Case: Shiva Glass Works Co. Ltd Vs. Assitant Collector Of Central Excise And Others

assessment, the appellant was giving a guarantee to the extent of the sum mentioned in the bond for payment of the duties. The learned Single Judge has also pointed out that it appeared to be the common case of the parties that in order to facilitate the assessment of the goods by excise authorities, the appellant used to file the price list in advance and after acceptance provisionally of the price list, the goods used to be cleared and if subsequently any discrepancy was detected or found, the same used to be paid by the appellant 5. The question as to whether Rule 10 or Rule 10-A of the Rules was applicable has to be determined in the background of the procedure which was followed even according to the appellant as indicated above. The legal position that Rule 10-A does not apply where the case is covered by Rule 10 of the Rules is well settled in view of the decision of this Court in N. B. Sanjana, Asstt. C.C.E. v. Elphinstone Spg. & Wvg. Mills Co. Ltd. ( 1971 (1) SCC 337 : 1971 (3) SCR 506 ), on which reliance has been placed by learned counsel for the appellant. Consequently, Rule 10-A could be attracted only if the case does not fall within the purview of Rule 10. It was conceded before the learned Single Judge on behalf of the respondents that the respondents were not proceeding under the provisions of Rule 9-B. On this basis and on his own finding also that Rule 9-B was not attracted, the learned Single Judge held that it was not a case of provisional assessment but a case of regular assessment in pursuance whereof duty was paid by the appellant and that since the case of the respondents was that the appellant had manufactured documents as was revealed as a consequence of the search and seizure referred to above it was a case of short levy due to misstatement by the appellant. Consequently, the case clearly fell within the purview of Rule 10 of the Rules. The Division Bench of the High Court in appeal did not, and in our opinion rightly, subscribe to the aforesaid finding. Simply because Rule 9-B of the Rules was conceded not to have been taken recourse to by the respondents so that a provisional assessment could be said to have come into existence in its statutory sense a contemplated by the said rule when duty was paid at the time of clearance of the goods, the conclusion was not inescapable, that a final assessment had come into being at that time. In our opinion, in view of the procedure adopted by the appellant referred to above it was apparently a case where duty was calculated on the basis of price lists supplied by the appellant to facilitate the clearance of the goods and the correct amount of duty payable was yet to be determined after subsequent verification and appellant was under an obligation to pay, on the basis of the bond executed by them, the difference of the amount of the duty paid at the time of clearance of the goods and the amount found payable after subsequent verification. In the judgment appealed against the Division Bench of the High Court has found that there was no assessment as is understood in eye of law but only a mechanical settlement or adjustment of duties on the basis of the sale prices filed by the appellant had been made and at best, it was a case of an incomplete assessment which the excise authorities were entitled to complete under Rule 10-A. In taking this view the Division Bench of the High Court has relied on a decision of this Court in Assistant Collector of Central Excise, Calcutta Division v. National Tobacco Co. of India Ltd. ( 1972 (2) SCC 560 : 1973 (1) SCR 822 ). In that case also the company used to furnish quarterly price lists which used to be accepted for purpose of enabling the company to clear its goods and according to the excise authorities these used to be verified afterwards by obtaining evidence of actual sale in the market before issuing final certificates that the duty had been fully paid up. The prices of the goods to be cleared were furnished by the company on forms know as ARI forms in that case also. It was held that only a mechanical adjustment for settlement of accounts by making debit entries was gone through and that it could not be said that any such adjustment was assessment which was a quasi-judicial process and involved due application of mind to the facts as well as the requirements of law. With regard to the debit entries it was held that the making of such entries was only a mode of collection of tax and even if payment or actual collection of tax could be spoken of as a de facto "levy" it was only provisional and not final. It could only be clothed or invested with the validity after carrying out the obligation to make an assessment to justify it. It was also held that it was the process of adjustment that really determined whether levy was short or complete. It was not a factual or presumed levy which could in a disputed case prove an "assessment". This had to be done by proof of the actual steps taken which constitute assessment 6. We are of the opinion that in view of the procedure adopted by the appellant in the instant case referred to above and the law laid down by this Court in the case of National Tobacco Co. of India Ltd. ( 1972 (2) SCC 560 : 1973 (1) SCR 822 ) it is not possible to take any exception to the finding of the Division Bench in the judgment appealed against that it was a case which fell within the purview of Rule 10-A and not Rule 10 of the Rules.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]3. In elaboration of his submission that it was a case covered by Rule 10 of the Rules learned counsel for the appellant pointed out that since the case of the respondents was that on the basis of the documents seized during the search of the appellants office on September 26, 1963 it was found that the duty paid by the appellant on the basis of price lists furnished by the appellant at the time of clearance of the goods was deficient, it was a case where duty had been short-levied "through misstatement as to the quantity, description or value of such goods on the part of the owner" as contemplated by Rule 10. We find it difficult to agree with the submission. The procedure adopted by the appellant was indicated by the appellant under its letter dated March 23,The learned Single Judge has also pointed out that the appellant used to clear the goods by executing bond and that in the specimen copy of the bond produced in court it was stated that whereas final assessment of excise duty of glass and glasswares made by the appellant from time to time could not be made for want of full particulars as regards value, description, quality or proof thereof or for non-completion of chemical or others tests and whereas the appellant had requested the excise authorities as per Rule 9-B of the Rules to make provisional assessment of excise duty of the goods pending final assessment, the appellant was giving a guarantee to the extent of the sum mentioned in the bond for payment of the duties. The learned Single Judge has also pointed out that it appeared to be the common case of the parties that in order to facilitate the assessment of the goods by excise authorities, the appellant used to file the price list in advance and after acceptance provisionally of the price list, the goods used to be cleared and if subsequently any discrepancy was detected or found, the same used to be paid by thethe case clearly fell within the purview of Rule 10 of the Rules. The Division Bench of the High Court in appeal did not, and in our opinion rightly, subscribe to the aforesaid finding. Simply because Rule 9-B of the Rules was conceded not to have been taken recourse to by the respondents so that a provisional assessment could be said to have come into existence in its statutory sense a contemplated by the said rule when duty was paid at the time of clearance of the goods, the conclusion was not inescapable, that a final assessment had come into being at that time. In our opinion, in view of the procedure adopted by the appellant referred to above it was apparently a case where duty was calculated on the basis of price lists supplied by the appellant to facilitate the clearance of the goods and the correct amount of duty payable was yet to be determined after subsequent verification and appellant was under an obligation to pay, on the basis of the bond executed by them, the difference of the amount of the duty paid at the time of clearance of the goods and the amount found payable after subsequent verification. In the judgment appealed against the Division Bench of the High Court has found that there was no assessment as is understood in eye of law but only a mechanical settlement or adjustment of duties on the basis of the sale prices filed by the appellant had been made and at best, it was a case of an incomplete assessment which the excise authorities were entitled to complete under Rule 10-A.We are of the opinion that in view of the procedure adopted by the appellant in the instant case referred to above and the law laid down by this Court in the case of National Tobacco Co. of India Ltd. ( 1972 (2) SCC 560  : 1973 (1) SCR 822 ) it is not possible to take any exception to the finding of the Division Bench in the judgment appealed against that it was a case which fell within the purview of Rule 10-A and not Rule 10 of the Rules.