Judgment 1. THE petitioner company is a manufacturer of cigarettes and tobacco and owns a factory at Agarpara, in the District of 24 Parganas. As such manufacturer, the petitioner company has to pay excise duty on the value of cigarettes manufactured by it. At the relevant period, namely, during the years 1955 to 1957, the excise duty used to be levied on a slab system, for example, if the price exceeded Rs. X but not Rs. Y per thousand sticks of cigarettes then there was duty levied at a particular rate, but if the price exceeded Rs. Y but not Rs. Z per thousand sticks of cigarettes then duty was levied at a much higher rate. It was, therefore, to the interest of the manufacturer to keep the value within the lower slab and it was the endeavour of the Central Excise Authorities to see that the value was properly calculated. 2. THE petitioner company being a large scale manufacturer of cigarettes, special arrangement was made for collection of excise duty from it. Every year, in January, April, July and October, the petitioner company used to advise the Central Excise Authorities on the price structure of all brands of cigarettes manufactured by it. This was done by issue of consolidated quarterly price lists, in a form prescribed. The Central Excise Authorities used to verify the price lists from the market and then issue a certificate to the petitioner company accepting the price lists, with or without modification. Until such time as the verification was completed, the price list used to be provisionally approved and excise duty used to be collected on that basis until issue of a final certificate. For the purpose of facility of collection of duty, the petitioner company maintains a large sum in deposit, in a current account with the Central Excise authorities. Before clearance of cigarettes manufactured by the petitioner company, it submits in the prescribed form, known as A. R. I, forms, particulars of cigarettes to be cleared. The entries in the form are checked, the duty payable is assessed and is paid by debit adjustment in the current account. On realisation of the duty, in the manner aforesaid, cigarettes are allowed to be cleared. The entries in the form are checked, the duty payable is assessed and is paid by debit adjustment in the current account. On realisation of the duty, in the manner aforesaid, cigarettes are allowed to be cleared. The said current account is stated every month in a form known as "personal Ledger Account", showing there in the opening balance of the month, credit deposits, debits during the month and the closing balance. The form is signed by the petitioner and is reported to the authorities in token of settlement of account. The Central Excise Authorities maintain an office in the factory premises of the petitioner company from where the clearance of cigarettes and the collection of duty thereon are primarily controlled. The price list, as originally prescribed, had nine columns, including a column headed "distributor's selling price". This price used to be verified by Central Excise Authorities and a certificate used to be given. Until then, excise duty used to be collected provisionally on the basis of unverified distributor's selling price and if any discrepancy was found on subsequent verification, the difference, if short levied, used to be subsequently adjusted. The petitioner company used to issue the price list in the old style, upto the quarter beginning July, 1957, when this form was suddenly changed. The new form contained only six headings, namely, (1) brand (ii) net assessable price (iii) duty (iv) stockist's price (v) retail price per packet and per tin (vi) remarks. The heading "distributor's selling price" disappeared from the prescribed price list. 3. THE object with which this change in the price list was introduced appears to be differently understood by the petitioner company and the excise authorities. According to the petitioner company the change was introduced because many of the particulars in the old form of price list was unnecessary. According to the respondents excise authorities, the change was deliberately effected in order to put a stop in avoidance of payment of excise duty. It was argued that the basis of calculation of duty was not the price at which the company sold to is stockists or distributors, as the case may be, but price at which the goods were- capable of being sold in a wholesale market to an. independent buyer. It was argued that the basis of calculation of duty was not the price at which the company sold to is stockists or distributors, as the case may be, but price at which the goods were- capable of being sold in a wholesale market to an. independent buyer. It was further argued that under the old price list it was possible to show the price at the lower slab and, therefore, the new form was introduced. 