TMI Blog1967 (3) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ere sealed and shunted out of the factory on a proper gate pass, not only under the ruling of the Board but also on the application of the Rules as explained here these goods became free of the enhanced duty. The recovery was accordingly erroneous. The duty collected must, therefore, be refunded and we order accordingly. - 30 of 1966 - - - Dated:- 16-3-1967 - M. Hidayatullah, S.M. Sikri and C.A. Vaidialingam, JJ. [Judgment per : Hidayatullah, J.]. - The appellant is a public limited company which carries on the business of manufacturing and selling wholesale paper and boards at Brajrajnagar in the State of Orissa. The appellant company holds a licence under the Central Excise Act in Form L-4 prescribed by the Central Excise Rules, 1944. The appellant company's factory and its premises and precincts have been demarcated under the said Rules. The factory is traversed by railway lines, because the appellant company enjoys the benefit of a private siding. In 1960, the appellant company constructed a new railway siding outside the original factory premises where bamboos and other raw materials were stored and constructed a platform for loading and unloading. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of appeal and representation to the proper authorities under the Excise Act. 4. The matter was then placed by the appellant company before the Assistant Collector, Central Excise, Cuttack and the company requested that the differential duty be refunded as it has been illegally collected. The Assistant Collector rejected the claim and confirmed the collection of differential duty. The appellant company appealed to the Collector of Central Excise, Calcutta and Orissa but the appeal was dismissed on March 12, 1962. The appellant company then filed an application for revision against the order of the Collector of Central Excise, Calcutta and Orissa before the Government of India (Central Excise Revision Application No. 473 of 1964). The application for revision was rejected by the Government of India on June 7/18, 1963. No reason was given in the order communicated to the appellant company. The present appeal has been filed by special leave against the last order. 5. The first contention in this appeal is that the order of the Deputy Superintendent confirmed by the Assistant Collector, the Collector of Excise and the Central Government was illegal and contrary to the provisions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be levied and collected in such a manner as may be prescribed duties of excise on all excisable goods which are produced or manufactured in India at the rates set forth in the First Schedule. Section 4 which is headed "Determination of value for the purposes of duty" provides that where any article is chargeable with duty at rates dependent on the value of such article such value shall be deemed to be the wholesale cash price for which an article of like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other permises of manufacture or production for delivery etc. The emphasis in Section 4 is on the time of removal of the article chargeable with duty from the factory. This is the only guidance which the Act furnishes. We may now turn to the Rules. 8. Under the Rules, duty means duty payable under Section 3 of the Act above-mentioned. Rule 2(xv) defines warehouse as any place or premises appointed or licensed under Rule 140. We now come to Chapter III which deals with levy and refund of, and exemption from duty. Rule 7 provides that every person who produces, cures or manufactures any exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage of excisable goods on which duty has been paid. 9. The Rules make a distinction between manufactured and unmanufactured goods. The relevant rules may also be seen. Rule 25 provides for unmanufactured goods and rules 52 and 52-A for manufactured goods. Rule 25 deals with clearance of unmanufactured products on payment of duty. This rule applies to a curer who may apply to an officer to get the goods weighed and duty assessed. If the duty so assessed is then paid the curer is granted a transport permit authorising him to remove the products to any destination named by him. Rule 52 deals with manufactured goods. It deals with clearance on payment of duty. The rule reads as follows :- * * * * We may also refer to Rule 52-A which provides for the actual removal of the goods from the factory. The rule provides that no excisable goods shall be delivered from a factory except under a gate pass signed by the owner of the factory and counter-signed by the proper officer. Such a gate pass is made out in triplicate and must be presented to the proper officer for counter-signature at least one hour before the actual removal of the goods from the factory. In the present case a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne (extended to 31st December under certain conditions) of the year following that in which they are harvested or deposited. On the other hand Rule 49 payment of duty is not required in respect of goods made in a factory until they are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from a store-room or other place of storage approved by the Collector. The only exception to this is their removal to a licensed warehouse. Rule 52 then says that when the manufacturer desires to remove goods on payment of duty from the factory or store-room or other place of storage, he can get the duty assessed, pay it and get a clearance and a gate pass. He must then remove the goods and such goods must not lie in the factory etc. or after removal re-enter the premises (vide Rule 51-A). 12. It will thus be seen that in the case of manufactured goods the payment of duty and the clearance of goods may be synchronous or the payment may be postponed although the goods may be removed (provisos to Rule 9). This immediately sets up two kinds of cases in respect of manufactured goods. The critical time thus becomes the removal from the factory or ware- hous ..... X X X X Extracts X X X X X X X X Extracts X X X X
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