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(6) The respondents state that section 3 of the Additional Duties Act makes all the provisions of the Central Excises Act and the Rules made there under, including those relating to refund and exemption from duty applicable, so far as may be, to the Act. They say that the wordings "apply in relation to the levy and collection of additional duties as they apply in relation to the levy and collection of duties of excise on the goods specified" are expressive enough to make all provisions in the Central Excises Act and Rules applicable, if they are "in relation to" the levy and collection of excise duty. They say that confiscation and penalty necessarily flow out of levy and collection of duty and in all cases where there is an evasion of payment of duty, which is intricably related to the levy and collection of duty, the provisions as contained in the Central Excises Act will necessarily become applicable.. The respondents also referred to observations of the Supreme Court in M/s. Ujagar Prints v. Union of India , to contend that all penal and confiscatory provisions in the Central Excise Rules would be applicable respecting the levy and collection of additional duties under the Additional Duties Act. The respondents then say that Chapter Ii of the Central Excises Act deals with levy and collection of duty and sections 3 to 12 all fall under this Chapter. Sections 9, 9A and 9AA specifically provide for offences and penalties. Therefore, they say that contention of the petitioners that levy and collection of duty cannot comprehend within itself offences and penalties is, on their own showing, ill founded. According to the respondents the contention of the petitioners that the proposal to impose penalties as stated in the show cause notices is without jurisdiction, is totally baseless.

(7) The only question that arises for consideration is if the respondents have jurisdiction to resort to penalty proceedings or forfeiture of goods provided under the Central Excise Rules for alleged default under the Central Excises Act or the Central Excise Rules in so far these provisions are made applicable by virtue of section 3 of the Additional Duties Act. In short, it would be putting like this, if the term "levy and collection" of additional duty of excise would include levy and collection of penalty and forfeiture of goods and also prosecution provided under the Central Excises Act and the Central Excise Rules. The issue, thus, involved in these writ petitions would appear to be rather simple, but it is not so as great deal of arguments were addressed by Mr. K. Parasaran, former .attorney General of India, and Mr. G. Ramaswamy, the present Attorney General, M/s. Sanghi Textiles Processors Pvt. Ltd. and Ors. (CW 327/90, M/s. Karan Textile Industries pvt Ltd. & Ors. (.CW 787/90) M/s. Dilip Textiles (P) Ltd. & Anr. (CW 2974/90), M/s. Sri Ram Mills & Anr. (CW 2975/90), M/s. Hyderabad Silk Mills Pvt. Ltd. & Anr. (CW 3895/90), M/s. S. Kumars Ltd. and Anr (CW 1185/91) Vs. Union of India and others appearing respectively for the petitioners and the respondents. Mr. Parasaran said that under Article 265 of the Constitution no tax shall be levied or collected except by authority of law. He said that authority has to be specific and explicit and expressly provided. He said the Additional Duties Act created liability for additional duty for excise but created no liability for any penalty. That being so the respondents could not proceed to impose any penalty or confiscate the goods of the petitioners by invoking the provisions of the Central Excise Act and the Rules made there under. He said if the definition of ''additional duties" as contained in clause (a) of section 2 of the Additional Duties Act is substituted for expression "additional duties" as appearing in section 3(3) of the Act, this would read as under:- ''THEprovisions of the Central Excises and Salt Act, 1944 (1 of 1944). and the rules made there under, including those relating to refunds and exemptions from duty, shall, so far as may be, apply in relation to the levy and collection of the "duties of excise levied and collected under sub-section ( 1 ) of section 3" as they apply in relation to the levy and collection of the duties of excise on the goods' specified in sub-section (1)."