4. AFTER the introduction of the new form, a Deputy Superintendent of Central Excise wrote the following letter to the petitioner company, on November 5, 1958: "it has been decided that henceforth all assessments of cigarettes should be made on the basis of the wholesale cash selling price at which the stockists or agents are selling the same to an independent buyer in an open market. The assessable value should be worked out by deducting general trade discount, if any, declared and the Central Excise Duty chargeable and other local taxes." Accordingly you are requested to furnish such price list immediately for determining correct assessable values. "an early action to this effect may be taken to enable me to implement the aforesaid instructions for assessment with immediate effect." Thereafter, on November 7, 1958, the petitioner company was served with a notice of demand purporting to be under r. 10 of the Central Excise Rules, 1944, demanding payment of Rs. 1,67,073. 40 np. as basis Central Excise Duty and Rs. 76,574. 85 np. as additional Central Excise Duty, on the ground of short levy of excise duty on "no. 10" brand of cigarettes cleared from the factory of the petitioner company from August 10, 1958 to November 5, 1958. The petitioner company felt aggrieved by the notice on a two-fold ground, namely, (i) that it had paid a sum of Rs. 1,91,437. 13 np. as Central Excise Duty and a sum of Rs. 76,574. 85 np. as additional duty on the clearance aforesaid upon due assessment of duty and (ii) that the assessment was reopened without notice to it and without opportunity to it to make objections. 5. AGAIN on November 12, 1958, the petitioner company was served with another notice, purporting to be under r. 10a of the Central Excise Rules, 1944, demanding payment of Rs. 6,16,467. 49 np. as the Central Excise Duty and Rs. 2,10,492. 15 np. 5. AGAIN on November 12, 1958, the petitioner company was served with another notice, purporting to be under r. 10a of the Central Excise Rules, 1944, demanding payment of Rs. 6,16,467. 49 np. as the Central Excise Duty and Rs. 2,10,492. 15 np. as the additional Central Excise Duty on the ground of short levy of excise duty on "no. 10" brand of cigarettes cleared from the factory of the petitioner company between October 1957 to August 9, 1958. The petitioner company felt aggrieved by the notice on a. two-fold ground, namely, (i) that it had paid a sum of Rs. 6,79,996. 73 np. as Central Excise Duty and a sum of Rs. 2,10,492. 15 np. as the additional duty on the clearance upon due assessment and (ii) that the assessment was reopened without notice to it to make objection. 6. LASTLY, on November 13, 1958, the petitioner company was served with a notice purporting to be under r. 10a of the Central Excise Rules, 1944, demanding payment of Rs. 40,726. 48 np. as the Central Excise Duty and Rs. 16,958. 50 np. as the additional duty on the ground of short levy of excise duty on the following brands of cigarettes (i) De Luxe Tenor (Magnum) from January 1, 1958 to January 28, 1958 (ii) Maypole from January 1, 1958 to February 5, 1958 (iii) Carlton Gold Seal from January 1, 1958 to February 7, 1958 (iv) John Peel from January 1, 1958 to January 31, 1958 (v) Light House from January 1, 1958 to January. 16, 1958 and (vi) Gold Link from January 1, 1958 to January 26, 1958 cleared from the factory of the petitioner company. The petitioner company felt aggrieved by the notice on a twofold ground, namely, (i) that it had paid a sum of Rs. 1,33,699 np. as Central Excise Duty and a sum of Rs. 1,89,840. 74 np. as the additional duty on the clearance upon due assessment and (ii) that the assessment was reopened without notice to it to make objections. Against the assessment of the demands as aforesaid, the petitioner company moved this court, under Article 226 of the Constitution, and obtained a Rule, which was numbered as Matter No. 218 of 1958. 1,89,840. 74 np. as the additional duty on the clearance upon due assessment and (ii) that the assessment was reopened without notice to it to make objections. Against the assessment of the demands as aforesaid, the petitioner company moved this court, under Article 226 of the Constitution, and obtained a Rule, which was numbered as Matter No. 218 of 1958. Sinha, J. made the Rule absolute, on February 5, 1960, with the following observations: "the determination of value for the purpose of duty, to be made under section 4, involves, or might involve, complicated factors, and a determination could only be done after gathering materials or evidence upon which alone the calculation can be based. Obviously, this cannot be done wholly behind the back of the assessee. The evidence upon which it has proposed to rely should be disclosed to the assessee and although the proceedings are not to be considered as akin to a judicial trial, the rules of natural justice must be observed and the assessee must be given proper opportunity of testing the materials upon which the authorities wish to rely and of providing materials on their own behalf. "for the reasons