RAMAKRISHNA TRADING COMPANY Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE petitioner is a tobacco merchant having a L. 5 Licence. The petitioner applied for issuing a licence for a private bonded warehouse to keep his stock. He was directed to furnish a bond in Form B4, with sureties for a sum calculated at Re. 1/- per square foot with a maximum of Rs. 20,000/ -. This was complied with and he was issued a licence for a private bonded warehouse and this was renewed from time to time.

(2.) ON 21. 3. 1973, the Collector of Central Excise issued a notification in exercise of his powers under Rule 140 of the Central Excise Rules, 1944. Under this notification, the amount for which the bond should be executed in respect of a private warehouse could be normally 25% of the duty involved. Clause (ii) provides that the amount of B4 bond shall not exceed Rs. 50,000/- and shall not be less than Rs. 2,000/ -. The bond may be executed either with a surety or after depositing security. Clause (iii) provides that those who wish to execute the bond in form B4 (surety) have to be solvent themselves for the bond amount and should also name the surety/security of sufficient financial standing for endorsing the bond. The surety may be any person, firm or bank whose financial stability and solvency are not in question. The officer competent to issue the licence shall verify the financial standing and solvency of the applicant and the surety. It is unnecessary to set out the other clauses of this notification.

(3.) THE petitioner contends that this notification is in excess of the powers conferred on the Collector under Rule 140. It is also contended that if Rule 140 is so interpreted as to confer upon the Collector the power to issue a notification containing the above conditions, Rule 140 as well as the notification would amount to an unreasonable restriction on the right of the tobacco traders like the petitioner on their right to carry on their trade and would therefore infringe Article 19 (1) (g) of the Constitution.