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TMI Blog2011 (8) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... in" or "oleo pine resin". The leading case on which arguments were advanced by Senior Advocate Mr. Ajit Kumar Sinha for the petitioners and for the respondent by Mr. Shobhit Saharia, Advocate is M/s Dujodwala Resins and Terpenes Ltd. and another vs. State of Uttarakhand and others being Writ Petition (M/S) 446 of 2008. These arguments though would be applicable in the rest of the cases as well. 3. Many of the present petitioners such as the petitioner in Writ Petition No. 478 of 2008 as well as others had initially filed writ petitions before this Court challenging the demand notices issued to them under the Central Excise Act for recovery of excise duty on "resin". These writ petitions were dismissed by a Division Bench of this Court on 18.9.2006 with the following observations : "Thus, as per the definition of the manufacture process applied for collecting and storage of resin for auction, is a manufacture, therefore, we do not find any substance in the submission of the learned counsel for the petitioners that the demand notices issued to the petitioners, which are impugned in the writ petitions, can be said to be without jurisdiction. Therefore, we do not find any merit in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that an excise duty is liable to be given and unless and until the petitioners pay the excise duty to the Forest Department they will not be permitted to lift the resin. Hence the writ petition. 8. According to the petitioners no excise duty is liable to be put on resin and the demand of the same is unjustified and illegal. 9. Since excise duty is actually levied by the Central Excise Department, they have been made a party and they are now the principal opponent in the present matter being represented by Sri Shobhit Saharia, Advocate. 10. The only question for determination by this Court is whether excise duty is liable to be imposed on "resin" or "oleo pine resin" (these are two different nomenclatures referring to the same product, and therefore wherever "Resin" word is used it would be deemed to be a reference to oleo pine resin as well). 11. According to the petitioners no excise duty is liable to be levied on resin as there is no "manufacture" or "production" involved in resin and therefore it is not an excisable item. Learned Senior Counsel relied upon Item No. 84 of list I to the 7th Schedule of the Constitution of India which reads as under :- "84. Duties of excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners had initially also argued that even the Central Excise Department is not sure as to under what head of the first Schedule (to Central Excise Tariff Act, 1985), should the excise duty be levied. All the same, this argument was abandoned later as the counsel focused his argument on the aspect that the duty is not leviable for the reason that resin is neither produced nor manufactured. 16. Under the Central Excise Act, the words "manufacture" and "produce" have been used in juxtaposition to each other. The learned Senior Counsel for the petitioner Sri Ajit Kumar Sinha submitted that irrespective of whether we call a process "manufacture" or "production", for a product undergoing this process must come out as a "new product" before an excise duty can be levied on it. There is one case which is relied upon by both the petitioner as well as the respondents i.e. Commissioner of Income Tax, Orissa and Ors. Vs. N.C. Budharaja and Company and Ors. AIR 1993 SC 2529. Though the issue before the Apex Court in the said case was different and it pertains to elaboration of phrase "manufactured or produced articles" which occurs in Section 80-HH and Section 84 of the Income Tax Act and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow ash coking coal. The additional duty under the said provision was to be levied if an article is produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at the percentage of the value of the imported article. The question was answered by the Hon'ble Apex Court in negative. The Hon'ble Apex Court declined to accept the contention of the revenue department that "coal ash" goes through a process of "manufacture"; "In our view, this submission is also without any substance because washing of coal would not amount to production or manufacture of a new item. Section 4 of the Coal Act also provides that for the purpose of conservation of and for development of coal, the Central Government may require the agent or manager of all coal mines to take measures which may include washing of coal with a view to reducing the ash contents of the coal. Washing of coal or reducing the ash content of the coal was not considered by the Parliament as a manufacturing activity. Even if coal is washed and ash contents are reduced, Section 6 uses the ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their particular existence and setting. As it is so well said "words are not pebbles in alien juxtaposition". What is therefore important is the context where these words have been used. In the present context therefore these two words would mean "bringing a new product into existence". 23. The legislature while putting these words in the Legislation meant that excise duty is liable only if a new product has come into existence. This is what goes to the core of the whole meaning of excise duty. Consequently, since "resin" or "oleo pine resin" does not come out as a new product but remains the same resin when it comes out from the tree, no excise duty is liable to be levied on it. It may still be open in law to put any other duty on this product but not an excise duty. This being the considered view of this Court, it holds that no excise duty is liable to be put on "resin" or "oleo pine resin". 24. Therefore it is declared that the imposition of central excise duty on raw pine resin collected and sold by the Uttarakhand Forest Department to the processing units is arbitrary and illegal. Consequently the respondents are restrained from demanding central excise duty. 25. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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