aforesaid, this rule must be made absolute and the assessments already made, upon which the demand notices were issued under Rules 10 or 10a must be quashed and/or set aside by a writ in the nature of certiorari and there must be issued a writ in the nature of mandamus directing the respondents not to take any further proceedings based on the said notices, unless a proper assessment has been made. Nothing in this order will prevent the respondents from proceeding to take any steps that may be necessary for such assessment, or for the realisation of the revenue in accordance with law. As I have stated above, the point of limitation has not been decided by me in this case and is kept open. " 7. AFTER the disposal of the Matter No. 218 of 1958, the respondent addressed the following letter, dated 24, 1960' to the petitioner: "in connection with the assessment of Central Excise duties for the periods: i. from 1. 10. 57 to 5. 11. 58 in respect of 316,885,000 of "no. Ten brand cigarettes, ii. from 1. 1. 58 to 28. 1. 58 in respect of 6,600,000 of "d. L. T. Mag" Cigarettes, iii. from 1. 1. 58 to 5. 10. 57 to 5. 11. 58 in respect of 316,885,000 of "no. Ten brand cigarettes, ii. from 1. 1. 58 to 28. 1. 58 in respect of 6,600,000 of "d. L. T. Mag" Cigarettes, iii. from 1. 1. 58 to 5. 2. 58 in respect of 9594,000 of "may Pole" cigarettes, iv. from 1. 1. 58 to 7. 2. 58 in respect of 3143,500 of "carltons gold Seal" Cigarettes, v. from 1. 1. 58 to 31. 1. 58 in respect of 1471,250 of "john Peel" cigarettes, vi. from 1. 1. 58 to 16. 1. 58 in respect of 8200,000 of "light House cigarettes, and vii. from 1. 1. 58 to 16. 1. 58 in respect of 9070,000 of "gold Link cigarettes, please note that a total sum of Rs. 10,05,133. 25 np. (Rupees ten lakhs five thousand one hundred thirty-three and twenty-five naya Paise only) as basic Central Excise duty and a total sum of Rs. 3,43,208. 25 np. (Rupees three lakhs forty-three thousand two hundred eight and twenty five naye paise only) as additional duty had been provisionally debited in your account on the basis of the price lists supplied to us by you for the quarters. (i) beginning October, 1957 dated 17. 10. 57 (ii) beginning January 1958 dated nil, (iii) beginning April 1958 dated 14. 4. 58, (iv) beginning July 1958 dated 14. 7. 58, and (v) beginning October 1958 dated nil, 8. WE now propose to complete the assessments for the said periods from the evidence in our possession from which it appears:- (i) that there is no wholesale market for the goods covered by your price lists in or near the factory or the place of manufacture and that the nearest wholesale market for the same is the Calcutta market: (ii) the whole-sale cash price of the articles in question at the time of sale and or removal of the goods at the Calcutta market at which goods of like kind or quality are sold or are capable of being sold have been ascertained by us and the evidence at our disposal reveals that the prices quoted by you in your price lists are not correct. The prices are as per chart annexed hereto which has been prepared on the basis of available evidence in terms of section 4 (a)of the Central Excise and Salt Act, 1944. The prices are as per chart annexed hereto which has been prepared on the basis of available evidence in terms of section 4 (a)of the Central Excise and Salt Act, 1944. The vouchers mentioned in the chart are available for your inspection at any time next week during office hours. After obtaining inspection of the vouchers please attend at our office at 5, clive Row, Calcutta on 2. 5. 60 at 10-30 a. m. for the purpose of discussing the points mentioned above. 9. WE are prepared to give you a personal hearing with regard to all the points indicated above. If you have any evidence in support of your contention you are at liberty to produce the same at the time of hearing. Thereafter please note that we propose to make the final assessment in accordance with law. Certain typographical errors in the statement accompanying the letter were corrected by a notice; dated May 4, 1960. The petitioner company objected to the notice, inter alia, on the ground that the duty chargeable on the clearance of cigarettes, made by the petitioner company, had been properly assessed and the current account maintained by the petitioner with the central Excise Authorities was adjusted and settled on the basis thereof. The assessments were not provisional assessments and cannot be reopened. 