1958 (1) TMI 1 - HC - Central Excise

Court rules Excise authorities lacked jurisdiction to stop goods clearance if duties paid, grants licenses to heirs, rejects restrictions.

The court held that the Excise authorities lacked jurisdiction to stop the clearance of goods if excise duties were paid. It interpreted Rule 178(3A) to ... Licensing Issues Involved:1. Jurisdiction of Excise authorities to stop clearance of goods.2. Interpretation of Rule 178(3A) regarding the issuance of licenses to heirs.3. Legality of the condition imposed by the Superintendent of Central Excise.4. Availability and effectiveness of alternative legal remedies.Detailed Analysis:1. Jurisdiction of Excise Authorities to Stop Clearance of Goods:The primary issue was whether the Excise authorities had the right to stop the clearance of tea manufactured at the Topia Tea Estate. The court examined relevant statutory provisions, including Sections 3, 6, and 7 of the Central Excises and Salt Act, 1944, and Rule 52, which governs the clearance of goods. The court concluded that the rules do not provide jurisdiction to stop the clearance of goods if the manufacturer is prepared to pay the excise duties. The court stated, 'The illegal condition stopping clearance is, therefore, unwarranted by law.'2. Interpretation of Rule 178(3A) Regarding the Issuance of Licenses to Heirs:The court analyzed Rule 178(3A), which states that upon the death of a licensee, the original license is terminated, and a new license should be granted to the person in actual possession of the premises. The court found that the petitioner was in actual possession and thus entitled to the license. The court emphasized, 'The direction to grant the licence to the person in actual possession is mandatory.'3. Legality of the Condition Imposed by the Superintendent of Central Excise:The court found that the condition imposed by the Superintendent of Central Excise, which allowed manufacturing but stopped clearance until a dispute among heirs was resolved, was without jurisdiction. The court stated, 'The rules nowhere provide that under the law, they can stop the sale of the goods or the clearance thereof so long as the petitioner is prepared to pay the Excise duties.' The court further noted that the proviso in Rule 178(3A) does not justify such a condition.4. Availability and Effectiveness of Alternative Legal Remedies:The court addressed the argument that the petitioner had alternative remedies available under Sections 35 and 36 of the Act. The court acknowledged that while these remedies existed, the facts of the case were undisputed and any delay would cause significant loss. The court stated, 'We would not, of course, encourage the practice of filing applications for writs before us even though specific remedies may be available under the law; but the facts in this case are undisputed, and any further delay in the matter is not only likely to cause serious loss to the petitioner but also result in loss of public revenue.'Separate Judgment by H. Deka, J.:Judge H. Deka concurred with the Chief Justice but added that even if the proviso to Rule 178(3A) were interpreted as suggested by the Excise Department, the condition could not be imposed after the license had already been issued. He stated, 'Therefore, this contention is wrong on two grounds, namely,-that the proviso does not really mean that under no circumstances licence can be issued when there is dispute between interested parties over the concerned that needs a licence, and that the licence being issued, there could be no restriction on the rights of the person concerned as to carrying on the business, like clearance of the stock or sale of the same, unless there be any other rule providing for such restriction.'Conclusion:The court set aside the condition imposed by the Superintendent of Central Excise and directed that the petitioner be allowed to clear the tea upon payment of excise duties, as provided under Rule 52. The court concluded, 'We accordingly order that the order be modified to the extent that, on the basis of the licence the petitioner will have the necessary right of clearance, subject to the payment of taxes, as provided under Rule 52 framed under the Act.'