TMI Blog1989 (4) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with law. - 1202 of 1974 - - - Dated:- 12-4-1989 - K.N. Singh and K.N. Saikia, JJ. [Judgment per : K.N. Saikia, J.]. - This appeal by Special Leave is from the judgment and Order of the High Court of Judicature at Madras, dated 19th July, 1972 in Writ Petition No. 1864 of 1967, allowing the petition and quashing the demand made by the appellant under Rule 10-A of the Central Excise Rules, hereinafter referred to as `the Rules', payable by the respondent under the Central Excises and Salt Act, 1944, hereinafter referred to as `the Act'. 2. M/s. Ramakrishnan Kulwant Rai, the respondent firm, owned the Steel Rolling Mill, located at No. 4-B, 4-C, North Railway Terminus Road, Rayapuram, Madras - 13. The said Mill was leased out to a partnership firm known as M/s. Steel Industries. After termination of the lease the respondent firm took back possession of the said Mill on 1-8-1962 and informed the Central Excise Authorities about this by their letter dated 16-11-1962 and resumed manufacture of Steel from scraps and was advised to take out a licence for which it applied on 30-11-1962. Though the respondent firm had ultimately sold away the Rolling Mill on 8-4-1963, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as enacted as Section 11A of the Act by the Amendment Act 25 of 1978 and that Section came into force with effect from 17-11-1980. 6. Mr. Ambrish Kumar, the learned counsel for the respondent submits that the learned standing counsel for the Central Government having conceded that the rationale of the decision in Haji J. A. Kareem Sait v. Dy. Commercial Tax Officer, Mettupalayam; 18 STC 370, which held that sub-Rule (7) of Rule 5 of the Central Sales Tax (Madras) Rules, 1957, providing for limitation and determination of escaped turnover by best judgment was in excess of the rule-making power and the sub-Rule as a whole, was therefore, invalid, would apply with equal force to Rule 10A as well and that in view of the same decision he would not be able to sustain the demands under Rule 10A and yet he could sustain the demand under Rule 9(2) of the Rules, it is no longer open to the appellant to challenge the validity of Rule 10A in this appeal, and that too after so many years. 7. Counsel for the appellant answers that the learned standing counsel thereby cannot be said to have conceded that Rule 10A was invalid. He had only said that in view of the decision in 18 STC 370, he wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Act were to be levied. Sub-section (1) of Section 3, at the relevant time, read as follows : "(1) 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, and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule." 10. In Citadel Fine Pharmaceuticals v. District Revenue Officer, Chingleput: 1973 (1) M.L.J. 99, where the enactment, namely, the Medicinal and Toilet Preparations (Excise Duties) Act (XVI of 1955) was silent on the question of levies of escaped assessment, it was held that the Rules made under that Act could not extend the charging power and Rule 12, insofar as it sought to extend the charging power under Section 3 of that Act, was held to be invalid and without jurisdiction. Rule 12 of those Rules read as follows : "12. Residuary powers for recovery of sums due to Government - Where these rules do not make any specific provision for the collection of any duty or of any deficiency in duty if the duty has for any reason been short-levied, or of any other sum of any kin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the two Sections it was observed that there was fundamental difference in their policy and scheme. Under Section 3 of the Medicinal and Toilet Preparations Act only the manner of collection of the duties was left to be prescribed by the rules and levy of the duty was to be made at the rates specified in the Schedule to the Act. In enacting Section 3 of the Act i.e. Central Excises and Salt Act, the Parliament had empowered the rule making authority to prescribe by rules the manner of levy of duties and also the manner of collection of duties of excise on all excisable goods other than salt. Manifestly the rule making power conferred by this Section is very much wider in its ambit than the power conferred on the rule making authority under Section 3 of the Medicinal and Toilet Preparations (Excise Duties) Act whereunder only the manner of collection of duties could be laid down by rules. We respectfully agree with this view. We also find that in Agarwal Brothers (supra) though one of the questions raised was the validity of Rule 10A of the Rules, the Court did not consider the said question on merits in view of the submission made by the standing counsel for the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd would be inapplicable if a case fell within a specified category of cases mentioned in Rule 10, was reiterated. 16. In D.R. Kohli v. Atul Products Ltd. - 1985 (26) E.L.T. 212 (S.C.) = 1985 (2) S.C.R. 832, this Court pointed out the differences between the two Rules namely Rule 10 and Rule 10A as : "(i) whereas Rule 10 applies to cases of short levy through inadvertence, error, collusion or misconstruction on the part of an officer, or through misstatement as to the quantity, the description or value of the excisable goods on the part of the owner, Rule 10A was a residuary clause applied to those cases which were not covered by Rule 10 and that; (ii) whereas under Rule 10, the deficit amount could not be collected after the expiry of three months from the date on which the duty or charge was paid or adjusted in owner's account current or from the date of making the refund, Rule 10A did not contain any such period of limitation". It would thus be clear that this Court interpreted Rule 10A, distinguished it from Rule 10 and applied it to the appropriate facts and circumstances of different cases. It would be reasonable to infer that in none of the cases any doubt about the va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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