10. ON May 14, 1960, the petitioner company, through a counsel, appeared before the respondent and challenged his jurisdiction to proceed on the basis of the notices, dated April 24 and May 4, 1960. The respondent, however, declined to indicate the provisions of law, under which he intended to proceed. On the allegation that the two purported notices were illegal, ultra vires and contrary to the provisions of law, the petitioner company called upon the respondent to desist from proceeding on the basis of the two notices and failing to induce him so to do, the petitioner company moved this Court, under Article 226 of the Constitution, praying for a writ of prohibition directing the respondent not to proceed with the assessment on the basis of the two notices and for a writ of mandamus directing him to cancel the two notices and obtained this Rule. The learned Advocate-General, who appeared for the petitioner company, very strenuously urged that the original assessments of duty were not provisional assessments but final assessments and that the law did not provide for finalisation of such assessments and that also so long after the period of three months from the date of such original assessments. Developing his argument, the learned Advocate-General invited my attention to Sections 3 and 4 of the Central Excises and Salt Act which read as follows: "3. DUTIES SPECIFIED IN The FIRST SCHEDULE TO BE LEVIED. (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule. (1a) The provisions of subsection (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, the Government of a Part A State or a Part B State and used for the purposes of a trade or business of any kind carried on by, or on behalf of that Government or of any operations connected with such trade or business as they apply in respect of goods which are not produced or manufactured by any Government; (2) The Central Government may, by notification in the official gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force; (3) Different tariff values may be fixed for different classes or descriptions of the same article. " 11. DETERMINATION OF VALUE FOR THE PURPOSES OF DUTY. " 11. DETERMINATION OF VALUE FOR THE PURPOSES OF DUTY. Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value be deemed to be (a)the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or (b)where such price is not ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery al the place of manufacture or production, or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto. Explanation in determining the price of any article under this section no abatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid he also contended that the word "prescribed" in section 3 meant prescribed by Rules made under the Act [wide s. 2 (g)], that is to say, Rules framed under s. 37 of the Act, the material portion of which reads as follows: "section 37 (1) The Central Government may make rules to carry into effect the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may (i) provide for the assessment and collection of duties of excise, the authorities by whom the functions under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duty shall be payable, and the recovery of duty not paid". 12. 12. TURNING to the Rules prescribed for assessment and collection of duties, he invited my attention to rules 2 (v), 7, 9, 10, 10a and 52, which I set out below:2 (v)"duty" means the duty payable under section 3 of the act; 7 Recovery of Duty. Every person who produces, cures or manufactures any excisable goods, or who stores such goods in a ware house, shall pay the duty or duties leviable on such goods, at such time and place and to such person as may be designated in, or under the authority of these Rules, whether the payment of such duty or duties is secured by bond or otherwise." "9. Time and manner of payment of duty:- (1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export, or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require, and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form: provided that such goods may be deposited without payment of duty in a store-room or other place or storage approved by the collector under rule 27 or rule 47 or in. a warehouse appointed or licensed under rule 140 or may be exported under bond as provided in rule 13: provided further that the Collector may, if he thinks fit instead of requiring payment of duty in respect of each separate consignment of goods removed from the place or premises specified in this behalf or from a store-room or warehouse duly approved., appointed or licensed by him, keep with any person dealing in such goods an account-current of the duties payable thereon and such account shall be settled at intervals not exceeding one month, and the account-holder shall periodically make deposit therein sufficient in the opinion of the Collector to cover the duty due on the goods intended to be removed from the place of production, curing, manufacture or storage. (2) If any excisable goods are, in contravention of sub-rule (1) deposited in or removed from, any place specified therein, the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand made by the proper officer, whether such demand is delivered personally to him, or is left at his dwelling house, and shall also be liable to a penalty which may extend to two thousand rupees, and such goods shall be liable to confiscation." "10. Recovery of duties or charges short-levied or erroneously