ROHTAS INDUSTRIES LTD Vs. SUPERINTENDENT OF CENTRAL EXCISE

JUDGEMENT

(1.) In this writ application is involved some interesting question of law though technical, which in ultimate analysis may not be very substantial. The sole petitioner in this case -- Rohtas Industries Limited -- is a company incorporated under the Companies Act. It owns various factories at Dal- mianagar in Bihar where various types of goods are manufactured. It owns a Chemical Factory where caustic soda lye is manufactured, on which is payable from time to time excise duty at specified rates. It also owns an Acid Factory, a Vanaspati Factory and a Soap Factory wherein also various goods chargeable to excise duty ere manufactured. Under the Central Excises and Salt Act. 1944 (hereinafter called the Act) were framed the Central Excise Rules, 1944 (hereinafter called the Rules). From time to time the Rules were amended. The petitioner's case is that as per instructions contained in the revised procedure for self-removal of excisable goods the licensee had to determine the amount of duty payable and could clear as much excisable products as he liked. At the end of the month he was required to submit a return in form RT 12 showing, inter alia, the quantity of goods cleared and the total amount of duty paid thereon. Such returns were submitted to the Superintendent. Central Excise S. R. P. Range, Dalmianagar, respondent No. 1, in accordance with the Rules. There was a difference of opinion between him and the petitioner regarding assessable value of the caustic soda lye as and when the monthly return was submitted to "him. According to respondent No. 1 the duty paid by the petitioner was short and, therefore, in the endorsement on the monthly return -- RT 12 -- he directed the 'petitioner to pay the duty at the enhanced rate. The sum so demanded by respondent No. 1 came to a figure over Rs. 30,000/-. The petitioner, under Section 35 of the Act, filed several appeals before the Collector of Excise, challenging the order of the Superintendent demanding more excise duty on caustic soda lye. At the time of the filing of the writ application, those appeals were pending as stated in para 4 but we were informed at the Bar that all the appeals have now been disposed of and some relief has been given to the petitioner. Be that as it may the further fact to be stated at this stage is that respondent No. 1 wrote to the petitioner a letter on 13-2-1970 to clear the Government dues, failing which he threatened to attach and sell the excisable goods belonging to the petitioner. A -true copy of this letter is annexure 1 to the writ application. The petitioner sent a reply dated 18-2-1970 stating that it had already filed appeals and, therefore, was unable to carry out the directions given in annexure 1 and asked the Superintendent, respondent No. 1. to stay the realisation of the demand. Respondent No. 1. however, reiterated his demand in his letter dated 25-2-1970 (annexure

(2.) On the same date he visited different factories of the petitioner one after another, demanded personal ledger account maintained in the different units and debited the amounts, as detailed in paragraph 8 of the writ application. In the personal ledger account of the various four factories, the total amount debited came to Rs. 31,151/87 as against the amount of Rs. 30,870/41 demanded in annexure 1. The petitioner's case is that as per amended Rules which were brought into existence by the 10th Amendment and the 12th Amendment without a show cause notice no demand for excess demand duty could be finalised and no steps could be taken to realise the demand. Its further case is that in any view of the matter respondent No. 1 had no authority or jurisdiction to make debit or adjustment entry in the accounts maintained in the various four units of the petitioner. Upon these allegations which I have stated in nutshell the petitioner has prayed for quashing of the debit entries made by respondent No. 1 in personal ledger accounts of the various factories which are annexures 3 to 6 to the writ application.

(3.) A counter-affidavit has been filed on behalf of the respondents. To state briefly, the stand taken in the counter-affidavit is that the demand of extra excise duty made bv respondent No. 1 was justified, this was not a case which was covered by the amended Rule 10 or 10-A but it was a case which was covered by Rule 9-B of the Rules. The statements in the monthly return filed by the Chemical Factory of the petitioner in form RT 12 differed from the price charged in the bails. The debits were made in exercise of the power of respondent No. 1 under Section 11 of the Act The extra debit to the tune of Rupees 1,042/60. as alleged by the petitioner in the writ application, was explained thus. The total demand in regard to ten items was to the tune of Ruees 30,870-68. The petitioner filed appeals before the Collector only as against seven items and paid the extra demand in three items, the total of which was Rs.761/41. Thus, the deficiency to the tune of Rs. 30,109/27 remained. A sum of Rs. 1,042/60 was claimed on some different account and thus the total debit amount of Rupees 31,151/87 was justified, according to the stand in the counter-affidavit. In paragraph 16 of the counter-affidavit it is explained how the power under Section 11 of the Act was exercised by the authority in the following terms--