ORISSA CEMENT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) IN these two writ applications, notice to show cause issued by the Additional Collector, Central Excise and Customs and to pay up the demand amount on the allegation that the petitioner has wilfully contravened the provisions of the Central Excises and Salt Act read with Rules 9(1), 49, 52 A. 173 B, 173 C and 173 G of the Central Excise Rules, 1944,is being challenged. Since identical question of law is involved, on consent of parties, the two writ applications were heard together and are being disposed of by this common judgment.

(2.) THE short question that arises for consideration is whether on the facts averred in the Notice to show cause, it can be said by this Court that there has been no contravention of the provisions of the Act and the Rules, as alleged, and as such the notice would be quashed? Incidentally, it is also necessary to determine the question whether crushing of limestones to small pieces, for manufacture of cement clinker tantamounts to 'manufacture' under Section 2(f) of the Central Excises and Salt Act (hereinafter referred to as the 'Act'') read with Chapter Note 2 of Cinpter 25 of the Central Excise Tariff Act,

(3.) ON behalf of the Central Excise authorities, a counter affidavit has been filed and the stand taken In the counter affidavit is that on the assertion made in the notice to show cause, it is not possible for this Court to come to the conclusion that there has been any inherent lack of jurisdiction with the Central Excise authority to issue the notice in question and, therefore, the Court would not be competent to interfere at the stage. The further stand taken is that the crushing of big limestone into smaller pieces does amount to 'manufacture' under Section 2(f) of the Act, therefore the petitioner must be held to have violated deliberately the provisions of the Act by nonpayment of the Duty and accordingly the authorities were justified in initiating the proceeding for levy of penalty.