Om Milling and Dyeing Works vs Superintendent of Central Excise

I.S. Tiwana, J.—The petitioner concern seeks to impugn notices Annexures P.4, P.6, P.7, P.8 and P.10 for the recovery of Rs. 19,466.38 on account of the differential duty on the baby blankets cleared by it at the tariff value of Rs. 25/- per Kg. It pleads the following facts :

The petitioner concern finishes two types of blankets - (1) 2 metre x11/4 metre in length (approximately) and (ii) of the dimension of 54"x54" and 60"x60". According to it, the latter type of blankets are known as ''baby blankets''. Further since the petitioner had opted for ''self-removal procedure'' as mentioned in Chapter 7-A of the Central Excise Rules, 1944 (for short, the Rules), it removed some baby blankets during the period February 1977 to May 1977 by debiting excise duty at the tariff value of Rs. 25/- per kg. This, according to it, was done in the light of notification No. 4/77-G.E. dated January 17, 1977 (Annexure P.1) issued by the Government of India, laying down the tariff value of the blankets the relevant part of which reads as follows :

"In exercise of powers conferred by Sub-sections (2) and (3) of Section 3 of the Central Excise and Salt Act, 1944 (1 of 1944) ... fixes for processed woollen fabrics, falling under item No. 21 of the First Schedule....

TABLE ----------------------------------------------------------------------------- Serial No. Description Tariff Values ----------------------------------------------------------------------------- (1) (2) (3) ----------------------------------------------------------------------------- 1. XXX XXX XXX XXX 8. Fabrics containing not less than 90 per cent of shoddy yarn (a) Blankets (i) Weighing 1.44 Kg. or less 25.00 (ii) Weighing more than 1.44 kg. 42.00 (b) Others (i) Fabrics commonly known as melten cloth 30.00 (ii) All others 51.00 -----------------------------------------------------------------------------

Explanation : For the purposes of this notification....

(4) ''woollen fabrics'' means woollen fabrics of every description except tufted woollen fabrics."

When the petitioner submitted its monthly returns for the period in question in Form R.T. 12 as prescribed under Rule 173-G(3) of the Rules, the competent authority came to the conclusion that what had actually been cleared by the petitioner during the above noted period from its premises were not baby blankets but woollen fabrics and subjected these to duty at the tariff value of Rs. 51/- per Kg. All these orders undisputably were passed in the presence of the petitioner or its representative. Since the petitioner failed to pay the duty in terms of these orders the impugned notices or their reminders were issued to the petitioner for paying the amount of duty in question within the stipulated period. The petitioner impugns these notices/reminders on two grounds - firstly, prior to the issuance of these notices/reminders no notice as envisaged by Rule 10 of the Rule was issued to it and in the absence of the same the present notices stand vitiated and secondly, the petitioner has been discriminated in not accepting the goods cleared by it as ''baby blankets'' vis-a-vis the similar goods manufactured and cleared by another concern known as ''M/s. Raj Dyeing and Mills Works, Sultanwind Road, Amritsar''. The order of the Appellate Collector dated June 20, 1981, subjecting the shoddy baby blankets cleared by that concern to duty at the tariff rate of Rs. 25/-per kg. is placed on the records of this case as Annexure P.12.

As against this the case of the respondent authorities is that firstly, Rule 10 as it stood at the relevant time (it has been substituted with effect from August 6, 1977) was not attracted to the facts of this case and secondly, there is no question of discrimination against the petitioner vis-a-vis M/s. Raj Dyeing and Mills Works as in the case of the petitioner the competent authority at the time of the finalisation of its returns in Form R.T. 12 had specifically come to the conclusion that what had been cleared by the petitioner were woollen fabrics and not baby blankets. Otherwise also it is maintained on behalf of the respondent that no argument of discrimination can be founded on two judicial or quasi-judicial decisions passed qua two different parties. Having given my thoughtful consideration to the entire matter I find no merit in the stand taken by the petitioner.

So far as the first contention of Mr. Seth, learned Senior Advocate for the petitioner that prior to the issuance of the impugned notices/ reminders the respondent authorities were under an obligation to issue a notice in terms of Rule 10 of the Rules is concerned, I find that Rule 10 as it stood at the relevant time did not envisage any such notice. The relevant part of Rule 10, as then was, reads as follows :

"When duties or charges have been short-levied through...or through mis-statement as to the quantity, description or value of such goods on the part of the owner...on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners account-current, if any, or from the date of making the refund."

The argument of Mr. Sath is that since the petitioner had described the goods cleared by it as ''baby blankets'' which according to the departmental authorities was a mis-description and had short-levied the duty thereupon, the provisions of this Rule were clearly attracted to the facts of the case in hand. To my mind, the learned counsel is misconstruing the language of the Rule the relevant part of which has already been reproduced above. It is only when as a result of the mis-description of the goods by an owner the authorities under the Act levy a lessor duty and they later want to revise the same that they are obliged to issue a notice as envisaged by this Rule within a period of three months and not otherwise. It is not the case of the respondent authorities that they at any stage levied duty on the petitioner at a lower rate. Though the petitioner had tried to mis-describe the goods cleared by it yet the authorities while finalising the returns submitted by it had treated the goods cleared by it not as ''baby blankets'' but as woollen fabrics. It is the conceded position that the petitioner never challenged this conclusion of the authorities recorded on the returns in Form R.T. 12. In the face of these facts it cannot now plausibly be urged by the petitioner that the respondent authorities had at any stage levied the duty on a lower or losser rate. The orders on Form R.T. 12 having been passed in the presence of the petitioner, no further notice, to my mind, for the recovery of the amount of duty was required to be issued to the petitioner by these authorities. Thus I repel the first contention of the learned counsel for the petitioner.

So far as the second contention of the petitioner as noticed above is concerned, the same is equally meritless. In the order Annexure P.12 passed in the case of Raj Dyeing and Mills Works, the Appellate Collector was, of the opinion that the material which had been cleared by the said concern were shoddy baby blankets arid not woollen fabrics as in the case in hand. In the face of these basic facts being different in the two cases the petitioner cannot possibly urge any discrimination in the matter of charge of excise duty.

For the reasons recorded above this petition fails and is dismissed with costs, which I determine at Rs. 500/-.