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TMI Blog1985 (12) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... heir factory at Pudukkottai. Their tobacco warehouse at Puliampatti is solely intended as a centre for procurement and storage of tobacco from the growing areas surrounding Punchai Puliampatti for eventual transport to their warehouse at Pudukkottai and subsequent use in manufacture of chewing tobacco at their factory at Pudukkottai. The other facts of the case as found by the Tribunal are contained in Paragraph 5 of the order which are reproduced below :- On information that the appellant firm was evading payment of excise duty on tobacco to the tune of several lakhs during the years 1970-1976, officers of the Department of Central Excise, Directorate of Revenue Intelligence and Income Tax searched, amongst other places, the warehouse premises of the appellant at Puliampatti and Pudukkottai and the residential premises of one Mohamed Yusuf, an employee of the appellant firm between 1963-1974, employed in writing the Central Excise accounts of the firm. They also seized various documents, both official ones kept in the course of business at Pudukkottai, and private accounts said to be relating to the appellant in respect of transactions at Puliampatti and/or Pudukkottai. On interr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tobacco accounts for Puliampatti warehouse for 1973-74 and entered as having been sent to Pudukkottai in the private books of accounts seized from Yusuf's premises. (iv) Receipt of 88,200 Kgs. of tobacco at Pudukkottai without cover of proper transport documents on the basis of the statement of accounts (Private) seized from Yusuf, which is a sort of balance sheet of transactions referring to the Puliampatti warehouse, but indicates how many bags of Choodi weighing the above quantity had been sent to the Company. On the above basis the Collector found that a quantity of 2,51,400 Kgs. of tobacco had been received without the cover of proper documents at Pudukkottai; demand for duty in respect of this quantity was made in terms of Rule 20 of Central Excise Rules which inter alia provides that - if any goods are received in a warehouse without cover of a valid transport document in contravention of the provisions of Rule 40, the person who receives or has in his custody of this tobacco, is liable to pay the duty leviable on the tobacco and to a penalty which may extend to two thousand rupees apart from the tobacco being liable to confiscation." Thus by his Order No. V/4/15/10/79 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this order. Now we proceed to deal here with only those questions which we find are referable though in a somewhat modified form :- Question 1 separately and Questions 2 to 5 merged together are being referred in a modified form. Question 1 - "Whether in the facts and circumstances of the case the proceedings are barred by limitation under Sec. 40(2) of the Central Excises and Salt Act, 1944 as it stood prior to its amendment on 19-5-1973." The Tribunal has found that it is not so barred. In doing so it has relied on the decision of the Madhya Pradesh High Court in the case of 'Universal Cables Ltd., Satna v. Union of India and Others (1977 TLR 1825). Briefly, their Lordships of the Madhya Pradesh High Court interpreted the term 'other legal proceedings' in Section 40(2) by referring to the Rule of ejusdem generis as the words 'other legal proceedings' followed the words 'suit' and 'prosecution', proceedings before a Court of Law and not before a quasi-judicial authority. They also referred to the word 'instituted' occurring in Section 40(2) and felt that this lent support to their view that "other legal proceedings" is something instituted in a Court of Law and not before d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment on 19-5-1973." Question 2 - "Whether in the facts and circumstances of the case the Tribunal was correct in holding that mere receipt of unmanufactured tobacco otherwise than under a valid permit granted by an officer showing that proper duty had been paid and thus contravening the provisions of the Rule 40 of Central Excise Rules, 1944 shall render the receiver of such goods liable to pay the duty leviable thereon irrespective of the fact whether the goods had suffered duty earlier or not and whether the liability to pay the amount calculated as the duty is by way of a penalty." Question 3 - "Whether the invoking of the provisions of the said Rule will be vitiated by the fact that the goods are received in a bonded warehouse or in any other place." Question 4 - "It the answer to (2) above is in the negative whether the provisions of Rule 10 would be attracted in a demand for duty in terms of Rule 40." The approval of the President to refer the above questions to the Supreme Court is solicited. ANNEXURE 'B' Questions of Law raised in the Reference Application RA(MAS) No. 7/84 of M/s. A.M. Abdul Rahiman Rowther & Co., Pudukkottai. 1. Whether the provision of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy in the instant case, in view of the provisions of Rule 9A(5) of the Central Excise Rules, according to which appropriate rate of duty was nil when the demand was raised or when the show cause notice was issued on 22-7-1980. 10. Whether Customs and Gold (Control) Appellate Tribunal at Madras had no jurisdiction to deal with contentions with reference to relief under the provisions of Rule 9A(5) of Central Excise Rules when raised along with other issues admitted as falling within its jurisdiction. 11. Whether on the evidence on record when no case of an offence under Rule 151(c)(d) or a mischief of the provision of Rule 171, of Central Excise Rules, was either alleged or found, duty of excise could be demanded and recovered by invoking Rule 40 of the said Rules. 12. Whether on the basis of the evidence of statements of persons and without the trace of any goods involved in such statement, a finding of illicit transport and illicit receipt of non-duty paid tobacco in the warehouse be found established. 13. Whether the Collector of Central Excise, Madurai had jurisdiction to go into the question of liability or accountability of the goods in the warehouse at Puliampatti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand was made - and at the relevant time no duty was leviable on tobacco. All that it has observed in Para 25 of the order is that in view of the interpretation given to Rule 40 the appropriate rate will be the one leviable at the time the offence of illegal receipt was committed. This question therefore does not arise from out of the order of the Tribunal and the provisions of Rule 9A(V) would hardly be relevant. As the question does not directly flow from the order of the Tribunal in regard to the points at issue before it, the question as framed does not survive for reference. Regarding Question 10 : In the light of what has been stated in respect of Question 9 this question does not survive. Regarding Question 11 : That the Collector did not make out an offence under some other Rule of the Central Excise Rules, 1944 does not by itself render the action taken by invoking one rule namely Rule 40 of the Central Excise Rules illegal or improper. This is a common enough position and is hardly worthy of reference. Regarding Question 12 : The finding is on evidence on record and is based on evaluation of factual data. Accordingly it is not referable to the Court. Regarding Questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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