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Assistant Collector of Central Excise Vs. National Tobacco Co. of India Ltd. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 7 of 1965
Judge
Reported inAIR1967Cal269,71CWN1
ActsCentral Excise Rules, 1944 - Rules 9, 10, 10A and 10B
AppellantAssistant Collector of Central Excise
RespondentNational Tobacco Co. of India Ltd.
DispositionAppeal dismissed
Excerpt:
- sinha, c. j. 1. the facts in this case are briefly as follows. the respondent company carries on the business of manufacturing cigarettes and tobacco at agarpara in 24 parganas and as such, they have to pay excise duty on the value of the cigarettes manufactured by it. in this case, we are not concerned with anything else. the levy of excise duty is controlled by me central excises and salt act (act i of 1944) (hereinafter referred to as the 'said act') and the central excise rules (hereinafter referred to as the 'said rules'). section 3 of the said act provides that there shall be levied and collected in such manner as may be prescribed, duties of excise on all excisable goods other than salt, which are produced and manufactured in (india), and a duty on salt manufactured in, and.....
Judgment:

Sinha, C. J.

1. The facts in this case are briefly as follows. The respondent company carries on the business of manufacturing cigarettes and tobacco at Agarpara in 24 Parganas and as such, they have to pay excise duty on the value of the cigarettes manufactured by it. In this case, we are not concerned with anything else. The levy of excise duty is controlled by me Central Excises and Salt Act (Act I of 1944) (hereinafter referred to as the 'said Act') and the Central Excise Rules (hereinafter referred to as the 'said Rules'). Section 3 of the said Act provides that there shall be levied and collected in such manner as may be prescribed, duties of excise on all excisable goods other than salt, which are produced and manufactured in (India), and a duty on salt manufactured in, and imported by land into any part of India as, and at the rates, set forth in the First Schedule. It is not necessary to go into further details at present. It is sufficient to state that cigarettes manufactured in India have to pay excise duty. During the relevant period, namely the years 1955 to 1957, excise duty was to be levied on a slab system upon value of the goods manufactured. It was, therefore, a battle of wits between the manufacturer and the Central Excise Authorities. The former wanted to keep within the lower slabs whereas it was to the interest of the latter to calculate the excise duty under the higher ilabs. For the calculation of the duty payable, the value of the goods was all-important, as the calculation of the excise duty depended upon the price, that is to say the value of the cigarettes manufactured. Section 4 of the said Act provides how the value was to be determined for purposes of duty. Section 37 of the said Act confers power upon the Central Government to make rules, inter alia providing for the assessment and collection of excise duty, particularly the authorities by whom functions under the said Act were to be discharged, the issue of notices requiring payment, the manner in which the duty shall be payable and the recovery of duty not paid. Such Rules have been promulgated, and the said Rules will govern the determination of this case, as we are concerned with the realization of duty on excisable goods. Under the said Rules, [2(v)] 'duty' means the duty payable under Section 3 of the said Act. Rule 7 provides that every person who produces or manufactures any excisable goods shall pay the duty leviable on such goods, at such time and place and to such person as may be designated in, or under the authority of, the said Rules. Rule 9 is important and the relevant part thereof is set out below:

'9. Time and manner of payment of duty.--(1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export, or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require, and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form: ... ... ...... ... ...Provided further that the Collector may, if he thinks fit instead of requiring payment of duty in respect of each separate consignment of goods removed from the place or premises specified in this behalf, or from a store-room or warehouse duly approved, appointed or licensed by him keep with any person dealing in such goods an account-current of the duties payable thereon and such account shall be settled at intervals not exceeding one month, and the the account-holder shall periodically make deposit therein sufficient in the opinion of the Collector to cover the duty due on the goods intended to be removed from the place of production curing, manufacture or storage.'

The proviso set out above is referred to hereinafter as the 'second Proviso' of Rule 9.

2. We now come to Rule 52 which lays down the procedure for clearing goods on payment of duty. That Rule is as follows:

'52. Clearance on payment of duty. When the manufacturer desires to remove goods on payment of duty, either from the place or premises specified under Rule 9 or from a storeroom or other place of storage approved by the Collector under Rule 47, he shall make application in triplicate (unless otherwise by rule or order required) to the proper office in the proper form and shall deliver it to the officer at least twelve hours (or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow) before it is intended to remove the goods. The officer shall, thereupon, assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury, or paid to the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been despatched to the Treasury by money order shall allow the goods to be cleared.'

