- (1.) IN this petition under Article 226 of the Constitution, the 1st petitioner Company and the 2nd petitioner, who is the Director of the 1st petitioner Company, have challenged the legality of five notices of demand (for recovering excise duty) respectively dated June 17, 1964, June 26/29, 1964, June 30, July 1, 1964, July 23/24, 1964, and August 18, 1964, as also an order of detention dated June 17, 1964.
(2.) THE case of the petitioner is that the 1st petitioner Company carries on business of manufacturing cloth. On March 18, 1963, the officers of the Central Excise Department seized from the office premises of the petitioner Company books of account, documents, vouchers and other papers. This seizure of documents was challenged in a writ petition filed on April 8, 1963, being Misce. Petn. No. 127 of 1963 (Bom ). The officers of Central Excise had also raided premises of different trading firms mentioned in paragraph 3 of the petition between March and May 1963 and seized articles and things. In connection with this seizure, petition challenging the seizures were filed in this Court. By a show cause notice dated March 5/6, 1964, the 1st petitioner Company was called upon to show cause in connection with the alleged removal by the petitioner Company of the cotton fabrics mentioned in the notice without payment of excise duty and also to show cause as to why the said cloth should not be confiscated under Rules 9 (2) and 210 of the Central Excise Rules, 1944. The petitioners have referred to this notice in paragraph 4 of the petition and contended that the notice has not been issued in accordance with the provisions of law. Between March and April 1964, 35 notices of demand calling upon the petitioners to pay the aggregate sum of Rupees 92,12,775. 75 were served on the 1st petitioner Company. In connection with recovery of the amounts mentioned in those notices, 8 different detention orders were also served on the 1st petitioner Company. These notices of demand were challenged by several writ petitions which are mentioned in paragraph 5 of the petition. The matters of these petitions were settled between the parties by an agreement dated June 19, 1964. A copy of the agreement is annexed as Ex. C to the petition. The 1st petitioner Company agreed to execute a deed of mortgage in connection with the excise duty which may be held to be payable by the 1st petitioner Company. The department agreed to revise the demands made by the above notices of demand and on the withdrawal of the notices of demand, the petitions were agreed to be withdrawn. Thereafter, the department issued 5 notices of demand challenged in this petition. The language in each of the notices of demand is similar. The notice of demand dated June 17, 1964, runs as follows:--"take notice that on behalf of Central Government I hereby demand under Rule 9 (2) of the Central Excise Rules, 1944, payment by you of the sum of Rs. 49,86,444. 39. np. x x x x x being the Basic Excise duty. Additional Excise duty and Handloom Cess immediately. PARTICULARS OF DEMAND being the duty on cotton fabrics manufactured on your behalf on powerlooms situated at Madanpura, Bhiwandi, Worli Centre, Malad Centre, Kurla and Curry Road during the period 1-7-1960 to 5-3-1963. 1-1-1962 to 31-3-1963, 18-1-1963 to 28-2-1963, 1-8-1961 to 7-3-1963, October 1962 and October, 1952, respectively and cleared in contravention of Rules 9, 52, 52-A of the Central Excise Rules, 1944, without payment of duty. The details of the cloth manufactured and cleared and the duty involved are as per Annexure 'a' to this Demand Letter. "
(3.) THE other notices of demand the contents whereof are of similar nature are respectively dated 26-29th June 1964, 30th June, 1st July 1964, 23rd/24th July 1964 and August 18, 1964, and are for the respective amounts of Rs. 21,16,582. 47. Rs. 3,15,279. 72. Rupees 5. 42. 063. 16 and Rs. 12,09,157. 81. The petitioners have challenged the demands made by these notices on several grounds mentioned in paragraph 14 of the petition.;