refunded. When duties or charges have been short-levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through misstatement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or repay the amount paid to him in excess, as the case may be, on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owner account-current, if any, or from the date of making the refund." "10a. Residuary powers for recovery of sums due to Government where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short-levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper offices," be paid to such person and at such time and place as the proper officer may specify." "52. Clearance on payment of duty. Clearance on payment of duty. When the manufacturer desires to remove goods on payment of duty, either from the place or premises specified under rule 9, or from a storeroom or other place of storage approved by the Collector under rule 47, he shall make application in triplicate (unless otherwise by rule or order required)to the proper officer in the proper form and shall deliver it to the officer at least twelve hour (or such other period as may be elsewhere prescribed or as the collector may in any particular case require or allow) before it is intended to remove the goods. The officer shall, thereupon assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury, or paid to the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been dispatched to the Treasury by money order, shall allow the goods to be cleared." Explaining the scope of Rules 10 and 10a, the learned Advocate-General contended that Rule 10 would be attracted if there had been a levy in the first instance and the short-levy or erroneous refund was due to any of the causes mentioned in the Rule, namely, inadvertence, error, collusion or misconstruction on the part of the officer of misstatement as to the quantity, description, or value of the goods on the part of the owner. In all such leases, the demand must be made within three months from the date on which the duty or charge was paid or adjusted in the owner's account current, if any, or from the date of making the refund. Rule 10a, he contended, would be attracted only when there was no other rule, making specific provision for the collection of duty or of any differential duty, if the duty was for any reason short-levied. Rules 10 and 10a, be further contended, were mutually exclusive, that is to say, if a claim fell within Rule 10, then Rule 10a would be out of the way. 13. THE learned Advocate-General also contended that Rules 10 and 10a would not apply to cases to which sub-rule (2) of Rule 9, applied. Rules 10 and 10a, be further contended, were mutually exclusive, that is to say, if a claim fell within Rule 10, then Rule 10a would be out of the way. 13. THE learned Advocate-General also contended that Rules 10 and 10a would not apply to cases to which sub-rule (2) of Rule 9, applied. In other words, under sub-rule (1) of Rule 9, payment of duty must be made at the time of removal of excisable goods, for consumption, export or manufacture from the place where they are manufactured or from any place specified by the Collector ; but under sub-rule (2) of Rule 9 if any excisable goods are, in contravention of sub-rule (1) deposited or removed from any specified place, the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand by the proper officer. When sub-rule (2) of Rule 9 comes into play, Rules 10 and 10a must not be invoked. 14. ON the basis of the above legal provisions, the learned Advocate-General contended' in the first place, that the cigarettes of the petitioner company used to be stored in the factory or in the approved go-downs and were cleared on payment of the assessed duty. Assuming for the sake of argument, that such duty was short-levied, which, of course, he did not admit, the recovery could be made only within three months of the levy of the duty on the several dates, in 1957 and 1958 and the notice issued in 1960 was clearly barred by time. He contended, in the next place, that the impugned notices did not proceed on the basis of short levy of excise duty. The notices alleged that there was a provisional debit of excise duty on the basis of price list supplied by the petitioner company and that the authorities wanted to complete the assessment. The learned Advocate General contended that there was no provision for provisional debit of duty in the Act and that the duty had been realised by adjustment in the current account of the petitioner, on the basis of an assessment then made, and such an assessment must not be reopened on the plea of completing the assessment. The learned Advocate-General lastly invited my attention to Rule 10b, which was incorporated in the Central Excise Rules on October 19, 1957 and was deleted on August 1, 1959. The learned Advocate-General lastly invited my attention to Rule 10b, which was incorporated in the Central Excise Rules on October 19, 1957 and was