TMI Blog1986 (2) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... an and a dealer in tobacco, without however, making payment of excise duty chargeable on such tobacco under the Act. On effecting such sales, the respondents delivered such tobacco to Subramanyam, issued him with requisite transport passes and reported that fact also to the Superintendent of Central Excise of the area. For reasons that are unnecessary to notice and examine, the cured tobacco sold by the respondents neither reached Padupalyam Gobi nor Nanjappan made payment of the excise duty on the same. In that view, the Superintendents of Hiriyur and Tumkur evidently with the approval or concurrence of their superior officers by separate but identical demands called upon them to make payment of the duty due thereon under the Act. On receipt of those demands, the respondents in Writ Appeals Nos. 387 to 390 and 394 of 1981 who were the petitioners in Writ Petitions Nos. 3510, 3511, 7400, 7401 and 7405 of 1979 paid the excise duty demanded from them under protest and the others did not make payment of the amount demanded from them. But, all of them approached this Court under Article 226 of the Constitution challenging the demands made against them and seeking for appropriate relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in a fiscal statute should be so interpreted as to make the charging provision of that statute effective is now well settled. In K.P. Varghese v. I.T.O. Ernakulam and Another- (131 ITR 597=AIR 1981 S.C. 1922) Bhagwati, J. (as His Lordship then was) referring to various passages of Lord Denning and Learned Hand has elaborately explained the principle of progressive construction of statutes in these words : "..... The task of interpretation of a statutory enactment is not a mechanical task. It is more than a mere reading of mathematical formula because few words possess the precision of mathematical symbols. It is an attempt to discover the intent of the Legislature from the language used by it and it must always be remembered that language is at best an imperfect instrument for the expression of human thought and, as pointed out by Lord Denning, it would be idle to expect every statutory provision to be "drafted with divine prescience and perfect clarity". We can do no better than repeat the famous words of Judge Learned Hand when he said : "......it is true that the words used, even in their literal sense, are the primary and ordinarily the most reliable source of interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in R.C. Jall v. Union of India (AIR 1962 Supreme Court 1281) referring to the earlier leading cases of the Federal Court and Privy Council in Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938-1978 E.L.T. (J 269) = (AIR 1939 F.C. 1) and The Province of Madras v. Messrs. Boddu Paidanna and Sons - 1978 E.L.T. (J 272) = (AIR 1942 F.C. 33) expressed thus : "Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. The method of collection does not affect the essence of the duty, but only relates to the machinery of collection for administrative convenience..." In Union of India and Others v. Bombay Tyre International Limited and Others [1983 E.L.T. 1896 = 1984(1) S.C.C. 467=AIR 1984 S.C. 1429] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceeding one month, and the account-holder shall periodically make deposit therein sufficient in the opinion of the Collector to cover the duty due on the goods intended to be removed from the place of production, curing, manufacture or storage. (1A) Where a person keeping an account-current under the third proviso to sub-rule (1) makes an application to the Collector for withdrawing an amount from such account-current, the Collector may, for reasons to be recorded in writing, permit such person to withdraw the amount in accordance with such procedure as the Collector may specify in this behalf. (2) If any excisable goods are, in contravention of sub-rule (1) deposited in, or removed from, any place specified therein, the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand made within the period specified in Section 11 A of the Act by the proper Officer, whether such demand is delivered personally to him, or is left at his dwelling house, and shall also be liable to a penalty which may extend to two thousand rupees, and such goods shall be liable to confiscation. Explanation - For the purposes of this rule, excisable goods produced, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch products on which duty has not been paid. Rule 29. Continuance of curer's liability for payment of duty : When the curer sells unmanufactured products other than unmanufactured tobacco without payment of duty as provided in Rule 24, both the purchaser of the products and the person into whose possession the projects pass after purchase shall become liable for the payment of the duty due thereon ; but the curer shall not be absolved from the liability laid upon him by Rule 19 until the transfer of ownership has been .reported to, and acknowledged by the proper officer. Rule 49. Duty chargeable only on removal of the goods from the factory premises or from an approved place of storage : (1) Payment of duty shall not be required in respect of excisable 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 storeroom or other place of storage approved by the Collector under Rule 47 : Provided that the manufacturer shall on demand pay the duty leviable on any goods which are not accounted for in the manner specifically provided in these rules, or which are not shown to the satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable thereon had been paid. 10. Rule 19 expressly deals with the liability for duty when there is curing of a product and the same is ready or fit for sale. Under this rule the curer who is the manufacturer is always made liable for payment of duty notwithstanding its liability or its postponement as set out therein or other Rules. Rule 24 which only provides the manner and method of disposal of the produce by the curer nowhere absolves his liability for payment of duty created by the Act and Rules 9 and 19 of the Rules. With this we now come to Rule 29 which is the main plank of the respondents. 11. Rule 29 only enables the authorities to collect duty from the purchaser or cured tobacco however expressly preserving the liability of the curer for the same at all events and at all times. The terms "transfer of ownership has been reported to and acknowledged by the proper officer' occurring at the end of this rule do not cut down the liability of the curer imposed in the earlier part of that very rule, by Section 3 of the Act and the other Rules noticed and analysed by us earlier. The rule does not completely irrevocably and absolutely transfer the liability of the curer on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ownership of the tobacco and the same has been acknowledged by that officer, his liability should be taken to have ceased under Rule 29. In my view, therefore, the order of the Superintendent of Central Excise, Integrated Divisional Office, Erode, demanding a sum of Rs. 2,388.96 and affirmed by respondents 1 and 2 has to be set aside and is accordingly set aside." Without reference to the views expressed herein Srinivasa Iyengar, J. had expressed the same view with which we have expressed our dissent. For those very reasons, with respect, we dissent with the views expressed by Ramanujan, J. in Karuppannan's case. 16. In their treatise on the law of 'Central Excise' the authors have only re-produced the passage found in Karuppannan's case without an independent reasoning. We, therefore regret our inability to subscribe to the views expressed by the learned authors. 17. On the foregoing discussion, it follows that the demands made against the respondents who had not paid the duty, which had not been collected from the purchasers were legal and valid and the writ petitions filed by them were, therefore, liable to be dismissed. 18. In the result, we allow these appeals, set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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