TMI Blog1979 (1) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... er referred to as "MNPT" and Meta-Nitro-Para Anisidine, hereinafter referred to as "MNPA". Both these chemicals belong to what has been described as Arometic Amine groups and are utilised, according to the Petitioners, in the manufacture of pigment dystuff which in turn are used for the manufacture of paints and printing inks. There is agreement between the parties that MNPT is a synthetic organic derivative and is known in the trade as fast base used in the manufacture of pigments. There is however dispute between the parties about its use in the dyeing process. No reference will hereinafter be made to MNPA as in the proceedings leading to this Petition the Petitioners gave up their challenge to the levy of excise duty on that product. This Petition therefore has confined its challenge to the levy of excise duty under Item 14D of the First Schedule to the Act in respect of synthetic organic derivative of MNPT alone. 2. In the year 1968 the Petitioners were called upon the Excise Department of Poona to pay excise duty on the manufacture of MNPT at the rate mentioned against Item 14D in the First Schedule. The item as it stands in its applicability to the petitioners' product was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Central Excise of Poona was also produced before the revisional authority. That notice mentioned that the Board of Central Excise had been advised that Aniline oil was being used substantially by industries for purpose other than dyeing in textile industries. The notice further proceeds to point out that by reason of this the Board was of the view that Aniline Oil was a chemical agent falling outside the purview of Item 14D of the Central Excise. Reliance placed by the Petitioners on this notice, which is dated 7th of July 1972, was for the purpose of pointing out that the Excise Department itself had taken a view in respect of another synthetic organic derivative that if it were used mainly for purpose other than dyeing then it was not liable to excise duty under Item 14D. Some information relating to the production of MNPT was also placed before the revisional authority in the form of a table which disclosed that of the total production of MNPT in the country nearly 97.8% was used in the manufacture of Pigments. This table sought to buttress the claim of the Petitioners that MNPT, a synthetic organic derivative, if not used predominantly in the dyeing process was not liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is numbered as Order No. 894 of 1972 is the subject matter of challenge in this petition under Article 226 of the Constitution. It may be stated at this stage that the proceedings described so for related to the liability of the Petitioner to pay excise duty for the year ending 31st January, 1969. The Petitioners have mentioned in this petition that subsequent to the order which is the subject matter of the challenges they have from time to time up to 31st of December, 1972 paid duty as mentioned in Exh. D to the Petition. The total amount of duty paid on MNPT from 8th of August, 1968 to 31st of December, 1972 is mentioned to be Rs. 6,44,174.88. The reliefs claimed in this petition include the writ of mandamus for the refund of duty so paid as mentioned above. The prayer for setting aside the three orders mentioned above is naturally the main prayer. 4. Before the arguments in support of the petition are considered, it would be appropriate to dispose of preliminary objections which have been raised by the learned Counsel appearing for the respondents who are the Union of India and two officers of the Central Excise. The objection to the maintainability of the petition has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that an alternative remedy such as civil suit is more appropriate. It may be mentioned that this petition claiming among other things refund of excise duty which has already been paid is not intended to circumvent a law such as the law of limitation. The petitioners can always file a suit for the refund of duty paid under mistake of law which can only be established after the present petition is decided within three years from the date of the decision. If the law is laid down in this petition and if thereafter the Petitioners can file a suit there is no reason why a relief which can be given only on the basis of a law should be denied to the Petitioners and why they should be driven to file a separate suit. Rejecting all the preliminary objections raised on behalf of the Respondents we now proceed to consider this petition on merits. 5. Item 14D under which excise duty is sought to be levied by the Respondents has already been reproduced above. There is no dispute that MNPT, a product manufactured by the Petitioners, is a synthetic organic derivative. What is disputed by the Petitioners is their liability to pay excise duty. According to the petitioners, no excise duty is le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbon was used and was capable of being used in several other equipments, such as search lights, signalling, stage lighting etc. This fact, said the Supreme Court, could not detract from the classification to which the carbon arcs belonged. That is determined by their ordinary or commonly known purpose or use. 7. This reliance placed by Mr. Taraporewalla on the decision of the Supreme Court in Annapurna's case is, in our opinion, justified. If according to the petitioners the synthetic organic derivatives viz. MNPT is very rarely used in the dyeing process, it could not be the function of the Legislature to subject such a synthetic derivative along with other synthetic organic drivatives which may be used on a large scale in the dyeing process, to a duty under item 14D. In the context in which the word "used" is used, in appears to us that it necessarily means predominantly used of commonly used. If the ordinary or common purpose or use of MNPT is not the dyeing process, then it cannot be regarded as a synthetic organic derivative used in the dyeing process. The mention of the words "synthetic organic derivative used in any dying process" shows that the legislature did intend to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of the decision of the Supreme Court in Annapurna's case. We are therefore satisfied that the word "used" in Item 14D means substantially or commonly used and not used rarely or occasionally or capable of being used. 11. The question whether MNPT is substantially or commonly used in the dyeing process, is essentially a question of fact which cannot be decided in the absence of adequate evidence in that regard. The material in support of this contention of theirs was placed by the petitioners only before the revisional authority. It is proper that authorities lower than the revisional authority should consider this question in the light of proper evidence. With this view which we take we are inclined to remand the case to the appeal court below despite the fact that the details of total production given in the table annexed to this petition have not been in terms denied by the affidavit-in-reply to this petition. While it is true, as Mr. Sukhtankar complaints, that the Petitioner ought to have at the earliest opportunity placed adequate material before the Court of first instance or at the latest before the Court of appeal it also cannot be gainsaid that a taxing authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Division Bench of this Court (Madan J. sitting with Kantawala C.J. ), it was held that excise duty was payable only if the goods were removed from the premises in which they were manufactured. We however find from the facts of that case that the decision is wholly inapplicable to the present case because in that case there was no question of home consumption of the goods manufactured. In the decision of the single Judge, Tulzapurkar J. as he then was, in Misc. Petition No. 491 of 1964 decided on 30th of April, 1970 the provisions of Chapter VII-A were found to be inapplicable on the date on which the liability was to be considered. In our opinion, therefore, both these decisions do not cover the situation which has arisen in the present case. The Collector will therefore be free to consider the question afresh. 14. In the result, we partly allow this petition and make the rule absolute only in terms of clause (a). We remit the case to the Collector of Central Excise, Poona, who will (a) consider whether the product MNPT is commonly or normally used in the dyeing process and then decide its liability for tax, under Item 14D of the Schedule to the Central Excise Act in the lig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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