deleted on August 1, 1959. The said Rule read as follows: "10-B. Provisional assessment of duty:- (1) Notwithstanding anything contained in these rules – (a) Where the owner of any excisable goods makes and subscribes a declaration before the proper officer to the effect that he is unable for want of full information, to state precisely the real value or description of such goods in the proper Form ; or (b) Where the owner of any goods has furnished full information in regard to the real value or description of the goods, but the proper Officer requires further proof in respect thereof ; or (c) Where the proper Officer deems it expedient to subject any excisable goods to any chemical or other test, the proper Officer may direct that the duty leviable on such goods may, pending the production of such information or proof, or pending the completion of any such test, be assessed provisionally. (2) When the owner of any goods in respect of which the duty has been assessed provisionally under sub-rule (1) has paid such duty, the proper Officer may make an order allowing the goods to be cleared for home consumption or for exportation, as the case may be, and such order shall be sufficient authority for the removal of the goods by the owner ; provided that before making any such order the proper officer shall require the owner to furnish a bond in the proper form binding the owner to pay the differential duty when the final assessment is made. (3) When the duty leviable on such goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of, or is in excess of, the duty finally assessed, the owner of the goods shall pay the deficiency or be entitled to a refund, as the case may be." After the deletion of Rule 10b, a new Rule was incorporated in the Central Excise Rules, namely Rule 9b, on August 1, 1959 which Rule reads as follows: "9b. Provisional assessment to duty- (1) Notwithstanding anything contained in these rules, a manufacturer, curer or owner of goods warehoused may, in cases where assessment of goods involves two or more alternative basis, request the proper officer to assess the goods provisionally at lower or the lowest of the rates of duty applicable- (a) pending furnishing by such manufacture, curer or owner of complete information as regards the value, description or quality of the goods, or if such information has already been furnished, pending supply of proof therefore, or (b) pending completion of any chemical or other test to which the goods may be subjected by such officer, and such officer may, at his discretion, direct that duty on such goods may be provisionally assessed and prescribe the time limit within which the complete information, or proof of the information already furnished shall be supplied by such manufacturer, curer or owner in respect of the goods so assessed. (2) Such manufacturer, curer or owner shall execute a bond in the proper Form, with such surety or sufficient security, in such amount, or under such conditions as the Collector approves, binding himself for payment of the difference between the amount of duty as provisionally assessed and that as finally assessed on receipt of such complete information or proof therefore, or of results of chemical or other tests made in respect thereof. (3) The Collector may permit the manufacturer, curer or owner of warehoused goods to enter into a general bond in the proper Form with such surety or sufficient security in such amount or under such conditions as the Collector approves for assessment of any goods provisionally from time to time : provided that, in the event of death, insolvency or insufficiency of the surety, or where the amount of the bond is inadequate, the Collector may, in his discretion, demand a fresh bond, and may, if the security furnished for a bond is not adequate, demand additional security. (4) The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are not so assessed. (4) The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are not so assessed. (5) When the duty leviable on the goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of, or is in excess of, the duly finally assessed, the manufacturer, curer or owner of the goods, shall pay the deficiency or be entitled to a refund, as the case may be. " He contended that the earlier assessment had not been made widen Rule 10b and, therefore, the said rule was of irrelevant consideration. He also contended that Rule 9b was not in existence at the material time and need not be considered. On behalf of the respondent, strong reliance was placed on paragraphs 7 and 10 of the affidavit in opposition, the material portions of which read as follows: "7 I say that respecting the removal and/or clearance of cigarettes from the petitioner's factory it was always the practice to make provisional assessment of the prices declared by the petitioner and provisionally approved by the Central Excise Authorities subject to final approval of the wholesale cash price so