- (1.) The Adarsh Textile Mills of Amritsar have filed this petition under Article 226 of the Constitution in the following circumstances. The 1st Schedule to the Central Excise and Salt Act, 1944, was amended by the Finance Act, 1954 (Act XVII of 1954). Under this amendment an excise duty of six pies per square yard was imposed on the production and manufacture of rayon or artificial silk fabrics. The Superintendent of Central Excise, Circle II, Amritsar, sent a notice under rule 10-A of the Central Excise Rules, made under section 37 of the Act, demanding Rs. 26,260/8/- as excise duty payable by the petitioner for the period 1st March, 1954 to 1st March, 1955 on account of the manufacture of artificial silk cloth. The firm did not accept its liability to pay this amount on various grounds and filed an appeal under section 35 of the Central Excise and Salt Act (hereinafter called the 'Act') on 12th March, 1957 before the Collector of Central Excise, Delhi (hereinafter called the 'respondent'). On 20th March, 1957 the said Collector wrote to the petitioning firm inquiring if it had deposited the amount of duty demanded from it and if not then directed it to deposit the whole amount within ten days. In this letter it was further stated that the appeal was liable to dismissal for non-compliance with this direction and referred to section 189 of the Sea Customs Act, 1878 (Act VIII of 1878), read with rule 215 of the Central Excise Rules, 1944 . Thereupon the petitioning firm filed this petition challenging the validity of the respondent's demand on the ground that rule 215 is invalid and is ultra vires of the Act under which it has been made. Now rule 215 reads - "The provisions of sections 168, 189 and 192 of the Sea Customs Act, 1878 shall mutatis mutandis be applicable to any decision or order relating to any duty, fine or penalty leviable in respect of any goods under the Act or under these rules."
(2.) Section 189 of the Sea Customs Act reads - "Where the decision or order appealed against relates to any duty or penalty leviable in respect of any goods, the owner of such goods, if desirous of appealing against such decision or order, shall pending the appeal, deposit in the hands of the Customs Collector at the port where the dispute arises the amount demanded by the officer passing such decision or order. When delivery of such goods to the owner thereof is withheld merely by reason of such amount not being paid, the Customs Collector shall, upon such deposit being made, cause such goods to be delivered to such owner. If upon any such appeal it is decided that the whole or any portion of such amount was not leviable in respect of such goods the Customs Collector shall return such amount or portion (as the case may be) to the owner of such goods on demand by such owner."
(3.) Thus by virtue of this rule the provisions of section 189 have been made applicable to any order relating to any duty etc. leviable under the Act or under its rules. It is rightly conceded by the petitioner firm that if rule 215 is valid, then the respondent was within his power to demand deposit of the duty before the appeal was heard and decided. Section 35 of the Act gives a person aggrieved by any decision or order passed by the Central Excise Officer right to file an appeal and the only restriction to this absolute right imposed in the section is that it should be filed within three months from the date of such a decision or order. It follows that if rule 215 is invalid, then the respondent's demand is also invalid.;