Excise recovery challenged for procedural non-compliance, with interim protection granted pending further proceedings.

Interim protection was granted against excise recovery where the petitioner alleged that sample collection and penalty action were taken without compliance with Rule 776 of the U.P. Excise Manual and without the notice required under Section 74-A(1). The State admitted that Rule 776 had not been complied with in letter and spirit and that no notice had been issued before action. In view of these admitted procedural lapses, the court required further consideration of the challenge, stayed full recovery pending further proceedings, and permitted only partial retention of the recovered amount in fixed deposit after a 25% deduction.

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Issues: Whether the impugned excise action and recovery were liable to be interfered with at the interim stage for non-compliance with Rule 776 of the U.P. Excise Manual and absence of notice under Section 74-A(1) of the Excise Act.

Analysis: The petitioner challenged the recovery and penalty on the ground that the samples were drawn without compliance with Rule 776 and that no show cause notice was issued before action under Section 74-A. On query, the State fairly indicated that Rule 776 had not been complied with in letter and spirit and that no notice under Section 74-A(1) had been given. In view of the admitted procedural lapse, the matter was found to require consideration and interim protection was granted against full recovery pending further proceedings.

Outcome: The respondents were directed to file counter affidavit, the petitioner was permitted to file rejoinder, part of the recovered amount was to be retained in a fixed deposit after deduction of 25%, and the matter was directed to be listed again.

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