GOPIRAM BANKA Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal under Clause 15 of the Letters Patent raises a short question as to whether a demand in respect of excise duty which escaped assessment in the facts and circumstances of the case would be recoverable under Rule 10 or Rule 10A of the Central Excise Rules, 1944, (hereinafter referred to as the said Rules) framed under the Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act). While, according to the Appellant, such a demand would come within the scope of Rule 10 of the said Rules, according to the Respondents, it comes within Rule 10A thereof. The learned Judge in the trial Court having upheld the claim of the Respondents in this respect and having dismissed the writ petition preferred by the Appellant disputing such a claim of the Respondents, the Appellant has come with this appeal.

(2.) Material facts are not in dispute and may be shortly set out. The Appellant is the proprietor of a firm Rajkumar Dyeing and Printing Works and carries on the business of processing cotton fabrics in his factory at No. 11 Strand Road, Dakshineswar, under a licence issued by the Excise authorities under the said Act. Between December 1962 and August 1963, on different occasions the Appellant removed cotton fabrics processed in his aforesaid factory obtaining on each occasion the necessary permission from the Inspector of Central Excise. Such permission was sought for on applications filed in the statutory form, A.R.I., on which the Appellant claimed exemption from payment of excise duty admissible under the notification dated April 24, 1962, read with the notification dated June 13, 1962, issued by the Central Government under Rule 8 of the said Rules (hereinafter referred to as the said notifications). Under the notifications an exemption in the matter of payment of excise duty in the manner specified therein was admissible on the maximum of 20,000 sq.metres of cotton fabrics per month processed in the factory and that such exemption was available only to an independent processor which had been defined by the explanation to the notification dated June 13, 1962, to mean

(3.) The Appellant, however, was also the proprietor of a firm known as Rajasthan Weaving Factory situate at No. 2 Brojodayal Saha Road, Cossipore, where he had been carrying on the business of weaving cotton fabrics since February 1962. Therefore, he was not an independent processor and, as such, was not eligible for the exemption under the said notifications. The authorities, however, in allowing him the exemption did so being misled by the misstatement made in the application for permission for removal of the cotton fabrics processed in his processing factory as the appropriate officer was not aware that the Appellant was also carrying on the business of weaving cotton fabrics. The said position, however, was later found out in August 1963 when on August 31, 1963, a demand for payment of excise duty to the tune of Rs. 5,411 -39 P. was issued under Rule 10A of the said Rules. The said demand was issued on the following terms: