LexASSISTANT COLLECTOR OF CENTRAL EXCISE, CALCUTTA DIVISION versus NATIONAL TOBACCO CO. OF INDIA LTD.
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822 ASSISTANT COLLECTOR OF CENTRAL EXCISE, CALCUTTA DIVISION v. NATIONAL TOBACCO CO. OF INDIA LTD. August 9, 1972 [A. N. RAY, I. D. DUA AND M. H. BEG, JJ.] Central Excise Rules-Rule 10. and lOA, Whetlwr tlw impUlned notice fell under Rule 10 to be ineffective and barred by limitation. The respondent malllli'acturea ciprettea II( its factory 11p0o wbleh Excise Duty is levied by the Assistant Collector of Central Excise, Calcutta Division. The rates varied accordina; to the provision& ot Finance A.ct, 1951, and 1956 and the Additional Duty of Excise (Goods of Special Importe~ce) Act, 1957. The Company was required to furnish quarterly consolidated price lists and the. particulars Of cigarettes to be cleared were furnished by llhe Company as. required by Rule 9 of ~ Central Excise Rull'". Fot faciUtating collection of duty, the Company maintained a large sum of money in a Current Account with the Central &cise authoritil'", who used to debit this account for the duty leviable on each stock of cigarettes allowed to be removed. The Company used to furnish its quarterly price lists to the Collector on forms containing nine columns R!ld until July 1957, so long as this form was used by the Company, no difficulty was experienced in checking prices. Bu~ after this column .was dropped from the new fom1 of si" columns, the Excise authorities encountered some difficulty in valuing the cigarettes for levying Excise Duty. They tllerefore, changed the basis of assessment from the Distributors selling priee to the wholesale oash selling price at which stockists or agents were selling the same in the open market. The authorities informed the Company of this change of basis on 5-11-58 bv letter, which also asked the Company to furniSh its price lists immediately for determining the correct assessable value of its cigarettes. Two days thereafter, the authorities served a notice upon the Company demanding payment of Rs. 1,67,072,40 P. as Basic Central Excise Duty and R•. 74,574,85 P. as Additional Central Excise Duty on ground of short levy for a certain brand of cigarettes cleared from Company's Factory between 10th August 1958. After another five cklys, the authori- ties sent another notice demanding more than Rs. 6 lakhs as Basic Central Excise Duty and more !ban Rs. 2 lakhs as Additional Central Excise Duty. On too following day, the authorities ~t a tlilid notice under Rule 10-A of the Central Excise Rules, demanding more than Rs. 40,000/- as Central Excise Duty and more than Rs. 16,000/· as AdditionaI Duty. The Company challenged these notices by e. writ before the High Court. The High Court quashed the notices on the ground that the Coolpany had not been given an opportunity of being heard. No appeal was filed by the other side against this decision, but when the case went back to the Colleclior, he issued a fresh notice on 24-4-1960. By th~ notice, f~r certain periods. a sum of more than Rs. 10 Iakhs was levied as B~c Central Excise Duty and a total sum of more than Rs. 3 lakhs as Addi- tional Duty, and Ibis amount had been provisionally debited in the Com- pany's Accouiit on the basis of the price list ~upplied by the Co:npan_y and the Company was informed that if it desired a personal hearing, ti B c D E ' G H • ,\ J ' ASST. COLI.ECTOR v. NATIONAL TOBACCO CO. LTD. 823 (Beg, J,) A can apl'ear before the authorities to nrnke the final assessment in accord· ance with law. B c B I , G II The Company challenged the validity of this notice dated 24-4-60 O!l the ground !hat the notice was barred by. limitation and was issued without jurisdicltion, so that no proceedings could be taken. ·The learned single Judge, as well as the Divisional Bench of the High Court allowed the petition on the ground that the notice was barre& by time under Rule 10 of the Central Excise Rules because the notice was held to be fully covered by Rule 10 and by no other rule. The case was certified under Art. 33 (a). (b) and ( d) for an appeal· to this Court. Rule 10 of tho Central Excise Rules provides that when duties or charges have been short levied through inadvertence or misconstruction etc., the person chargeable with' the duty so short levied, shall pay the deficiency or pay the amount paid to him in excess on written demand by the proper officer within three months from the date on which the duty or charge is paid or adjusted in the owner's account, if any, or
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