The rule-making power conferred on the Central Government by Sec. 37(2)(i) of the Central Excises and Salt Act, 1944 was not excessive and that the rules framed thereunder were not unreasonable restrictions on freedom of trade. However, the Central Government's refusal to give a personal hearing to the petitioner in respect of the revision application was a denial of natural justice.

Narasimham, J.

1. This is an application under Article 226 of the Constitution to quash the orders of the Superintendent of Central Excise, Ranchi, (Annexures I and II), dated the 13th March, 1961, and 17th March, 1961, directing the petitioner to pay the full excise duty on 1186 radio sets before removing them from the factory. The petitioner appealed against the said orders of the Superintendent of Excise to the Collector of Central Excise, Patna, who by his order dated the 30th June, (Annexure II-A) 1961, rejected the appeal. The (petitioner then moved the Central Government in revision and specially requested the Government by its letter dated the 22nd August, 1961, to give it an opportunity of being heard before disposing of the revision petition (Annexure V). The Central Government, however, by their letter dated the 27th September, 1961 (Annexure VI) informed the petitioner that they did not consider it necessary to grant a personal hearing at the revision stage and further intimated that if the petitioner had any further submissions to make they may be sent in writing. Thereafter, on the 21st December, 1961 (Annexure III), the Central Government rejected the revision application.

2. By the Finance Act, 1961 , the following new item, item 33A, was inserted in the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act").

"Item No.Description of goods.Rate of duty. 33AWireless Receiving Sets, all sorts including Transistor Sets and Radiograms, with or without loud speaker.20 per cent ad valorem."

Though the Finance Act came into effect only from the 1st April, 1961, in respect of several items, nevertheless by virtue of the declaration under the Provisional Collection of Taxes Act, 1931, made in the Bill itself, the aforesaid insertion of item 33A in Schedule I of the Act came into effect from the midnight of the 28th February--1st March, 1961. Hence excise duly at the rate mentioned above would be payable in respect of wireless sets whose manufacture was completed after the said date; but if the sets had been fully manufactured prior to that date, the said duty will not be payable. The petitioners contention was that these sets were fully manufactured prior to 1st March, 1961, and that, consequently, no duty was payable. But its factory was inspected by an officer of the Central Excise Department on the 9th March, 1961, and that officer reported that 1186 radio sets were lying in the godown of the Radio Assembly Shop of the factory in a dismantled condition. The wired chassis wherein some of the wires were still to be soldered were stored separately and the cabinets in which the sets were to be fitted were also kept separately. The wireless valves and the magic eye and the wires leading to the speaker were also not fitted to the sets. Hence the Superintendent of Excise held that the manufacture of the said wireless sets were not completed prior to the 1st March, 1961, and that consequently excise duty was payable by virtue of the said amendment to the Schedule of the Act. The contention of the petitioner was that in the commercial sense the manufacture of the wireless sets had been completed prior to the 1st March, 1961, and that, consequently, no duty was payable. This contention was, however, overruled by all the officers of the Central Excise Department, including the Central Government exercising their powers of revision.

3. Several constitutional questions, including the vires of the Central Excise Rules (hereinafter referred to as "the rules") made under the Act, have been raised by Mr. Lal Narain Sinha on behalf of the petitioner. To appreciate these points it is necessary to refer to the relevant provisions of the Act and the rules made thereunder. The Act was made in 1944 for the purpose of consolidating and amending the law relating to central duties of excise on goods manufactured or produced in India. Sec.3, which is the charging section, says that the duty shall