KALEKHAN MOHAMMAD HANIF Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is an appeal by the unsuccessful Plaintiff against the decree dated 13 -9 -1967, passed by the Second Additional District Judge, Sagar, in Civil Suit No. 4 -B of 1965, rejecting the Plaintiff -Appellant's claim for refund of excise duty amounting to Rs.54,589.23 paise, paid on tobacco.

(2.) THE Appellant, a registered partnership firm, carrying on the business of manufacturing and selling of Bidis had stocked duty paid and non duty paid tobacco in different godowns. The non duty paid tobacco was 242621.72 kgs., while the duty paid tobacco was 632 maunds, 18 seers and 8 chhattaks. There was a communal riot at Sagar on 9 -2 -1961. The mob looted and also destroyed the tobacco kept in the Appellant's godowns. The Appellant -firm got compensation from the Insurance Company regarding the price of duty paid and non duty paid tobacco. However, the Insurance Company refused to pay any compensation in respect of the duty that the Appellant had already paid on the duty paid tobacco, which would come to Rs. 54589.23 paise. As regards the excise duty on the non duty paid tobacco, the Government as ex gratia gesture remitted the sum of Rs. 1,11,719.79 paise. The Appellant -firm, therefore, after serving a notice under Section 80, Code of Civil Procedure filed the present suit against the Union of India contending that the Respondent had no right to retain the excise duty, which according to the Appellant, would be payable on manufacture or sale of Bidis. It has been the Appellant's contention that the excise duty paid was in the nature of an advance which could be appropriated by the Respondent only if the goods had been manufactured or sold. As the goods were not available for manufacture on account of the illegal action of the riotous mob, the Respondent under the provisions of the Central Excises and Salt Act, 1944, could not retain the amount of duty paid and the Respondent is bound to refund that amount.

(3.) COMING to the first question about the right of the Respondent to retain the excise duty already paid and the liability for non -refund, it is necessary to examine the provisions of the Central Excises and Salt Act, 1944, and the Central Excises and Salt Rules, 1944. Section 2, Sub -clause (c), which is definition Clause, defines 'curing' to include wilting, drying, fermenting and any process for rendering an unmanufactured product fit for marketing or manufacture. Clause (d) of Section 2 defines 'excisable goods' to mean goods specified in the First Schedule as being subject to a duty of excise and includes salt. Clause (f) of Section 2 defines 'manufacture' as follows: - Manufacture includes any process incidental or ancillary to the completion of manufactured product; and