TMI Blog1980 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... n the aluminium products exported during the period. The amount of Excise duty claimed is on the differential duty as between the Central Excise duty leviable under Tariff Item 27 and the Government of India Notification No. 148/69-CE, dated 17-5-1969 issued under the Central Excise Rules. The petitioner challenges this notice on the ground that it is totally exempt from payment of any excise duty on the goods which are exported by it under bond. Additional challenge is to the competency to realise any amount of arrears due prior to six months to the issue of show cause notice dated 31-10-1979 on the ground of being time barred. 3. Section 3 of the Central Excises and Salt Act, 1944 (to be called the Act) provides that there shall be levied and collected in such manner, as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India. Section 37(1) empowers the Central Government to make Rule s to carry into effect the purpose of the Act and without prejudice to the generality of foregoing power. Sub-Section (2) also empowers the Central Government to make Rule s amongst others by clause (xvi) to provide for the grant of a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the goods intended to be removed from the place of production, curing, manufacture or storage." 6. Rule 12 empowers the Central Government that it may from time to time grant the rebate of duty paid on excisable goods if exported outside India to such extent and subject to such conditions as may be specified therein. It is in pursuance of this that the 17-5-1969 notification has been issued. That notification grants rebate to the extent set out in corresponding entry in Column 2 of the table attached to the notification. 7. The respondent's case is that the petitioner can claim the rebate in terms of notification only and no more, and must pay excise duty on corresponding amount. The petitioner however, invokes Rule 13 which provides that goods may in like manner be exported outside India, without payment of duty from a warehouse or a licensed factory provided that export is made in accordance with the procedure set out in the relevant provisions of Chapter IX of these Rules and the owner enters into a bond in the proper form with such surety or sufficient security and under such conditions as the Collector approves in a sum equal at least to the duty chargeable on the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of 17-5-1969 has no relevance and that it is entitled to export the goods without payment of any excise duty whatsoever. Mr. Sorabjee's argument is that Rules 12 and 13 are totally independent provisions and cannot be read together. The argument proceeds that Rule 12 permits a rebate to be taken in terms of the notification not only by a manufacturer but also by any other person who exports goods within 2 years from the date of payment of duty. This means that when the goods are removed from the factory, duty may be paid and goods may be kept in some warehouse and provided they are exported within 2 years from the date of payment of duty, a person will be entitled to ask for rebate in terms of notification of 17-5-1969. But under clause 13 according to Mr. Sorabjee, goods are allowed to be exported without payment of duty from a warehouse or a licensed factory provided the owner has entered into a bond. The claim of total exemption from excise duty being dependent on whether the exports have been done by entering into a bond or without a bond does not appeal to us to have any plausibility and cannot be accepted by us. 12. Mr. Sorabjee made an effort to show that there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position to enter into a bond) will be liable to get only a corresponding rebate on excise duty payable only in terms of the notification dated 17-5-1969 issued under Section 12 while the manufacturer who may have entered into a bond will be entitled to export the goods without the liability to pay any excise duty. The only reason for this differential treatment suggested by Mr. Sorabjee was that whereas under Rule 12 read with the notification of 1969 it is open to a manufacturer or any person to take advantage of the two years period mentioned in the notification to decide whether to export or not and if former then to claim rebate, the person or manufacturer under Rule 13 has to make his decision whether to export or not, immediately after goods are manufactured. We do not think that to take benefit of Rule 13 requires such immediate decision making to be done by the manufacturer like the petitioner. Under proviso to Rule 9, goods can be deposited without payment of duty in a place of storage provided by the manufacturer under Rule 47 or in a warehouse licensed under Rule 140. So far no duty is payable, only bonds have to be entered into. Goods can continue to be stored there a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identically with the same situation namely rebate of duty on goods which are exported. The only difference is that Rule 12 covers a case, where goods have been exported by a person without a bond and duty had been paid earlier and refund by way of rebate will be claimed later while Rule 13 deals with a case where goods were exported under bond without payment of duty, and the person will therefore, be liable only to pay the differential duty on the duty leviable under Tariff Item and that under the notification issued under Rule 12, it is important to note that rebate of duty on goods exported is provided under Rule 12. It is this very rebate that can be claimed when export is made under bond in terms of Rule 13. No separate rebate or exempt on is provided by Rule 13, which is procedural. Substantive right is to be found in Rule 12 read with notification of 17-5-1969. Rule 13 deals with one manner of export namely under bond. The actually benefit however, will have to be worked out under Rule 12. The provision of a bond is a facility given to the business. Under Rule 9 no excisable goods can be removed from a place until the excise duty leviable thereon has been paid. Exception has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we cannot ignore the practical reality which is that excise duty in the ultimate analysis is to be recovered from the consumers in the shape of price of the goods charged from them. It is in that context that Rules 12 and 13 are to be read together. All that Rule 13 permits is a facility and which the petitioner has been enjoying, namely that it was able to export goods without payment of duty, because it had exported under bond unlike under Rule 12 where one pays duty before removal because one has not entered into a bond therein. That the whole purpose of Rule 13 is only to provide a facility for clearance become clear by reference to Rule 14A which provides for a penalty if goods removed for export have not been exported, but except persons who have after the removal of goods but before export cleared the goods for home consumption on payment of duty as laid down in Rule 52. Similarly, under Rule 14B provision is made that no person shall remove excisable goods for export, the duty leviable on which together with the duty leviable on goods removed from the factory and not exported until such time exceeds the amount of bond executed under Rule 14. These will show that the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a bond to remove goods without payment of duty in the first instance. But that he is not liable for the excise duty if the goods are excisable. 