Sudhir Ranjan Roy, J. - (1.) This is a strange and peculiar case where the Central Excise authorities have proceeded to realise excise duty not from the manufacturer or producer but from a consumer out and out and that too on the basis of an exemption notification.
(2.) The facts : The petitioner, The Statesman Limited, is a Company incorporated under the provisions of the Indian Companies Act, 1913 and has its registered office at Statesman House, No. 4, Chowringhee Square, Calcutta. The business of the Company is the publication and sale of newspapers including The Statesman which is published daily both in Calcutta and New Delhi.
(3.) The subject matter of the challenge in the instant writ petition is a purported show cause demand notice dated October 3, 1985 issued by the Assistant Collector of Central Excise, Calcutta-1 Division. By the said show cause notice (in short, the impugned notice) the Company has been required to show cause why Central Excise duty to the tune of Rs. 19,29,583.23 for the period from May 1980 to May 1985 should not be demanded and paid by the Company under Rule 9(2) of the Central Excise Rules (in short, the Rules) framed under the Central Excise and Salt Act, 1944 and Section 11A thereof. The allegations on the basis of which the said impugned notice has been issued are as follows :- "On scrutiny of the records of the said assessee, it is noticed that the said assessees are receiving newsprint falling under Item No. 17 of the Central Excise Tariff from different factories and enjoying exemption under Notification No. 163/67, dated 21-7-1967 the waste arising out of opening waste of the newsprint and reel ends of the newsprint are being sold by them in the market as waste. In terms of said notification the waste arising in the process of printing of newspaper may be used for any other purpose without payment of duty if the proper officer is satisfied that waste is genuine and cannot be used again. From the very name it indicates that the wastes as aforementioned are not arising in the process of printing therefore the said assessee are not entitled to get the benefit of exemption as stipulated in the abovementioned notification. Further, the said assessee suppressed such selling of the above waste and also did not submit any declaration to the department in this regard. From their records the evasion of Central Excise duty to the tune of Rs. 19,29,583.23 has been calculated." According to the petitioner, the said impugned notice has been issued in abuse of power and without application of mind and also for extraneous reasons since on the allegations made in the said notice, no case for payment of any excise duty has been made out. As a matter of fact, the impugned notice has been issued without jurisdiction and is ultra vires the Central Excises and Salt Act and the Rifles framed thereunder.;