TaxTMI 
TaxTMI 
2022 (6) TMI 302
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....he cost of the suit. 3. The appellants are defendants and the respondent is the plaintiff before the Trial Court. For the brevity and convenience, the parties are referred to in this judgment as per the status assigned to them before the Trial Court. 4. It is contended by the defendants that the Central Excises And Salt Act, 1944 (hereinafter referred to as "the Act")is self contained code and no civil suit is maintainable and no decree could have been passed against the defendants-appellants. It is also averred that the Trial Court has not appreciated the oral and documentary evidence produced by the defendants and has not appreciated the facts that the goods which were checked were handed over to the plaintiff under the suparatnama and therefore, the goods were in physical possession of the plaintiff. It is contended that the plaintiff could not have claimed any damages against the defendants. It is also contended that while checking the goods appropriate panchnama was prepared in presence of the plaintiff's son. It is also contended that the defendants were not liable for the incident of fire which took place between 21.10.1979 and 23.10.1979. It is also contended that the....
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....at the plaintiff used to maintain necessary books and registers as per the Central Excises Laws and he is doing the processing work of tobacco in the warehouse with the previous permissions of the officers of the Central Excise. That the officers of the Central Excise used to do checking of the stock every year and every thing was being done by the plaintiff with the previous permissions of the officers of the Central Excise. 6. It is the case of the plaintiff that his warehouse is situated at Station Road on the public road at Anand and he has also kept the warehouse at Raipur (Madhya Pradesh) and he used to stay at Raipur M.P. According to him, he has entrusted the work of warehouse situated at Anand to his son Mahendrakumar and his near relative Chhaganbhai and he was staying at Raipur M.P. for his business purposes. It is contended that prior to 21.02.1979, stock checking was carried out by the officers of the Central Excise from the warehouse of the plaintiff in presence of the plaintiff and at that time, all the stocks were found to be proper and thereafter the plaintiff left for Raipur M.P. 6.1. It is contended by the plaintiff that on 21.02.1979, the officers of the C....
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....ght fire and therefore to save their skin the defendants have served notice on 29.10.1979 after 6 months by mentioning the date 28.09.1979 wherein contention were false and got up. According to the plaintiff, thereafter, the plaintiff requested the defendants to permit him to dispose of the remaining tobacco but it was not granted. It is also alleged that the defendants have abused their powers and authority and have acted illegally and prepared false panchnama and though the plaintiff has brought to their notice, nothing was done and therefore all the defendants are severally and jointly liable for the loss and damages suffered by the plaintiff. 6.3. It is also alleged that the defendants have not acted bonafidely and they have not discharged their duties in accordance with law. 6.4. On the aforesaid grounds, the plaintiff has filed suit for permanent injunction for restraining the defendants from taking action against him under the show cause notice and also for damages to the tune of Rs.9,94,049.37/- which includes the interest of Rs.60,671/- along with the interest and the cost from the defendants. 7. The defendants have resisted the suit inter alia contending that the....
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....ended that the suit itself is not maintainable under Section 40 of the Act and it is time barred. On all these grounds, the defendants have prayed to dismiss the suit with cost and to award compensatory cost under Section 35(a) of the CPC. 8.On the basis of the pleadings of the parties, the Trial Court has framed issues at Exhibit 47 which reads as under:- "1. Whether the plaintiff proves that he is entitled to recover Rs.9,33,378.37 p. From the defts? 2. Whether the plaintiff is entitled to interest as claimed? 3. Whether the plaintiff proves that the suit notice dtd.29/9/79 is illegal? 4. Whether the plaintiff proves that the notice served by the defendants dt.29/9/79 is time barred? 5. Whether the suit is barred by the law of limitation? 6. Whether the suit is not maintainable as per Sec.40 of the Central Excise Act? 7. Whether the plaintiff is entitled to declaration and injunction as prayed for? 8. What is due to the plaintiff from the defendants? 9. What order and decree? No more sought." 9. It appears from the record that on the basis of oral and documentary evidence and submissions made b....
