Jeevan Reddy J.
1. Plaintiff is the appellant. His suit is for a declaration that the levy of excise duty in a sum ofRs. 15,543/- is illegal, and void and for a consequential injunction to restrain the defendant from collecting the paid amount.
2. The plaintiff is a producer of tobacco which is one of excisable goods under the Central Excise and Salt Act, 1944. The said tobacco was stored in a non-duty paid warehouse. He sold the tobacco to one Messrs. Polisetti Venkateswarju and Company of Guntur. The plaintiff applied for transport permits to the officer-in-charge of his warehouse. After obtaining a bond from him, permits were issued. The goods were then transported to Guntur. Part of the goods were accounted for i.e. rewarehoused at Guntur, but a major portion thereof was not so accounted for and not rewarehoused. It appears that the said purchaser sold the said tobacco to a third party without warehousing the same at Guntur. Proceedings in that behalf were taken first against the consignee which were later dropped proceedings were then taken against the consignor, namely the plaintiff. The plaintiff was held liable for the payment of duty in respect of such non-rcware- housed tobacco and the appropriate duty was demanded from him. The plaintiff filed appeals and revision provided by the Act against the said demand, but to no avail. Thereafter, he instituted the present suit.
3. According to Rule 9 of the Central Excise Rules, no excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto whether for consumption, export or manufacture of any other commodity, in or outside such place, until the excise duty leviable thereon has been paid. According to the first proviso to Rule 9 such goods may be deposited without payment of duty in a storeroom approved by the Collector or in a warehouse appointed or licensed under Rule 140. Chapter IV deals with unmanufactured products (tobacco is an unmanufactured product) Rule 19 provides :
'Duty shall become chargeable as soon as the products have been cured and are in a fit state for sale or where manufacture proceeds sale, for manufacture and the curer shall be liable for the payment thereof and shall remain so liable until the liability is to the knowledge and satisfaction of the proper officer, transferred as provided in Rule 29 to another person duly licensed to carry on business in such products '
Rule 24 provides the manner in which unmanufactured goods may be disposed of immediately after they have been cured. Rule 29 says that when the curer sells unmanufactured products, without payment of duty as providedin Rule 24, the purchaser of the products and the person in whose possession the products after purchase are shall become liable for duty and the curer shall not be absolved from the liability laid upon by him by Rule 19 until the transfer of ownership is reported to and acknowledged for the purpose. Rules 152 to 156-B provide the procedure for removal of goods from one warehouse to another. According to Rule 153 when warehoused goods are to be removed from one warehouse to another, the consignee or consignor of the goods, shall before the goods are removed, enter into a bond in the proper form with sufficient security and subject to such conditions as the collector approves, in a sum equal to the duty chargeable on such goods and for the due arrival and rewarehousing thereof at the warehouse of destination within the prescribed time. (In this case the application for transport was made by the consignor that is the plaintiff, and it was he who executed the bond in a proper form undertaking the due arrival and rewarehousing thereof at the warehouse of destination). Sub-rule (3) of Rule 153 says that such bond shall not be discharged until such goods are produced before the officer at the warehouse of destination and are duly rewarehoused or are otherwise accounted for to the satisfaction of the appropriate officer. Sub-rule (4) makes it clear that in cases where bond has been furnished by the consignor, he shall be discharged' only if and when he produces the rewarehousing certificare from the officer incharge of warehouse of destination [as contemplated by Rule 156-A (3)], before the officer incharge of the warehouse of removal. Now Rule 156-A says that the officer incharge of the warehouse of removal shall take account of the goods to be transported and after completing the removal certificate on all the copies of the application, which has to be submitted in triplicate, retain one copy with himself, send the duplicate to the officer incharge of the warehouse of destination and hand over the trip'icate to the consignor for despatch to the consignee. Sub-rule (3) then says that on arrival of the goods at the warehouse of destination, the consignee shall present them together with the triplicate application and the transport permit to the officer incharge of such warehouse, who shall after taking account of the goods, complete the rewarehousing certificate on the duplicate as well as triplicate and return the duplicate to the officer incharge of the warehouse of removal and the triplicate to the consignee for despatch to the consignor. Sub-rule (4) then says that the consignor shall present the triplicate application duly endorsed with such certificate to the officer incharge of the warehouse of removal within ninety days. Rule 156-B provides the consequence for noncompliance with Sub-rule (4) aforesaid. Under this not only the appropriate duty can be levied but also penalty to the specified extent.
4. A reading of the above Rules makes it clear that where the consignor applies for transport permit, he has to execute a bond undertaking several things mentioned in Rule 153(1) and he shall be discharged only when he producs the rewarehousing certificate as contemplated by Rule 156-3(A) before the offcar incharge of the warehouse of removal. The duty of the consignor in such a case docs not come to an end with the delivery of the goods to the consignee. Since the commodity has not been duty-paid, his duty extends to the rewarehousing of the goods in another non-duty paid warehouse. In this case, admittedly, the consignor applied for transport, executed the bond, obtained permits and allowed the removal of the goods from his warehouse. It is also admitted that the consignor that is the plaintiff-herein, failed to produce the rewarehousing certificate either within the time prescribed by Rule 156-A (4) or at any time. It is also admitted that the goods in question were not rewarehoused but were disposed of before such warehousing. In such circumstances, the consignor has been rightly made liable under Rule 156-A (3) read with 156-B and Rule 153 In the above circumstances, I do not see any error in the levy of excise duty on the plaintiff and the suit has rightly been dismissed by the Court below. The appeal accordingly fails and is dismissed, but in the circumstances of the case, there shall be' no order as to costs in this appeal.