The application referred to in said Rule is made in the prescribed form, being Form A. R. 1 (Central Excise Series No. 57) set out at pp. 442 to 448 of the Central Excise Manual, 8th Edition. In the present case, it is this form which was used in all the transactions. It is, therefore, evident that the normal procedure is that the goods are removed upon payment of the duty assessed. The Rules provide for such assessment as well as for a 'provisional assessment.' At the relevant time, provisional assessment of duty was governed by Rule 10-B, the relevant terms whereof were as follows :--

'10-B. Provisional Assessment of Duty :--

(1) Notwithstanding anything contained in theserules-

(a) Where the owner of any excisable goods makes and subscribes a declaration before the proper officer to the effect that he is unable for want of lull Information to state precisely the real value or description or such goods in the proper Form; or

(b) Where the owner of any goods has furnished full information in regard to the real value or description of the goods but the proper Officer requires further proof in respect thereof; or

(c) where the proper Officer deems it expedient to subject any excisable goods to any chemical or other test, the proper Officer may direct that the duty leviable on such goods may, pending the production of such information or proof or pending the completion of any such test, be assessed provisionally.

(2) When the owner of any goods in respect of which the duty has been assessed provisionally under Sub-rule (1) has paid such duty, the proper Officer may make an order allowing the goods to be cleared for home consumption or for exportation, as the case may be and such order shall be sufficient authority for the removal of the goods by the owner :

Provided that before making any such order the proper officer shall require the owner to furnish a bond in the proper form binding the owner to pay the differential duty when the final assessment is made. 3. When the duty leviable on such goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of, or is in excess of, the duly finally assessed, the owner of the goods shall pay the deficiency or be entitled to refund, as the case may be.'

3. We now come to the provision for the recovery of duties which have been short-levied. Rules 10 and 10-A are the relevant Rules, which I set out below. It will appear later on that it is Rule 10 which is applicable to the facts of this case.

'10. Recovery of duties or charges short-levied or erroneously refunded :--When duties or charges have been short-levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through misstatement as to me quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be, 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.

10-A. Residuary powers for recovery of sums due to Government:--Where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short-levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.'

4. I now come to the facts as they have taken place in the present case. Before I proceed further, I might mention here that the excise duty that was payable during the relevant period was as shown in the Tariff Item 9(II)(2) of the First Schedule to the Act as revised under the 'Additional Duties of Excise (Goods of Special Importance) Act, 1957.' It is not, however, disputed that the above provisions of the said Rules apply. In the present case, the respondents in their factories at Agarpara are manufacturers of cigarettes upon a large scale. The excise authorities found it convenient to follow the following practice: Every quarter, namely in January, April, July and October, the company sent to the excise authorities a price list of all brands of cigarettes manufactured by them. Upon receipt of the list, the excise authorities gave it a provisional approval. It is alleged that later on they verified the price list from the market and give a final approval. Each time, the respondents applied in form A. R. I for clearance of cigarettes. These forms were issued in triplicate and one of such forms actually used has been produced before us and marked as Ext. 2 in this appeal. It shows that the form is headed 'Application for removal of excisable goods on demand duty (in triplicate) (Rules 9 and 93)'. The application contains particulars of the number of packages, the quantity of goods on which duty is assessed, the rate of duty (basic and additional) and the total duty payable. Ext. 2 shows that the respondents were proceeding under the second proviso to Rule 9 which has been set out above and under which the respondents had an account-current with the appellant, which account was settled each month, as appears from the 'personal ledger account' of the respondents with the appellants which has been produced and marked as Ext. 'E' in this appeal. Ext. 2 shows the position of the account-current, an extract of which is set out therein. No A. R. I forms submitted by the respondents have been produced, although an opportunity to do so was given by us, which shows that the assessment made thereon was a provisional assessment. As far as it appears from the materials placed before us, the practice followed was as follows : The respondents issued a quarterly price list. They had an account-current with the excise authorities. Price list as originally prepared, had nine columns, one of them bearing the heading, 'distributors selling price'. The excise authorities used to accept the prices contained in the list for the time being, and charged excise duty on the same. Later on, they verified the price from the market and if there was any difference, it was presumably adjusted in the account-current. Upto the quarter beginning July, 1957 there was no trouble; but at or about that time, the form in which the price list was issued was changed and the column 'distributors' selling price disappeared from the list. The excise authorities considered this as being deliberately planned, in order to avoid the payment of the proper excise duty, and on November 5, 1958 the Deputy Superintendent of Central Excise wrote to the respondents as follows :--