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.... Details of Oral Evidence Exhibit No. 1 Chandrakant Himmatlal Jardos (defendant no.1) 168 2 Narendrabhai Ishwarlal Mehta (defendant no.2) 178 3 Chandramohan Amratlal Mahera (defendant no.3) 203 Documentary evidence Sr. No. Details of Documentary Evidence Exhibit No. 1 True copy of the plaintiffs statement in Criminal Case No.1766 of 1982 dated 09.04.1979. 140 2 True copy of the plaintiffs statement in aforesaid Criminal Case dated 24.05.1979. 141 3 Copy of panchnama dated 21.02.1979 prepared by the defendants regarding the tobacco in the plaintiffs warehouse. 149 4 Copy of statement of stock declaration dated 21.02.1979 150 5 Copies of schedule A and schedule B showing the stock position of tobacco bags in connection with the aforesaid panchnama 151 and 152 6 Copy of statement of Arvindbhai Manibhai Patel recorded before the Superintendent Police Inspector, Central Excise Department, Anand dated 02.03.1979 153 7 Certified copy of deposition of Chandrakant Himmatlal Jardos, defendant no.1 in criminal case no.1766 of 1982 175 8 Original warehouse register (part-3) maintaine....
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....3.10.1979. He has submitted that the plaintiff has filed the present suit against the defendants for recovery of damages as well as against the show cause notice alleging that the show cause notice was not issued within the limitation period as envisaged in the Act. He has submitted that the Trial Court after recording the evidence of both the sides, has misread the evidence and have also misread the provisions of the Act and has wrongly come to the conclusion that the show cause notice was time barred. He has submitted that against the show cause notice, the plaintiff has already filed appeal and revision before the appropriate authority under the Act. He has submitted that since all these departmental proceedings were attended by the plaintiff even during the pendency of the suit, there was no question of declaring the said show cause notice as illegal and time barred. 15.2. He has also submitted that the Trial Court has misread the evidence and has not properly appreciated the entire evidence on record. He has also submitted that pending the first appeal, the amount had already been deposited by the defendant before the Trial Court and 50% amount was allowed to be withdrawn b....
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....we are called upon to answer in the present appeal. 5. The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristic and constitute a genus) is required to be determined. By the application of this rule the scope and ambit of the general words which follow certain specific words constituting a genus is restricted to things ejusdem generis with those preceding them, unless the context otherwise requires. General words must ordinarily bear their natural and larger meaning and need not be confined ejusdem generis to things previously enumerated unless the language of the statute spells out an intention to that effect. Courts have also limited the scope of the general words in cases where a larger meaning is likely to lead to absurd and unforeseen results. To put it differently, the general expression has to be read to comprehend things of the same kind as those referred to by the preceding specific things constituting a genus, unless of course from the language of the statute it can be inferred that the general words were not intended to be so limited and no absurdity ....
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....before a Division Bench of the Madhya Pradesh High Court in Universal Cables Ltd. v. Union of India, [1977] ELT (J92) wherein the question raised for determination was whether penalty proceedings taken under Rule 173Q for the infraction of Rule 173C with a view to evading payment of duty fell within the expression `other legal proceeding' used in the said sub- section. The High Court conceded that the expression when read in isolation is wide enough to include any proceeding taken in accordance with law, whether so taken in a court of law or before any authority or tribunal but when read with the preceding words `suit' or `prosecution' it must be given a restricted meaning. This is how the High Court expressed itself at page J 106: "Now the language of section 40 (2) is: `no suit, prosecution or other legal proceeding shall be instituted'. `Suit' and `prosecution' which precede the expression `other legal proceeding' can be taken only in a Court of Law". After stating the expanse of the ejusdem generis rule, as explained in Amar Chandra v. Excise Collector, Tripura, AIR. 1972 SC 1863 at 1868 (Sutherland, Volume 2 pages 399-400) the High....
