- (1.) This is a petition under Article 226 of the Consitiution of India. It appears that the petitioner No. 2 Lala Jawahir Lal carries on the business of commission agency in tobacco, potatoes and other articles in the name and style of Messrs Jawahir Lal Hira Lal (applicant No. 1) at Lal Sarai Farrukhabad. Until the year 1959 the petitioner No. 1 held licence in forms, L-2' and L-3' in accordance with the provisions of the Central Excise Manual. In the year 1958 the petitioners had several warehouses and in all or them tobacco was stored. One of these warehouses was attached Municipal Board Farrukhabad but let out to the petitioners on rent. In these warehouses 1288 mds. 38 seers and 8 chhataks of tobacco was stored. On the night between the 21st and 22nd of June, 1958 fire broke out in these warehouses. All the tobacco stored in the warehouses, was totally burnt and reduced to ashes while the remainder was badly damaged, and rendered unfit for use. It is not in dispute that the Local Central Excise officer reached the spot when the fire was still raging though according to the petitioners he arrived on information sent by the petitioners but according to the opposite parties he reached there on information about the fire being conveyed to him by a Sepoy. The most important allegations in the affidavit filed in support of this petition are to be found in paragraphs 10, 11, 12, 13 and 14. They are reproduced below :- "10. That the applicant applied for permission to destroy what remained as the result of the fire on the site of the warehouse mentioned in paragraph 4. This application was made under the provisions of Excise Rule 149 and the applicant prayed for exemption from excise duty. An extract of the application is filed as Annexure 30 of this affidavit. 11. That the Assistant Collector, Central Excise, Farrukhabad gave permission to the applicant to destroy the remanents of the warehouse aforesaid. The applicant was informed of this permission by a letter dated 10-9-58. A true copy of the letter is filed as annexure No. 4 to this affidavit. 12. That the applicant received another letter dated 23-9-1958 from the Superintendent Central Excise, Farrukhabad asking it to destory the remanents existing on the site of the warehouse after weighment by the Deputy Superintendent, Farrukhabad. *A true copy of the letter is filed as Annexure 5 of the affidavit. 13. That the Deputy Superintendent, Central Excise, Farrukhabad and the Inspector, Central Excise concerned reached the spot on 20-12-58. The weighment of the ashes and partially tobacco was completed in five days from the "20th December, 1958 to the 27-12-1858. The ashes partially tobacco were found to weigh 582 maunds 35 seers. The Central Excise Authorities aforesaid got destroyed some quantity of the ashes and partially tobacco in their presence. They got the rest of the ashes and' partially burnt tobacco mixed with earth and got the same removed for destruction in their presence. 14. That the fact of destruction and removal for destruction stated in the foregoing paragraph was noted by the Central Excise Inspector on the back of the application. Annexure 3 a true coy of this note is filed as Annexure-6 to this affidavit."
(2.) The reply to these paragraphs is contained in paragraph 11 of the counter-affidavit sworn by Prakash Swarup Anand, Superintendnet of Central Excise, Farrukhabad, which reads as follows :- "11. In regard to paras 10 to 14 of the affidavit it is stated that Shri Jawahar Lal addressed a letter to the Superintendent of Central Excise, Fatehgarh on 1-7-1958 seeking orders for destruction of 583 Mds. of burnt tobacco. Orders of Assistant Collector of Central Excise, Farrukhabad permitting destuction of the burnt tobacco were communicated to the petitioners by the Deputy Superintendent of Central Excise, M. O. R., Farrukhabad in his letter dated 11-9-1958. In all 582 Mds. 35 Srs. of burnt tobacco mixed with earth was disposed of as under in the presence of a Central Excise Inspector, Date Quantity Disposed of Manner of Disposal Mds. Srs.Ch. 20-12-1958 150 0 0 Thrown in a dry well in Lal Sarai. 22-12-1958 240 20 0 Thrown in dry well and other pits in Lal Sarai. 23-12-1958 72 0 0 Cleared from Lal Sarai for destruction. 24-12-1958 54 0 0 Do 27-12-1958 66 15 0 Do 582 35 0 The removal of the above tobacco was allowed on A. R. I. No. 623/1/58-59, dated 20-12-1958. Annexure 3 to the affidavit is not an extract from the applicant dated 1-7-1958 referred to above. Similarly annexure 4 to the affidavit is not a copy letter according permission for destruction of burnt tobacco of the petitioners. True copies are filed as Annexure A and B with this counter-affidavit".
(3.) It is, therefore, a matter of admission that the local Central Excise officer was present when the fire was raging and that tobacco rendered unfit for human use was disposed of in the presence of the Central Excise Inspector in pursuance of the permission dated 11-9-1958 granted by the Deputy Superintendent, Central Excise Incharge M. O. R., Farrukhabad vide Annexure B to the counter affidavit. Annexure A to the counter-Affidavit shows that the petitioners wrote to the Superintendent, Central Excise, Farrukhabad on the 1st of July, 1958 informing him about the fire and requesting him for permission to destroy the burnt tobacco which was unfit for human use. On the 20th June, 1960 the Collector of Central Excise, passed an order demanding Rs. 51,475.62 np. as excise duty on the entire stock of tobacco stored in the ware-house, that is to say, on 1288 maunds 38 seers and 8 chhatakas of tobacco. The notice demanding payment was served on the petitioners on 20th of June, 1960 and again on 22nd of June, 1960. This petition contains three prayers. The first prayer is that a writ of certiorari or other suitable writ, order or direction be issued quashing the order dated 20-6-1960 and notice dated 22-6-1960. The second prayer is for a writ of mandamus which the learned counsel for the petitioners had not only not pressed but has actually withdrawn. The third prayer is for interim relief with which I am not concerned at this stage. The learned counsel for petitioners has relied on Rule 147 and 149 of the Central Excise Manual. These rules read as follows : "147. Power to remit duty on ware-housed goods lost or destroyed: If any goods lodged in a ware-house are lost or destroyed by unavoidable accident, the Collector may in his descretion remit the duty due thereon : Provided that if any goods be so lost or destroyed in a private ware-house notice thereof shall be given to the officer-in-charge of the ware-house within forty-eight hours of such loss or destruction. 149. Destruction of unusable material waste and other refuse. Every owner of goods stored in a ware-house who wishes to claim immunity from duty in respect of any goods unfit for consumption or manufacture shall destroy them in the presence of an officer or shall show to the satisfaction of the officer that they are being applied to some purpose which render them eligible for remission of duty.";