'It has been decided that henceforth all assessment of cigarettes should be made on the basis of the wholesale case selling price at which stockists or agents are selling the same to an independent buyer in an open market. The assessable value should be worked out by deducting general trade discount if any, declared, and Central Excise Duties chargeable and other local taxes.

Accordingly, yon are requested to furnish such price lists immediately for determining correct assessable value.

An early action to this effect may please be taken thereby enabling me to implement the aforesaid instructions for assessments with an immediate effect.'

On November 7, 1958 the excise authorities served a notice on the respondents under Rule 10 of the said Rules, demanding payment of a sum of Rs. 1,67,072.40 as basic duty and Rupees 76,574.85 as additional Central Excise Duty which was stated to have been short-levied on 'No. 10' brand cigarettes cleared from the factory during the period 10th August 1958 to 5th November 1958. It was stated mat the short-levy was established after final verification of prices from the local wholesale market. On November, 12, 1958 a further notice was issued purporting to be under Rule 10-A of the said Rules demanding payment of Rs. 6,16,487.49 as Central Excise duty and Rs. 2,10,492.15 as additional Central Excise duty being the amount stated to have been short-levied on 'No. 10' brand cigarettes cleared from the factory between October 1957 to August 9, 1958. Lastly, on November 13, 1958 the respondents were served with a notice purporting to be under Rule 10-A of the said Rules, demanding payment of Rs. 40,726.48 as Central Excise duty and Rs. 16,958.50 as additional Central Excise duty short-levied on other brands of cigarettes as follows:--

'(i) De Luxe Tenor (Magnum) from January 1, 1958 to January 28, 1958 (ii) Maypole from January 1, 1958 to February 5, 1958 (iii) Carlton Gold seal from January 1, 1958 to February 7, 1958 (iv) John Peel from January I, 1958 to January 31, 1958 (v) Light House from January 1, 1958 to January 16, 1958 (vi) Gold Link from January 1, 1958 to January 26, 1958.'

Against all these demands, the respondents objected, on the grounds firstly that the method of calculation was wrong in law and violative of the provisions of Section 4 of the said Act and secondly that Rule 10-A had no application to the facts of the case, and that the proper Rule applicable was Rule 10 under which the notices were barred by limitation. The third point taken was that the assessment made had been reopened without notice to the respondents and without giving them an opportunity of making any representation and as such there was a violation of the rules of natural justice. On these grounds, an application was made before the Writ Court under Article 226 of the Constitution, and it was I who issued the Rule and heard the application. On February 5, 1955 (sic) the Rule was made absolute by me. I held that the value as determined was not in accordance with the said Act and the Rules. I laid down the proper method of valuing the goods and the assessments made were set aside and the appellants were restrained from proceeding on the basis of the said notices, unless proper assessments were made in accordance with law. The point of limitation was, however, expressly left open.

5. Thereafter, what happened was that on April 24, 1960 the appellants addressed the following letter to the respondents :--

'In connection with the assessment of Central Excise duties for the period:--

I. from 1st October, 1957 to 5th November 1958 in respect of 316885,000 of 'No. ten' brand cigarettes,

II. from 1st January 1958 to 28th January 1958 in respect of 6,600,000 of 'D. L. T. Mag' Cigarettes.

III. from 1st January 1958 to 5th February 1958 in respect of 95,94,000 of 'May Pole Cigarettes.

IV. from 1st January 1958 to 7th February 1958 in respect of 3143,500 of 'Carltons Gold Seal' Cigarettes.

V. from 1st January 1958 to 31st January, 1958 in respect of 1471,250 of 'Jhon Peel' Cigarettes.

VI. from 1st January 1958 to 16th January 1958 in respect of 8200,000 of 'Light House' Cigarettes.

and

VII. from 1st January 1958 to 16th January 1958 in respect of 9070,000 of 'Gold Link' Cigarettes.

Please note that a total sum of Rupees 10,05,133.25 (Rupees ten lacs five thousand one hundred thirty three and twenty-five naya paise only) as basic Central Excise duty and a total sum of Rs. 3,43,208.25 nP (Rupees three lad forty-three thousand two hundred eight and twenty-five naya paise only) as additional duty had been provisionally debited is your account on the basis of the price lists supplied to us by you for the quarters.