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....l Court. He has submitted that the Trial Court may be directed to disburse the same to the plaintiff by dismissing the present appeal. He has also submitted that prior to filing the suit, the plaintiff has already issued the notice under Section 80 of the CPC and yet no reply was received from the department of the defendants and therefore the plaintiff has filed the suit. He has also submitted written submissions wherein he has highlighted the facts narrated in the plaint and evidence led before the Trial Court. 16.1. It is submitted that the plaintiff was carrying on business of tobacco with a license issued by the authority and was renewed every year. He has also submitted that the stock of the plaintiffs warehouse was carried out somewhere in the month of December to January of 1979 and the same was noted in the register. He has submitted that prior to 21.02.1979 the plaintiff-respondent had went to Raipur M.P. and his son Mahendrabhai and near relative Chhaganbhai used to look after the warehouse in his absence. According to him, however both of them were not authorized persons to act for the plaintiff as per Rule 3 of the Act. He has submitted that on 21.02.1979, the offic....
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....he observations of the Trial Court regarding the damages awarded to the plaintiff. In this regard, he has also submitted that the plaintiff has placed on record the copies of the statement prepared by the officers during the checking with documentary list at exhibit 109. When his attention was drawn that those document has not been exhibited in evidence he has repeatedly stated that the Trial Court has accepted the version of the plaintiff regarding the value of the goods. He has also submitted that as observed by the Trial Court the defendant side has not objected to the calculations made by the plaintiff and the defendant has also not produced any contrary evidence in respect of valuation of the goods. Learned advocate Mr.Parekh has also submitted that in the Criminal Trial this fact was brought on record and this facts has been considered by the Trial Court Judge in his judgment, which is just and legal one. He has submitted that observations of the Trial Court Judge regarding the valuation of the goods is the base for his argument and he has heavily relied upon this observation for the amount of damages. 16.5. Learned advocate Mr.Parekh also vehemently submitted that learned....
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....thout giving the Central Government or such officer a month's previous notice in writing of the intended proceeding and of the cause thereof or after the expiration of three months from the accrual of such cause." 18.1. In this regard, learned advocate for the defendantappellant has relied upon the decision in case of Assistant Collector of Central Excise, Guntur V. Ramdev Tobacco Company reported in 1991 SCC (2) 119, wherein there was an issue raised in respect to word "other legal proceedings" were occurred under Section 40(2) prior to its amendment. While referring to the unamended provisions of Section 40(2) of the Act, the Apex Court has observed that the expressing, "other legal proceedings" under Section 40(2) as it is to prior to its amendment in 1973, is wide enough to include adjudication of penalty proceedings under the Act but the wide expression read as "ejusdem generis" that the proceedings were "suit" and "prosecution" as they have constituted genus. It was further observed therein that "suit" or "prosecution" which those judicial or legal proceedings which are allowed in a Court of law and not before any executing authority, even if a statutory one. The use o....
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....d. Hence, considering the facts and circumstances of the case, I have decided the point no.1 accordingly. 19. Point No. (ii):- Learned advocate for the original plaintiff has relied upon the decision in the case of Union of India (Uoi) and 2 Ors. (Supra). The Karnataka High Court was dealing with the Second Appeal, wherein the Suit was based on the facts that the tobacco goods were illegally seized by the officers of the department and it was confiscated. Thereafter the plaintiff was allowed to redeem the seized tobacco on the payment of redemption fine. The order of the confiscation was challenged by the plaintiff before the High Court by preferring application wherein order of confiscation came to be quashed on the ground of violation of principles of natural justice. The Excise Department thereafter ordered the release of the tobacco to the plaintiff and directing him to take delivery of the same within ten days from the date of the order. The plaintiff did not take the delivery of the goods on the ground that the seized goods were rendered unfit for use and it became unfit for sale. It was the case of the department that goods were auctioned but there was no purchaser and....
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....il Court to entertain the suit challenging the validity of the imposition of the duty of the customs is excluded. 22. Learned advocate for the plaintiff has also relied upon the decision of the Delhi High Court in case of Shantilal Mehta (Supra), this was also the case wherein premises of the petitioner was searched by the Customs Authority and certain items of ornaments and diamonds were seized. Thereafter, the order was passed releasing certain items of the seized goods. Further, certain goods were ordered to be confiscated. The order of confiscation was challenged. Considering the facts, it was observed that right to restoration of the goods is a vested Civil Right and on expiry of the initial period of six months this right to restoration of the goods vested indefeasibly and absolutely in the petitioner and it cannot be taken away. The defence raised by the department regarding the provisions of Section 123 of the Customs Act, it was held that, that Section does not apply with the facts of the case. 23. Now, it is pertinent to note that Sub-section 2 of Section 40 of the Act as referred to herein above provides that no proceedings, other than a suit, shall be commenced ag....