15. We also see another difficulty in the way of accepting Mr. Sorabjee's argument, for acceptance of it would entail discrimination between those who export goods but have not given a bond and those who export goods under a bond even though the conditions and circumstances may be identically the same. On the argument of Mr. Sorabjee even if another manufacturer exported goods right from his factory and even if he specifically earmarked all his production for exports, but entered into no bond for export he would not be able to claim total exemption from payment of duty but could only ask for rebate in terms of Rule 12 read with notification of 17-5-1969 while the petitioner even if he exports after having kept his goods in a store-house or warehouse for number of months and after watching the export market and even if it not be under any commitment to export the goods and may at the last minute use it all for home consumption as recognised by Rule 14A read with Rule 52, but if he decides to export would be entitled to total exemption. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned orders of 30-11-1979 and 8-1-1980 by which the petitioner has been told that it can only clear the goods without payment of duty for export under the bond, only to the extent that duty has been exempted on the said goods, under the relevant exemption notification. The plea on this aspect by the petitioner, therefore, fails. 17. The next challenge was to the demand of arrears from the period 17-5-1969 to 23-6-1979. Rule 10 provides for recovery of duty not paid and provides that the proper officer may within 6 months from the relevant date serve a notice on the person chargeable with duty which has not paid the duty requiring him to show cause why he should not pay the amount specified in the notice. Relevant date is defined in sub-Rule 2 (ii) (a) of Rule 10 to mean in the case of excisable goods on which duty has not been levied the date on which the duty was required to be paid under the Rules. It is common case between the parties that the relevant date would be the date on which goods were cleared for export from the warehouse. Any goods which were, therefore, cleared for export from the warehouse prior to 30-4-1979 i.e. before 6 months from the date of issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refers us to (1980 E.L.T. 121) J.B. Printing Inks Ltd. v. Union of India Others. In that case a notice issued under Rule 10 called upon the petitioner to pay duty for the period 7-1-1972 onwards. This was held not to be in compliance with Rule 10. We do not think that this authority can be of any assistance to the petitioner. The first reason is that in that case the show cause only called upon the petitioner to pay duty for the period 7-1-1972 onwards. In the present case though the exact amount in terms of Rupees and Paisas is not specified the specification is broadly done by pointing out that the duty payable is differential between the duty leviable under Tariff item 27 and the amount of Excise Duty rebatable in terms of notification of 17-5-1969. Though it would have been certainly better if the exact amount was specified, it cannot be said that the petitioner cannot know as to how much duty is being demanded or in what manner to calculate the duty demanded of it. That apart even if we hold that the impugned show cause did not comply with Rule 10 in all particulars meticulously it does not mean that the show cause notice will become void. We cannot read the requirements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still punishable with death to cut down a cherry-tree in an orchard or to be seen for a month in the company of gipsies see Interpretation of Statutes by Maxwell page 238 12th Ed. There was obvious sense in giving a strict construction to penal statute and in requiring the fulfilment to the letter of statutory condition precedent to the infliction of punishment and insisting on the strict observance of technical provision concerning criminal procedure and jurisdiction page 240. This Rule of interpretation of strict construction was later on extended in England to even statutes which it was said to encroach on the rights of the subject, whether as regards person or property so that they would also be subject to strict construction like a penal act. The next stage was that the statute which imposes pecuniary burden were also made subject to the same Rule of strict construction and that is why the English Court in interpreting the taxing act stated There is no room for any intendment. There is no equity about a tax,…… but this strictness of interpretation may not always ensure to the subject's benefit, for `if the person sought to be taxed comes within the letter of the law he must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That administration of tax law must also recognise the demand of social justice, was emphasised by P.N. Bhagwati, J. in. A.I.R. 1977 S.C. 1182. 21. In welfare state like ours there is no question of having a tilt in favour of interpretation which will assist in avoiding to pay the taxes and duties which have been levied. Either the provision of law is clear that a citizen is not liable to pay that particular duty or tax, in which case of course he would be entitled to exemption; but the principle of strict interpretation being carried to the extent of holding as if there was something inherently bad or penal in the imposition of taxes and duties so that on small technicality the conclusion should be inferred that a citizen is entitled to avoid payment of tax, cannot be accepted by us as laying down a sound Rule of interpretation. We are also of the view that the Rule of strict construction applicable to penal statute like those provisions which imposed a sentence of fine or imprisonment for any alleged branch cannot in all fairness be applied in the same manner for interpreting the laws like imposition of excise or tax. To equate the law for imposition of tax or excise duty as eq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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