that day to day clearance might not be held up. Such practice was followed for facilitating day to day transactions to the mutual benefit and interest of the petitioner and the Central Excise Authorities. The duties were assessed A. R. 1-wise during all material times on the basis of the prices provisionally approved and payments were intended to be and accepted as provisional payments. Such payments cannot be treated and were not in fact final payments on final assessment. As a rule, a provisional sanction was given on the basis of the price list, and the Excise duty, collected provisionally on that basis, and later on the difference between provisional assessment and final assessment when made was realised in accordance with law. The settlement of accounts made from time to time was for the purpose of correctly maintaining the said account and ascertaining the arithmetical accuracy and also for finding out the balance in the said account." "10. The settlement of accounts made from time to time was for the purpose of correctly maintaining the said account and ascertaining the arithmetical accuracy and also for finding out the balance in the said account." "10. With reference to paragraph 9 of the petition I say that the payments made by the petitioner as stated therein were in the nature of provisional payments made on provisional assessment according to the practice as set out in paragraph 7 hereof. I deny that there was any question of or any necessity for reopening of the said account as alleged or at all. Excise duty was collected provisionally on the basis of the provisional sanction of the price list and later on differential duties were sought to be realised in accordance with law. The said account current was maintained in accordance with rule 9 of the Central Excise Rules which is meant to be a provisional arrangement for the purpose of facilitating day to day work so that daily clearance might not be held up. The sums of Rs. 1,67,072. 40 np. and Rs. 76,574. 85 np. were demanded since on final assessment they were found due and owing by the petitioner over and above the sums provisionally paid. " 15. ON the basis of the aforesaid paragraphs, it was contended that since the assessment was to be made on the basis of the price at which the cigarettes were capable of being sold in the wholesale market and since the price-list supplied by the petitioner company required verification on the basis of the wholesale market price, clearance of cigarettes could be allowed on the basis of provisional assessment only, until verification of the price-list was actually made and it was on that basis only that the earlier realisation of duty were made. As such, nothing prevented the respondent from making a final assessment on the basis of the two impugned notices and that no question of limitation under Rule 10 arose in the facts and circumstances of the case. 16. IN my opinion, there is considerable infirmity in this stand taken on behalf of the respondent. Assuming for the sake of argument that the Central Excise Authorities could proceed on to basis of Rule 10b in assessing the petitioners, the question for my consideration is whether they did so. 16. IN my opinion, there is considerable infirmity in this stand taken on behalf of the respondent. Assuming for the sake of argument that the Central Excise Authorities could proceed on to basis of Rule 10b in assessing the petitioners, the question for my consideration is whether they did so. Nothing was produced before me to show that the proper office, being in need of further proof as to the correctness of the price list as in Rule 10b (b)], directed that the duty leviable on the goods be assessed provisionally, pending the production further proof, as in Rule 10b (c)]. Also there is nothing to show that the proper officer required the petitioner to furnish a bond in the proper form binding the petitioner to pay differential duty, when the final assessment would be made (as in the proviso to Rule 10b (2)]. Lastly, there is nothing to show that the present proceedings were taken under the provisions of Rule 10b (3) for under Rule 9b (5) the provisions of which succeeded Rule 10b (3)]. To have a power is one thing. To exercise the power is an other thing. I am not convinced that the respondent or the Central Excise Authorities exercised his or their power of provisional assessment at the time when the duties were first realised. If the story of provisional assessment be out of the way, then the present claim is one of short levy of duty. The respondent's claim is clearly barred under Rule 10, because the same has mot been made within three months of the first assessment of the duty. For the reasons aforesaid, this Rule must be made absolute. Let a Writ of Prohibition issue directing the respondent not to proceed on the basis of the impugned notices and let a Writ of Mandamus issue directing them to cancel the notices. There will be no order as to costs.