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....e has also stated that 1/3 goods were burnt and he has issued notice to the defendants for handing over the remaining goods to him but the defendants did not reply to it. He has also stated that in the year 1984, he has acquired the goods and during that period the entire tobacco was spoiled. He has also produced the copies of the notice as well as the receipt thereof by the defendant. 26.1. During his cross-examination, he has stated that he had no knowledge regarding the checking of his warehouse on 21.02.1979. According to him, when he went to Raipur(M.P.) prior to that date, there were 13,500 bags in stock. According to him, prior to 5 to 6 days of 21.02.1979, he went to Raipur, M.P. The actual stock in the warehouse was as per the detail mentioned in the register. He has denied that there were deficit of 3,701 bags in the stock. He has admitted that as the tobacco bags were seized by the officers of the Excise Department, however, has denied the statement that it was handed over to him in his custody for proper maintenance. He has shown his ignorance as to whether the panchnama was prepared in presence of his son Mahendrabhai. He has denied that he and his son has given sta....
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.... brigade was called and water was sprinkled there. He has also stated that thereafter, after 3 to 4 days there was further fire and fire brigade was called. He has stated that due to sprinkling of water all the tobacco was damaged. He has also stated that as there was no ventilation for air circulation, the fire has broken out. He has stated that the officers of the Excise Department made heap of the tobacco and therefore there was no air circulation. He has deposed that the Police has prepared panchnama of the fire and recorded statement of the various witnesses. 27.1.During his cross-examination, he has admitted that there is license of tobacco in his favour and his statement was recorded by the Superintendent of Excise Department on 21.02.1979 and at the time of checking he was present. He has also admitted that the officers of the Excise Department has told him that checking of the warehouse is to be done and at that time Chhaganbhai was also with him. He has admitted that stock verification was being conducted by the officers of the Excise Department and two panchas namely Bhikhabhai and Arvindbhai were present. He has submitted that after the closure of the proceedings of ....
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....e out in the godown of the plaintiff. On perusal of the facts in the panchnama at exhibit 155 it reveals that due to heat, accidental fire broke out. 30. On the perusal of deposition of witness Ratnaji Vasram Makwana at exhibit- 158, it transpires that he is a labourer and according to his version, he is engaged in arranging the goods in the warehouse in a square manner. He has also stated that they are placing bags in a manner that there is a line of 5x4 in a shape of square and around that bags, open place is being kept. He has stated that in one square they are not arranging more than 500 bags. He has also stated that open lands are being kept on all the four corners for the purpose of air circulation. He has also stated that from that open land, it is easy to calculate the bags. He has also stated that the boards are being affixed on wall in godown showing the details of tobacco, which includes the brand of tobacco, name of the village, number of bags, weight of the bags, etc. He has stated that from this board, as these facts could be known. He has stated that there are more than 25 godowns in the vicinity and Excise Inspectors are visiting them. According to him, on the date ....
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....e bags, fire broke out and he has received compensation from the insurance company. Further he has also admitted that whatever goods arrived at their warehouse, are being kept in square shape and within a week they have to inform officer of the Excise Department and officers of the Excise Department can check it. He has submitted that at the time of checking, the Inspector used to take out 2 to 5 bags from the same and thereafter it is being kept as it is. 32. Witness Muljibhai Kachrabhai Mangora at exhibit 161 has stated that at the relevant time he was working as labourer with the plaintiff Somabhai and he used to keep heap of 10 as well as 20 bags and height of that heaps would be 10 feet. He has also stated that on that heaps of bags they used to attach papers and they were keeping the bags in such a manner that there would be proper space for air circulation. He has submitted that there were four workers in the warehouse of the plaintiff and usually they were keeping 10 to 12 bags. He has also stated that initially there was a checking in the warehouse of the plaintiff and thereafter Somabhai left for Raipur M.P. He has stated that when the plaintiff went out of city for 5 ....
