TARE, J. - (1.) THIS is an appeal by the unsuccessful Plaintiff against the decree dated 13 -9 -1967, passed by the Second Additional District Judge, Sagar, in Civil Suit No. 4 -B of 1965, rejecting the Plaintiff -Appellant's claim for refund of excise duty amounting to Rs.54,589.23 paise, paid on tobacco.
(2.) THE Appellant, a registered partnership firm, carrying on the business of manufacturing and selling of Bidis had stocked duty paid and non duty paid tobacco in different godowns. The non duty paid tobacco was 242621.72 kgs., while the duty paid tobacco was 632 maunds, 18 seers and 8 chhattaks. There was a communal riot at Sagar on 9 -2 -1961. The mob looted and also destroyed the tobacco kept in the Appellant's godowns. The Appellant -firm got compensation from the Insurance Company regarding the price of duty paid and non duty paid tobacco. However, the Insurance Company refused to pay any compensation in respect of the duty that the Appellant had already paid on the duty paid tobacco, which would come to Rs. 54589.23 paise. As regards the excise duty on the non duty paid tobacco, the Government as ex gratia gesture remitted the sum of Rs. 1,11,719.79 paise. The Appellant -firm, therefore, after serving a notice under Section 80, Code of Civil Procedure filed the present suit against the Union of India contending that the Respondent had no right to retain the excise duty, which according to the Appellant, would be payable on manufacture or sale of Bidis. It has been the Appellant's contention that the excise duty paid was in the nature of an advance which could be appropriated by the Respondent only if the goods had been manufactured or sold. As the goods were not available for manufacture on account of the illegal action of the riotous mob, the Respondent under the provisions of the Central Excises and Salt Act, 1944, could not retain the amount of duty paid and the Respondent is bound to refund that amount. In this case the facts are not in dispute. The learned Counsel for the Respondent, however, urged that the loss has not been proved. In our opinion, that contention is without substance. The Superintendent of Central Excise had himself issued a certificate, Ex. P/11, dated 13 -5 -1961, showing the loss of tobacco. In that certificate it was also stated that the tobacco belonging to this firm recovered by the local police was 22 bags, weighing 17 mds. and 27.4 kgs. and that it had been given in the custody of the firm pending final action by the police. This quantity given in the Supratnama was from the duty paid stock of the firm. Therefore, we propose to proceed on the indisputable facts that the Appellant had kept the duty paid and non duty paid tobacco as alleged by it in the different godowns and that the entire tobacco was either looted or destroyed by the riotous mob except to the extent that the police was able to recover some quantity from some members of the riotous mob. It is also further clear that excise duty had been recovered by the Respondent in accordance with the Act and the Rules. The only question would be whether there was any liability on the Respondent to refund the excise duty, as the Appellant firm was not able to use the tobacco for the purposes of manufacture. The emphasis of the learned Counsel for the Appellant has been on certain observations made by their Lordships of the Federal Court and their Lordships of the Supreme Court in some cases regarding the nature of the excise duty which can be imposed on manufacture or sale of excisable articles. We shall deal with this aspect a little later. But three questions mainly arise for consideration in the present appeal as follows: - (i) Whether the Respondent is not entitled to appropriate the excise duty already paid and whether the duty being in the nature of an advance, is liable to be refunded? (ii) Whether the civil Court has jurisdiction to try a claim of the present nature having in view the provisions of the Central Excises and Salt Act, 1944? (iii) Whether the suit is within limitation and by what Article of the Second Schedule to the Indian Limitation Act, 1908, is the same governed?
(3.) COMING to the first question about the right of the Respondent to retain the excise duty already paid and the liability for non -refund, it is necessary to examine the provisions of the Central Excises and Salt Act, 1944, and the Central Excises and Salt Rules, 1944. Section 2, Sub -clause (c), which is definition Clause, defines 'curing' to include wilting, drying, fermenting and any process for rendering an unmanufactured product fit for marketing or manufacture. Clause (d) of Section 2 defines 'excisable goods' to mean goods specified in the First Schedule as being subject to a duty of excise and includes salt. Clause (f) of Section 2 defines 'manufacture' as follows: - Manufacture includes any process incidental or ancillary to the completion of manufactured product; and (i) in relation to tobacco, includes the preparation of cigarettes, cigars, cheroots, bins, cigarette or pipe or hookah tobacco, chewing tobacco or snuff; ..............................and the word 'manufacturer' shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account. Section 3 of the Act is the charging section. It is as follows: Section 3. -Duties specified in the first Schedule to be levied, -(1) 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 or manufactured in India as, and at the rates, set forth in the First Schedule. (1 -A) -the Provisions of Sub -section (1), shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government. (2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties; tariff values of any articles enumerated, either specially or under general headings, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force; (3) Different tariff values may be fixed for different classes or descriptions of the same article. Section 4 of the Act relates to determination of value for the purposes of duty; while Section 6 prescribes certain operations to be subject to a licence. Section 9 relates to offences and penalties and Section 11 relates to recovery of sums due to Government. Section 11 reads as follows: - Section 11. - Recovery of sums due to Government. -In respect of duty and any other sums of any kind payable to the Central Government under any of the provisions of this Act or of the rules made thereunder, the officer empowered by the Central Board of Revenue to levy such duty or required the payment of such sums may deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control, or may recover the amount by attachment and sale of excisable goods belonging to such person; and if the amount payable is not so recovered he may prepare a certificate signed by him specifying the amount due from the person liable to pay the same and send it to the Collector of the district in which such person resides or conducts his business and the said Collector on receipt of such certificate, shall proceed to recover from the said person the amount specified therein as if it were an arrear of land revenue. Section 16 casts on the owners or occupiers of land to report manufacture of contraband excisable goods. Section 33 pertains to adjudication of confiscations and penalties. Section 35 provides for appeals. It is as follows: - Section 35. -Appeals. -Any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Revenue, or, in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by Central Government. Such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against; Provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjudged against him in the original decision or order. (2) Every order passed in appeal under this section shall, subject to the power of revision conferred by Section 36, be final. Further on, Section 36 provides for a revision to the Central Government on the application of any person aggrieved by any decision or order passed under the Act or the Rules made thereunder by any Central Excise Officer or by the Central Board of Revenue, and from which no appeal lies. Section 40 of the Act provides for a bar of suits and limitation of suits and other legal proceedings. It is as follows: - Section 40. Bar of suits and limitation of suits and other legal proceedings. -(1) No suit shall lie against the Central Government or against any officer of the Government in respect of any order passed in good faith or any act in good faith done or ordered to be done under this Act. (2) No suit, prosecution or other legal proceeding shall be instituted for anything done or ordered to be done under this Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of. Thus, if the action of the Central Excise authorities be within the statutory powers, the only remedy available to the person would be the one provided by the Act and in that event, Section 40 would bar a suit. A suit can only be filed if the matter be squarely governed by the provisions of section 40 of the Act. Otherwise, the civil Court will have no jurisdiction to entertain a suit. ;