India,. It is also contended that these clauses infringe the fundamental rights guaranteed to the petitioners under Art. 19 (1) (f) and (g) of the Constitution. Under Rule 52, unless the duty. is paid in accordance with the said Notification the goods are not allowed to be cleared. Therefore the petitioner has been paying the duty and has been leering the goods. It is contended that though the petitioner has a right of appeal and revision under section 35 and 36 of the Act against the assessment orders, those alternative remedies are not effective as the Departmental Authorities created under the Act cannot go into the constitutional validity of the Notifications of the Act or Rule or the Notification made thereunder, and has therefore, involved the jurisdiction of this Court for declaring Clause 4,6 and 7 of the Notification No.75 Central Excise D/- 30-4-66 as viod and to restrain the respondents from giving effect to the aforesaid clauses and to direct refund of Excise Duty collected from the petitioner from 27-12-1966 in pursuance of the aforesaid Clauses.