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.... was prepared, at that time of checking, Somabhai was not present. He has also stated that registers were checked and signatures of panchas were obtained. 33.1. During his extensive cross-examination, it was tried to be shown that the panchnama was not prepared in presence of the panchas and the entire checking was not proper one. But, nothing helpful to the plaintiff comes out from his evidence. Of course, he had admitted that during the checking they have weighted randomly 10% of the bags and on that basis they have prepared the shortage of the stock. He has denied the suggestion that the panchnama was not prepared in presence of the panchas and there was no any shortage of 3,701 bags as alleged. He has admitted that his deposition was recorded in the Criminal Case no.1766 of 1982. He has admitted that if there is detection of huge evasion of excise duty, then, they will get price. He had admitted that the labourers were bringing bags from the lot and on the basis of the information made on the bags, regarding the lot number and weight, the officers were verifying it and after verifying the number of bags was weighted on the scale. 33.2. Thus, from his evidence it is brough....
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....ted the case of the defendants regarding the checking of the warehouse of the plaintiff and preparation of the panchnama as well as having shortage of 3,701 bags on the stocks. He has stated that during the checking, the plaintiff was not present, but his son was present through out. He has stated that he has not signed the panchnama nor he has read it. He has admitted that the entire warehouse was full of bags and bags were weighted in the plaintiffs warehouse. He has denied the suggestion that they have prepared the paper panchnama and they have filed false case for getting promotion. He has also denied the suggestion that they have not acted bonafidely. He has admitted that before filing of the suit, notice was issued to the department. He has admitted that in every year there was a stock checking in the warehouse. He has shown his ignorance as to whether there was a fire in the warehouse. He has also stated that he cannot say as to whether due to sprinkling of the water, the entire tobacco was destroyed. He has admitted that the suit has been filed for the recovery of the tobacco bags and has admitted that his deposition has been recorded in the Criminal Case. The copy of the s....
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....hat even from the evidence of the plaintiff, there is no evidence regarding the actual loss of damages. 38. Further, it reveals from the evidence that the tobacco was lying in the warehouse of the plaintiff. As per the entire oral evidence of the plaintiff witnesses, all the bags of tobacco were kept in the same warehouse. Further it reveals that as per the oral evidence of the plaintiff side, fire was broken out as there was no proper ventilation available and due to heat, fire broke out. Since the tobacco was lying in the warehouse of the plaintiff, it was for the plaintiff to see to it that there is proper ventilation available in it and no untoward incident of fire took place. The entire case of the plaintiff is based upon the allegations that due to negligence on the part of officers of the Excise Department, not permitting him to sold out tobacco, he has suffered damages due to fire occurred in his warehouse. But the version of the plaintiff cannot be said to be established in absence of proper evidence to suggest that due to negligence on the part of the officers of the defendants, fire broke out and that they have instructed him to keep the bags in such a manner that no ....
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....d advocate Mr.Parekh for the appellant regarding the documents produced in the Criminal Case is accepted for the sake of argument, then also it reveals from those material which is at exhibit 150, 151 and 152. It reveals that these are the stock declaration and copy of panchnama wherein only weight has been shown regarding the various quantity and quality of the tobacco. There is no any iota of material regarding the price of that goods. At this juncture, it is pertinent to note that, at one stage, the plaintiff submits that there was no panchnama prepared by the officers at the place of checking and at the same time, he is relying upon the material which has been part of that panchnama, which has been filed before the Criminal Court to substantiate his claim of damages. Thus, the plaintiff is blowing hot and cold at a time. Further, the stock declaration and particulars regarding various quantity and quality of the tobacco that was found on 21.02.1979 at the time of checking, was very well in the warehouse on the date of fire is a question. There is no evidence led by the plaintiff that on the date of fire, what was the actual stock in his warehouse, there is a time gap of almost ....