(9) Countering these arguments Mr. Ramaswamy said that penalty had two meanings penalty on tax was an interest on tax or an additional tax and the other meaning was penal consequences of either deprivation of property or exaction of money for violation of a statutory obligation. He said penalty under the Central Excises Act was not an additional tax or an interest on tax for non-payment or delayed payment, but a penal provision for exaction of money for violation of statutory obligations. He said petitioners under the Central Excise Rules even for assessment of additional duties would have to comply with the various provisions of the Central Excise Rules by virtue of sub-section (3) of section 3 of the Additional Duties Act. Once the liability for compliance with the Rules was attracted by referential legislation, the consequence of non- compliance with the rules attracted an independent liability of penalty as a direct consequence and did not owe its potency to sub-section (3) of section 3 of the Additional Duties Act. Mr. Ramaswamy said it was a direct liability under the Central Excise Rules. Then he said the entire purpose of the Central Excises Act and the Rules there under was to levy and collect central excise and that the provisions of the rules were self contained, each part containing certain obligations and providing for a consequence of penalty for non-compliance with those obligations. He said whole set of Rules were part of a scheme of levy and collection and penalty provisions were part of that scheme, and that it was well settled that in tax laws penalty provisions were, part and parcel of assessment and in fact part of the process of levy and collection of tax. He then said that the additional duty of excise and the central excise duty under the Central Excises Act were both on the same goods and when sub-section (3) of section 3 of the Additional Duties Act said that the Central Excises Act and Rules for levy and collection would apply to the levy and collection of additional duty it was as if under the Central Excises Act there was another section as imposing an additional duty. Therefore, the Central Excises Act and the Rules made there under would apply to levy and collection of both the central excise duty and the additional duty of excise, there being no difference in procedure. Mr. Ramaswamy said it was something like charging two duties on the same goods and so the obligations imposed for levy and collection thereof were same. Mr. Ramaswamy said Khernka's case did not apply to the facts of the present case and he referred to two decisions of the Supreme Court in C. A. Abraham v. Income-tax Officer, Kottayam and another, , and Shiv Dutt Rai Fateh Chand etc. v. Union of India and another, , Mr. Ramaswamy also referred to the decision of the Supreme Court in Ujagar Prints case and said that the ratio in that caste completely covered the point in issue in the present case. He also said the use of the phrase "including refunds and exemptions" used in sub-section (3) of section 3 of the Additional Duties Act was only by way of abundant caution to avoid any ambiguity that may creep in as to whether the words "levy and collection" would include exemption and refunds as well. He said the Parliament used this phrase for extending the meaning and not for restricting the scope of the incorporation of the Central Excise Rules. He also said that the meaning of the would "include" used m a definition section of an Act was different from the word "including" used in sub-section (3) of section 3. Mr. Ramaswamy also said that the phrase "so far as may be" was M/s. Sanghi Textiles Processors Pvt. Ltd. and Ors. (CW 327/90), M/s. Kiran Textile Industries Pvt Ltd. & Or,. (CW 787/90) M/s. Lilip Textiles (P) Ltd. & Anr. (CW 2974/90) M/s. Sri Ram Milsl & Anr. Cw 2975/90) M/s. Hyderabad Silk Mills Pvt. Ltd. & Anr. (CW 3895/90) M/s. S. Kumars Ltd. and Anr. (CW 1185/91) Vs. Union of India and others used to mean "so far as may be necessary in order to carry into effect the purposes of the Central Excises Act and the remedies under that Act, Lastly, he said that the Act was in force since 1957 and the expression similar to sub-section (3) of section 3 of the Additional Duties Act had been used in various Finance Acts levying special duties of excise and there had never been any challenge as made in the preseat petitions.

(4)The provisions of the Central Excise Act and the rules there under, including those relating to refunds and exemption from duty, shall, so far as may be, apply in relation to the levy and collection of the duty of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or rules."

(28) The Supreme Court in that case held that sub-clanses (3) and (4) of section 80 of the Finance Act, 1965, referred to the procedural aspect such as the quantification and collection of the special duty and simply because quantification and collection of the special duty under the Finance Ac: was to be done in accordance with the provisions of the Central Excises Act, such duty did not become leviable, that is to say chargeable, under the Central Excises Act. Ranganthan J. however, said that though the wording of section 80(4) of the 1965 Finance Act was identical with that of section 3(3) of the Additional Duties Act and had been interpreted as attracting only the procedural aspect of the Central Excises Act, but in his opinion, while that might have been principle of section 80(4) of the Finance Act, 1965, it would not be correct to draw the same conclusion about the Additional Duties Act. He said section 80(1) of the Finance Act, 1965, fully exhausted the aspect of charge of the special duty and it specified the goods to be taxed and also laid down that special duty was to be a percentage of the normal excise duty chargeable en those goods. He said nothing else remained except the quantification and the collection, but that was not the position before him. He said having regard to the nature and content of the levy indicated in section 3(1) it was obvious that section 3(3) had to have the effect of attracting not only the purely procedural and machinery previsions of the Central Excises Act but also some of its charging provisions. The learned Judge reasoned that the Additional Duties Act could not be worked at least in respect of goods where an ad valorem rate was prescribed unless section 3(1) was read with section 3(3) and the definition of "assessable value" in section 4 of the Central Excises Act was read with the Additional Duties Act. Ranganathan, J. was, therefore, of the view that the Finance Acts which levied special or regular or additional excise duties contained in themselves all the elements of charge of duty. The goods were mentioned and the duty as to be levied either at a percentage of the normal excise duty payable under the Central Excises Act or at a percentage of the value of the assessable goods as determined under that Act. All that was further needed was the applicability of the procedural provisions of the Central Excises Act. He said "however, the 1957 Act (Additional Duties Act) is incomplete as to the basis of the charge and its provisions would become totally unworkable unless the concepts of 'manufacture and 'assessable value' as determined under the 1944 Act (Central Excises Act) are carried into it." It was, therefore, in this context that the learned Judge made observations mentioned in the concluding paragraph of the judgment and quoted above. This, however, does not advance the case of the revenue any further that charge of penalty is spelled out under section 3(1) or even under section 3(3) of the Additional Duties Act. We may also notice that Venkatachaliah, J. who delivered the main judgment in the case (M/s. Ujagar Prints) did not say anything on the judgment of the Court in Associated Cement Company's case .