(i) beginning October. 1957 dated 17A October, 1957.

(ii) beginning January, 1958 dated ail.

(iii) beginning April, 1958 dated 14th April, 1958.

(iv) beginning July, 1958 dated 14th July, 1958, and

(v) beginning October, 1958 dated nil.

(2) We now propose to complete the assessments for the said periods from the evidence in our possession from which it appears

(i) that there is no wholesale market for the goods covered by your price lists in or near the factory or the place of manufacture and that the nearest wholesale market for the same is the Calcutta Market.

(ii) the wholesale cash price of the article in question at the time of sale and/or removal of the goods at the Calcutta market at which goods of like kind or quality are sold or are capable of being sold have been ascertained by us and the evidence at our disposal reveals that the prices quoted by you in your price lists are not correct.

3. The prices are as per chart annexed hereto which has been prepared on the basis of available evidence in terms of Section 4(a) of the Central Excises and Salt Act, 1944. The vouchers mentioned in the chart are available for your inspection at anytime next week during office hours. After obtaining inspection of the vouchers please attend at our office at 5, Clive Row, Calcutta on 2nd May, 1960 at 10-30 A. M. for the purpose of discussing the points mentioned above.

4. We are prepared to give you a personal hearing with regard to all the points indicated above. If you have any evidence in support of your contention you are at liberty to produce the same at the time of hearing. Thereafter, please note that we propose to make the final assessment in accordance with law.'

6. Certain typographical errors were corrected by a further notice dated May 4, 1960. The respondents objected to the said notice and made another application on 14th June. 1960 on which date a Rule was issued calling upon the respondents to show cause why appropriate writ or writs should not be issued directing the appellants to withdraw, cancel or forbear from giving effect to the notices dated 24th April, 1960 and 4th May, 1960 and not to proceed to assess the respondents for the periods mentioned in the sain two notices and for other reliefs. It is this Rule which came up for hearing before Banerjee, J. who by his judgment and order dated January 3, 1964 made the Rule absolute and issued a writ of prohibition directing the appellant not to proceed on the basis of the impugned notices and a writ of mandamus was issued, directing them to cancel the said notices. It is against this judgment and order that the appeal is directed. The way that the case has been presented to us by Mr. Roy Choudhury is slightly different from the case presented by the learned standing Counsel in the court below. The way that the case was presented before us by Mr. Roy Choudhury is as follows :

(1) The first argument is that, until the valuation was properly made, there can be said to be no 'assessement' and consequently there can be no question of 'short-levy'.

(2) Alternatively, that the assessments made on returns in the A. R. I forms were 'provisional assessments' made under Rule 10-B and consequently, until the final assessments were made, there can be no question of 'short-levy'.

(3) That the impugned notices were not barred by limitation because of grounds (1) and (2) mentioned above. At the hearing of the appeal, a point was sought to be agitated, namely that the case does not fall either under Rule 10 or 10-B, but that it should fall under Rule 10-A. Nowhere was this case made either in the court below or in the grounds of appeal, although the appellants had an opportunity of amending their memorandum of appeal. Consequently the appellants were not allowed to urge this point. We must proceed upon the footing that Rule 10 applies. If Rule 10 applies, Rule 10-A is automatically excluded because it is only a residuary provision.

7. In order to decide the points raised, it is of the utmost importance that we consider aide by side the law which must be followed and the practice which was in fact followed in this case. It is quite possible, that the Excise authorities, in an attempt to help the appellants by facilitating the movements of goods, inadvertently allowed the claims to be barred by limitation. That, however, is not a matter which can affect the question of limitation. The bar of limitation has been imposed by statute. The morality of the case or the conduct of the parties is therefore irrelevant unless the law provides that the court on that ground can afford relief. In the present case, no provision has been shown to us to entitle the court to do so. The real point in this case is as to whether in the facts and circumstances of the case, an attempt on behalf of the appellants to reopen the assessment or to realize amounts said to be short-levied from the respondents should be allowed to proceed if they are barred by limitation under the provisions of Rule 10 of the said Rules. It is not disputed that if the bar of limitation applied, there was no point in going on with the assessment proceedings.

