- (1.)The petitioner carries on business as a wholesale dealer in tobacco. A licence in form 5 has been granted to it by the Central Excise Department. It maintains warehouses in Fateganj (West), district Bareilly for storage of the stocks of tobacco.
(2.)On the night between December 19 and 20, 1959 a fire broke out in one of the petitioner's warehouses. The petitioner says that 520 maunds of tobacco were completely burnt and about 186 maunds of tobacco, although not completely burnt, were totally destroyed. The petitioner informed the Deputy Superintendent of Central Excise, Bareilly. In this application it prayed for remission of the excise duty in respect of the goods so destroyed. On March 31, 1960, however, the petitioner received a notice from the Deputy Superintendent of Central Excise requiring it to pay a sum of Rs. 38,919.50. The tobacco stocks of the petitioner were attached and the petitioner was informed that in case it did not pay the duty they would be, auctioned. Against the attachment order the petitioner filed an appeal before the Collector of Central Excise. It also applied to the Collector on July 28, 1960 for remission of the duty. One of the grounds for remission stated in the application was that the tobacco had been lost by "unavoidable accident" within the meaning of rule 147. Subsequently, on August 29, 1960, the petitioner was informed that the question whether the demand for duty should be confirmed or annulled had been referred to the Assistant Collector for decision. The petitioner, however, pressed the Collector to consider whether the petitioner should be granted remission of the duty under rule 147. The Superintendent of Central Excise now served a notice dated September 19, 1960 upon the petitioner directing it to show cause why the duty mentioned above should not be charged under rule 160. The proceedings upon this notice were taken up by the Assistant Collector. The petitioner objected his jurisdiction contending that jurisdiction vested in the Collector alone. This contention was not accepted by the Collector by his order dated February 21, 1961 and an appeal before the Central Board of Revenue was dismissed by it on May 9, 1961. Meanwhile, proceedings before the Assistant Collector continued. The petitioner was allowed to inspect the record and copies of statements of witnesses recorded by the Department exparte were made available to the petitioner. On October 1, 1962 the Assistant Collector made an order dropping the proceedings against the petitioner and informing it that the Collector was being approached to grant remission of the duty payable on the tobacco destroyed in the fire. No order of remission was passed by the Collector. On February 21, 1961 the Superintendent of Central Excise again issued a notice attaching the petitioner's stocks of tobacco on account of the omission to pay the duty demanded on March 31, 1960. Upon the petitioner's remonstrating with the Superintendent that it was not liable to pay, it was informed by him on February 25, 1964 that the Collector had decided "not to use his discretion under rule 147 of the Central Excise and Salt Act, 1944" and that the attachment was justified because of the petitioner's failure to pay the duty. The petitioner applied in revision to the Central Government but, the petitioner says, no order been passed. The attachment proceedings were withdrawn, but again on March 18, 1964 the Superintendent of Central Excise issued a notice requiring the petitioner to show cause why the demand dated March 31, 1960 for Rs. 38,919.50 as excise duty should not be confirmed. The petitioner filed before the Assistant Collector a copy of its revision application to the Central Government and this was treated as the petitioner's reply to the notice. On December 8, 1964 the Assistant Collector made an order reciting the history of the case and pointing out that the Collector had not found the case fit for remission of duty under rule 147, that the proceedings pursuant to the notice dated September 19, 1960 had been dropped because they had been found to be competence of the Assistant Collector who had taken them and that he was satisfied that the demand was in order and should be confirmed. On February 20, 1965 the petitioner received another notice of demand calling upon it to pay the duty. By this petition, the petitioner prays for certiorari against the order of the Assistant Collector dated December 8, 1964 and for mandamus restraining the respondents from recovering the excise duty amounting to Rs. 38,919.50.
(3.)The contention of the petitioner is that it was entitled to remission of the duty inasmuch as the case was covered by rule 147. The contention is without force. Section 3 of the Central Excise and Salt Act charges excise duty on all excisable goods. These include tobacco. Rule 7 declares that, every person who produces, cures or manufactures any excisable goods or who stores such goods in a warehouse, shall pay the duty leviable on such goods. It is under this rule that the petitioner is liable to pay duty in respect of the tobacco stored in its warehouse. When the duty is payable is indicated by Rule 9. Rule 147 reads :
"147. Power to remit duty on warehoused goods lost or destroyed. - If any goods lodged in a warehouse are lost or destroyed by unavoidable accident the Collector may in his discretion remit the duty due thereon."