SHIVA GLASS WORKS CO. LTD. versus ASSISTANT COLLECTOR OF CENTRAL EXCISE AND OTHERS.

Citation: [1991] 1 S.C.R. 43 · Decided: 11-01-1991 · Supreme Court of India · Bench: N.D. OJHA · Disposal: Dismissed

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Judgment (excerpt)

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SHIVA GLASS WORKS CO. LTD. 
v. 
ASSISTANT COLLECTOR OF CENTRAL EXCISE AND OTHERS. 
JANUARY 11, 1991 
[N.D. OJHA AND K.N. SAIKIA, JJ.] 
Central Excises and Salt Act, 1944/Central Excise Rules, 1944: 
Section 3/Rules JO and JOA-Assessee-Price list of goods furnished-
Accepted provisionally-Excise duty paid-Goods cleared-Discre-
~--'.," pancy-Detected late:-Recovery of excise duty-Whether permissible. 
The appellant company a licensee under the Central Excises and 
Salt Act, 1944 and during the relevant period namely 1st September, 
1961 to 26th September, 1963 carried on the business of manufacturing 
different types of glasswares which were excisable goods under the Act. 
The appellant used to present A.R.I. forms accompanied with 
price lists of the goods and after paying excise duties calculated on the 
basis of the price lists used to remove the goods. The office of the 
appellant was searched by the Excise Authorities on 26th September, 
1963 and several documents, books and papers were seized, and as a 
consequence thereof it transpired that the appellants were maintaining 
two sets of bills. The bills of one set were those on the basis of which the 
appellant used to pay excise duty befQre clearance of the goods and 
those of the other were such which were never issued to the dealers. In 
these two sets of bills, the rate of discount was differently shown. 
A notice dated 26th March, 1968 was served on the appellant by 
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the Assistant Collector stating that it appeared that during the relevant 
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period the appellant had n~t paid excise duty. on the goods at the prices 
at which they were s·old, but duty was paid at lower rates and requiring 
it to show cause as to why duty on the prices at which the goods were 
actually sold, as found on scrutiny of sale vouchers/sale documents 
should not be recovered under Rule lOA of the Central Excise Rules, 
1944. In reply the appellant asserted that it was the provision of Rule 10 
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and not Rule 1 OA which was attracted to the facts and consequently the 
initiation of proceedings was barred by time. This plea did not find 
favour with the Excise Authorities, and the appellant was required to 
pay the additional duty ofRs.1.41 lakhs. 
The aforesaid order was challenged by the appellant before the 
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43 
44 
SUPREME COURT REPORTS 
[1991) 1 S.C.R. 
A 
High Court under Article 226 of the Constitution and a Single Judge 
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acceptt:d the contention of the appellant that Rule 10 and not Rule lOA 
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of the Rules was applicable and on this view quashed the order dated 
26th August, 1968. 
The respondents preferred an appeal to the Division Bench which 
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has reversed the order of the Single Judge, on the finding that it was a 
case falling under Rule 1 OA and dismissed the writ petition. 
In the appeal to this Court it was contended that the Single Judge 
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was right in taking the view that the case fell within the purview of Rule 
10 of the Rules and that the Division Bench committed an error in 
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reversing the judgment, while the Revenue contested the appeal urging 
that on the facts found by the Division Bench, and indeed on the case set 
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up by the appellant itself no exception could be taken to the finding of 
the Division Bench that it was Rule lOA and not Rule 10 which was 
attracted to the facts of the case. 
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Dismissing the Appeal, this Court, 
HELD: 1. The question as to whether Rule 10 or Rule lOA was 
applicable has to be determined in the background of the procedure 
which was followed. The legal position is that Rule lOA does not apply 
where the case is covered by Rule lOofthe Rules. [48E] 
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N.B. Sanjana v. Elphinstone Mills, [1971] 3 S.C.R. 506, relied 
on. 
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2. Simply because Rule 9B of the Rules, was conceded not to have 
been taken recourse to by the respondent~ so that provisional assess-
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ment could be said to have come into existence in its statutory sense as 
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contemplated by the said rule when duty was paid at the time of clea-
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ranee of the goods, the conclusion was not inescapable, that a f'.mal 
assessment had came into being at that time. [49A-B] 
3. In view of the procedure adopted by the appellant it was appa-
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rently a case where duty was calculated on the basis of price lists sup-
plied by the appellant to facilitate the clearance of the goods and the 
correct amount of duty payable was yet to be determined after subse-
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queµt verification, and appellant was under an obligation to pay, on 

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