8. In my opinion, the position may be summarised as follows: Under the said Act and the Rules, cigarettes are exciseable goods. Under the law, no exciseable goods can be removed from the place where they are produced or manufactured without complying with the formalities laid down by the law. Under Rule 9 read with Rule 52, when the manufacturer wishes to remove the goods from the factory premises, as they have done in this case, they have to make an application, which in the present case, was in the A. R. I form and in this form all the particulars have to be set out, namely the quantity of goods, the value thereof, the tariff rate etc. Upon receipt of this A. R. I form the excise authorities can do one of three things. Firstly, there may be a complete assessment followed by payment by the manufacturer of the entire sum due before removal, alternatively there can be a provisional assessment under Rule 10-B (now 9-B which was not in existence at the relevant time). 'This provisional assessment' under R. 10-B must be in terms of the Rule and not in a general sense, because there is a specific provision for it. Since, in this case, the case on behalf of the appellant is, that there has been a provisional assessment, I will have to examine the point more closely later on. The second alternative is under the second proviso to Rule 9. Where numerous consignments of goods from the same place are sent out, this is a procedure which avoids the payment of duty in respect of each separate consignment. In such a case, the manufacturer opens an account current in which he periodically makes deposits, which in the opinion of the Collector would be sufficient to cover the duty due on the goods intended to be removed from the place of production or manufacture. We have before us the ledger account, Ext. E, from which it is found that the modus operandi was as follows: An amount is deposited and then goods are cleared from time to time and the account is settled every month and shows either a credit or debit. To give an illustration, in the month of May, 1958 we find that the total amount of deposit was shown as Rs. 12,00,000 and the amount debited was Rs. 9,62,062.22 nP. leaving a credit balance of Rs. 3,07,232.75 nP. Just before the final amount is entered, there is an amount of Rs. 282.06 nP. against which there is an endorsement which is significant--'This amount was debited in excess in 12/57 account and adjusted in 3/58 final account. Now adjusted by credit.' The words 'Final Account' are significant.

9. In my opinion there is nothing in the second proviso to Rule 9 to suggest that where there is an account-current, which is settled periodically, the whole thing is a provisional assessment under Rule 10-B and that there is no scope for the application of Rule 10. On the other hand, Rule 10 specifically states as follows;

'...... shall pay the deficiency or pay the amount paid to him in excess, as the case may be, on written demand by the appropriate officer being made within three months from the date on which the duty or charge was paid or (adjusted in the owner's account-current). (The underlining is mine). Where, therefore, goods are removed on the strength pf an account-current under the second proviso to Rule 9, the limitation runs from the date of adjustment and the second proviso to Rule 9 expressly states that the account--'shall be settled at intervals not exceeding one month'. In fact, in the present case, the account was adjusted every month as is found from the ledger account, Ext. E, Ext. 2 and also abstract of account Ext. 1.

10. I shall now proceed to examine the case made on behalf of the appellant. Firstly it is a case of 'no assessment', and no levy, until the value was determined finally and the alternative case is that there was a provisonal assessment and until the final assessment was made, there can be no question of limitation running. In the present case, it appears that the procedure adopted was that the respondents issued a price list quarterly. In that price list, they gave their own estimate as to the value of the goods. For the time being, the excise authorities accepted the value so given, and gave a provisional certificate to that effect, intending to check the market value and then finally determine the value later on. The procedure for issuing price list, of approving the same provisionally and accepting payment therefor according to the estimate of the manufacturer, is a procedure which is not to be found either in the Act or the Rules. Under Rule 52, normally an assessment has to be made and payment made before goods are allowed to be removed. As I have stated above, there are alternative procedures laid down in the Rules which may be availed of. In fact, an alternative procedure was availed of, namely the opening of an account-current and adjusting the same periodically. There is nothing in the ledger account Ext. E to show that the 'account-current' was not in terms of the second proviso to Rule 9 or that the adjustment or settlement made monthly were not adjustment or settlement in terms of the said proviso.

