TMI Blog1964 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... hey had got mixed up with other processed goods and were again brought over the folding department and so the folding reports were made twice over by the folders. It also produced all its relevant books to show how the mistake had occurred. Respondent No. 1 who is the Superintendent of Central Excise by his decision dated April 16 1960 came to the conclusion that the mills-company had not satisfactorily accounted for the variation of 63452 length yards and taking all the facts into consideration he held the mills-company guilty of the offences with which it had been charged and by his order of the same date he imposed a penalty of ₹ 100/- for breach of Rule 226 for writing incorrect account in R.G. 1 and he also demanded duty amounting to ₹ 7298.51 nP. under Rule 9(2) of the Central Excise Rules 1944 on 63452 length yards which were not accounted for. The mills-company filed an appeal on July 7 1960 and the Deputy Collector of Central Excise who heard the said appeal passed the following order on Nov. 2 1960: Having regard to all the facts of the case and taking into account the contentions put forth by the appellants I hereby order that the decision of the Superinte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice and the party was not given an opportunity to be heard on that important point. He has produced a copy of the order received by him dated November 5 1960 which also contains a post-script as under: Copy to: (1) The A.C.C. Ex. Ahmedabad. (2) the Supdt. C. Ex. (Tex.) Abad with case record. Please acknowledge receipt. He has not included Rule 9 in chargesheet. Party has not been given opportunity to reply on this important point. He may adjudicate case de novo. (3) The C.A.O.C. Ex. Baroda. The Deputy Collector of Central Excise Baroda who heard the appeal Shri C.L. Nangia has also filed an affidavit along with the return of the respondents and his stand is that it was urged before him that the duty had been charged under Rule 9 but the mills-company was not given an opportunity to explain the charge under Rule 9 in the show cause notice and do the notice was clearly defective. He has stated in para 3 of his affidavit as under: Hence it was not necessary to go in the merits on the case. The party was not given opportunity to reply on this important point hence I decided to quash the order passed by the Superintendent Central Excise (Tex.) Ahmedabad and ordered do get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper registers and and dealt with cases of failure to maintain those registers as prescribed therein. Rule 9(1) provides that no excisable goods shall be removed from any place were they are produced cured or manufactured or any premises appurtenant thereto which may be specified by the Collector in this behalf whether for consumption export or manufacture of any other commodity in or outside such place until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these rules or as the Collector may require and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form. Then there are certain provisos with which we are not concerned. The scheme of these rules has been interpreted by a decision of the Division Bench consisting of the present Chief Justice and my learned brother in Special Civil Application No. 751 of 1961 decided on July 31 1964 Chhotalal v. C.L. Nangia (1965) VI G.L.R. 137). In the judgment of the present Chief Justice it is pointed out that there is a clear difference between proceedings for assessment under Rule 52 and the proceedings by way of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uarded under Article 19(1)(0 and (g) is affected as from the time the demand was made. The effect of this decision is that from the time of the demand the liability of the manufacturer to pay the duty arises. It is true that the manufacturer has a right to object and to be heard it being a quasi-judicial order but that does not mean that the demand is a mere notice to show cause which does not create any binding obligation. Mr. Nanavati contended that unless there was an order of final adjudication the notice was really ineffective. In view of the clear pronouncement of this Court we cannot agree with that contention. It is a binding order as soon as the duty is demanded under Rule 9(2) although in the first instance it is made ex-parte as in cases of other judicial orders where are made ex-parte or then delay is condoned ex parte. Such orders which create binding obligations from the date of the initial order itself do not cease to be binding orders merely because the other side has a right to appear or get the same set aside in the said proceeding or in an appeal. 5. We also cannot agree with Mr. Nanavati that no appeal lay against the demand of duty made by respondent No. 1 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properly appointed to hear such appeal under Section 35. Once therefore a notice of demand was issued under Rule 9(2) by the Central Excise Officer the appeal was competent under Section 35 and we cannot agree with Mr. Nanavati that the appeal was wholly incompetent. 6. The main controversy which is therefore to be resolved is as to the effect of the appellate order. Section 35 makes the order passed in appeal under Section 35 final subject to the power of revision conferred on the Central Government under Section 36. It is not in dispute that no revision application whatsoever was filed by any party and so the order passed by the appellate authority in the present case had become final. Mr. Nanavati contended that the effect of the post-script dated November 5 5 1960 was of incorporating a remand order in the original order itself dated November 2 1960 The words of the post-script leave no doubt that it was merely a departmental communication intended to reach the officer concerned. It was really the view expressed by the appellate authority as to the legal effect of his appellate order intended to be conveyed to his department. The appellate authority who has passed the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y had been ordered to be refunded. In view of the finality conferred by Section 35(2) of the Act to the appellate decision the petitioner mills-company could not be vexed twice. 7. Mr. Nanavati urged that this notice issued in January 61 shows that besides variations there was an additional ground that Rule 9(1) had been contravened inasmuch as the mills-company had removed the same length yards 63452. This was clearly an afterthought and that is why the notice dated December 30 1960 was cancelled and the impugned notice was issued on January 13 1961 This is clear from the fact that the stand in the return is that the fresh notice was issued and the proceedings were started de novo in view of the remand order by the appellate authority. If in fact there was no remand order made by the appellate authority respondent No. 1 would have no jurisdiction to start de novo proceedings in this manner. If there was any error in the final appellate order it could have been corrected in revision only under Section 36. That remedy having not been invoked the order had become final and the matter could not be reopened by respondent No. 1 by issuing a demand notice. Mr. Oza rightly relied on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