11. I now come to the question of 'provisional assessment'. There was an express provision in the Rules at the relevant time for making 'provisional assessment' of duty namely Rule 10-B. Since that was so, a provisional assessment had to be done in terms thereof. The provisions of the Rule 10-B have been set out above. The circumstances under which a provisional assessment can be made are categorised under three headings (a), (b) and (c). The headings (a) and (c) cannot possibly apply to the facts of the case. If the Excise authorities thought that the matter came under heading (b) then it is provided that the 'proper officer may direct that the duty leviable on the goods may, pending the production of such information or proof, be assessed provisionally. In such a case, there is a provisional assessment, the manufacturer pays the duty calculated on the provisional assessment and removes the goods. It has however been laid down that before making any such order, the proper officer--shall require the owner to furnish a bond binding the owner to pay the differential duty when the final assessment is made'. On the materials before us, we agree with the learned Judge in the court below, that it has not been proved that the excise authorities made a 'provisional assessment' under Rule 10-B at any stage. The provisional acceptance of the value declared by the manufacturer cannot be called 'provisional assessment'. The proper officer nowhere called upon the manufacturer to produce further proof, nor did the manufacturers want to adduce any further materials. The authorities themselves intended to gather evidence of the market value and it has been the complaint of the manufacturers that they did so behind their back, a ground on which their first application was successful. There is no direction by the 'proper officer' or any one that a provisional assessment should be made and payment received thereon and no bond was, asked to be furnished, nor was it in fact furnished. Mr. Roy Choudhury contended that the execution of a bond was for the benefit of the excise authorities and could be waived by them. Whether they could do 10 or not, in view of the mandatory language of Sub-rule (2) of Rule 10-B, it is in any event relevant to consider that there was no demand of any such execution of a bond, which shows that there was never any intention of making a 'provisional assessment' within the meaning of Rule 10-B. It is next stated that since the final value was not determined at the relevant time, there was no levy at all. I am unable to understand this argument. Excise duty is payable under the said Act and the Rules, and as soon as it is realised it may be said to have been 'levied'. The word 'levy' according to Wharton's Law Lexicon, means 'an act of raising money'. If tax is realized it is a levy. In this case, however, the master goes much further. The amount that has to be paid is not only received but also adjusted and settled through an account-current. What other meaning can such an adjustment or settlement have? Assuming that when the money was paid in the first instance, the liability had not been determined finally, it could only be settled or adjusted within the meaning of the Second Proviso to Rule 9, when that liability was in fact determined. In my opinion, the second proviso to Rule 9 uses the word 'settled' in the real sense of the term and can mean nothing else. It cannot possibly mean a provisional settlement. It may be, that it was not practicable for the authorities to immediately check the market value, but they certainly knew that they were proceeding under the second proviso to Rule 9 which attracted the provision of Rule 10 and, any enquiry should have been completed within the period of limitation and a demand notice given in time.

12. In my opinion, the argument that, because the value was not finally accepted when payment was received after the submission of the A. R. I form, there cannot be said to have been any 'levy' or tax, cannot be accepted. When the payment of tax is enforced there is a 'levy'. If the amount of levy has not been found to be correct, it is open to the excise authorities to make a provisional assessment. In the present case such a thing was not done. On the other hand, recourse was taken to the second proviso under Rule 9 and an account-current was opened which was settled every month. Such a settlement was in terms of the second proviso and attracted the provisions of Rule 10. In other words, where there was a short-levy the written demand had to be made within three months from the date of the adjustment in the account-current. If the excise authorities wanted to ascertain the market value they had to do it within that period. Since it was not done, the bar of limitation has intervened. In my previous judgment, the point of limitation was expressly kept open and this application has in reality been fought on the point of limitation. Mr. Roy Choudhury has not argued that if the bar of limitation under Rule 10 applied, there was any point in reopening the assessment or giving effect to the impugned notices. Unless a bar of limitation could be got over, the notices have become in-fructuous.

13. For the reasons aforesaid, 1 am of the opinion that the decision of the court below was correct and that this appeal should be dismissed, but there should be no order as to costs. All interim orders are vacated. This order will not disturb any previous order for costs.

Arun K. Mukherjea, J.

14. I agree.


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