TMI Blog1985 (7) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... n, relevant portion of which reads as under:- "Malt.-Barely is screened and stepped (soaked in water tank). Then it is transferred to Germination Box for germination. From there, it is transferred to Drying Chambers for drying. After the process of drying is complete, the product is known as MALT. Malt Extract.-Malt is crushed and mixed with hot water. The wort (syrup) is concentrated in vaccum evaporator. The concentrate is MALT EXTRACT". 3. The two items manufactured by the petitioners fell within the purview of the Central Excise levy under Tariff Item No. 68 with effect from March 1, 1975. The Tariff Item at the relevant time read as under :- Item No. Tariff Description Rate of duty 68. All other goods, not elsewhere specified, manufactured in a factory but excluding- 1% ad valorem liquors for human alcohol all sorts including alcoholic (a) consumption ; drugs and opium, Indian hemp and other narcotic (b) narcotics; and 2(c) of the dutiable goods as defined in Section (c) Preparations (Excise Duties) Act, 1955, Medicinal and Toil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igher authorities for approval. In the meanwhile, the petitioners were asked to continue paying duty at 5% on "malt" cleared from the factory till the classification list was finally approved by the Competent Authority. The petitioners paid the duty under protest on "malt" cleared from the factory, while "malt extract" and "malt consumed in the factory" were cleared without payment of duty. With effect from March 1, 1979 the rate of excise duty on these products was enhanced from 5% to 8%. The Superintendent, Central Excise, Gurgaon asked the petitioners to pay duty not only on the "malt" cleared from the factory but also on "malt extract" at the enhanced rate. The petitioners protested and filed an appeal before the Appellate Collector on May 25, 1979 against the said decision of the Superintendent. The Superintendent, Central Excise, Gurgaon chose to finalise the Assessment Returns relating to the period from April 1978 to February 1979 by subjecting the clearances to the rate of excise duty at 5%, as then prevalent without waiting for the approval of the classification list earlier filed by the petitioners. The petitioners filed appeals before the "Appellate Collector of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to him, 'malt' and 'malt extract' could not be classified as food products/food preparations for the purpose of Notification No. 55/75, as amended. Petitioners submitted their representation in response to the said show cause notice. In the meanwhile Tariff Advice No. 23/79 was issued by the Government of India on July 9, 1979, which has been noticed earlier. The petitioners contend that apart from applying wrong principles of law and disregarding Rule 173B of the Central Excise Rules, the Assistant Collector based his impugned order dated October 7, 1980 on the ruling in Tariff Advice No. 23/79 dated July 9,1979. It is the petitioners, case that in the face of the said Tariff Advice no excise authority is free to uphold the contention of the petitioners that they are entitled to exemption for their products and are not liable to pay any excise duty at all on their products in view of the exemption Notification No. 55/75, as amended. 9. Since the petitioners challenge the Tariff Advice besides challenging the order of the Assistant Collector dated October 7, 1980, they have moved this Court for issue of a writ of certiorari or a writ of mandamus or any other writ, order or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Collector further goes on to depose in the affidavit, "as the issue of excisability of malt and malt extracts vis-a-vis the approval of the classification list effective from August 1, 1979 was still under consideration with the Assistant Collector, Central Excise, Rohtak, a Tariff Advice No. 23/79 circulated vide instruction No. 44/79-CE (14, NES) dated July 19, 1979, copy enclosed, reached in the meantime clearly confirming that malt and malt extract could neither be treated as food preparations falling under Serial No. 1 nor drugs/pharmaceuticals-Drug intermediates falling under Serial No. 19 respectively of the Schedule attached to exemption Notification No. 55/75, as amended." Reasserting that the Assistant Collector Central Excise, Rohtak having considered all the facts in the representation, till then filed, by the petitioners and "keeping in view of the various directions, guidelines, advices received from the board and circulated vide instructions referred to in the preceding paras, approved the classification list of petitioners' factory by changing nil rate of duty to 8% as per the provisions of Rule 173 B and approved copy sent direct to the petitioners' factory" ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Assistant Collector. In our opinion, however, the case before the Assistant Collector at this stage can only be regarded as an appeal from caesar to caesar. The Assistant Collector is bound by the Tariff Advice issued by the Government of India. Indeed, in the original impugned order he has relied on it. The respondents have also relied upon it. So long as the Tariff Advice No. 23/79 dated July 9, 1979 continues to be operative, petitioners can have little chance of success in a rehearing before the Assistant Collector. The Tariff Advice is also challenged by the petitioners. Therefore, we cannot hold that the petition is not maintainable. 17. We have already read the relevant part of Tariff Item No. 68 as well as Notification No 55/75 dated March 1, 1975 exempting certain products from levy of duty under Item 68 of Central Excise Tariff. What was exempted was all kinds of food products and food preparations including meat and meat products, dairy products, fruit and vegetable products, fish and sea foods, bakery products and grain mil/products (emphasis ours). By additing sub-item 19 all drugs, pharmaceuticals and drug intermediates were also exempted from payment of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed "Barley'. There can be no doubt that barley is the product for a milling industry. That it is so cannot be disputed at all. Indeed, it is a cereals. Mr. D.K. Kapur, learned Counsel for the respondents has urged that this is not. He relied upon Brooke Bond India Limited v. Union of India and others, 1980 E.L.T. 65. We do not see how this case helps the respondents at all. 21. What is exempted from duty by Item No. 1 of the Schedule to the exemption Notification No. 55/75-CE dated March 1, 1975, as amended is "all kinds of food products and food preparations". The definition then goes on to "include" items like meat and meat products, fish and sea foods and grain mill products. Now normally as human-beings we do not consume raw meat or raw fish or raw grain mill products. These are processed and then consumed as food. Nevertheless meat, vegetables, fish and cereals even in the raw form are food. It is rather a flimsy argument to say that though barley as such may be a grain mill product and fall both under the head food products or food preparations but processed barley will not be so. We have already read in extenso the process by which malt and malt extract is obtained. Barle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady recovered the same from their customers and refund of duty now could not be passed on to the customers resulting in the petitioners unjustly enriched. This argument was based on the observations of the Supreme Court in The Newabganj Sugar Mills Co. Ltd. and others v. The Union of India and others, A.I.R. 1976 S.C. 1152. We may read the observations of Krishna Iyer, J. in that case to understand in what circumstances and in what context this concept was evolved. His Lordship started the judgment thus : "We should have made short shrift of this batch of appeals on the brief but fatal ground that the appellants all sugar millers who had over-priced this essential consumer article and had failed in their challenge of the controlled price had no moral nor legal claim to keep the huge sums which the High Court had rightly directed them to disgorge. When the price of 'levy sugar' was pegged down by the State, these factory owners rushed to the Court impeaching the validity of the control and secured a stay of operation of the order. Under cover of the Court's stay order which was granted, on bank guarantee for the excess price being furnished to the Court, the appellants sold sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the bar of limitation. As far as the question of unjust enrichment is concerned, one would be inclined to act on that theory and in its discretion this court may refuse refund if there is undue delay or the mistake of fact or law has been discovered after long long time. In the present case, the petitioners protested to the payment of duty with effect from March 1, 1978. They approached this court in the first week of January 1981 afterthe passing of the order of the Assistant Collector dated October 7, 1980, inter alia, basing his decision on the Tariff Advice dated July 9, 1979. There was neither delay nor laches. The Supreme Court in the case usually relied upon evolved a procedure and made the observations relied upon in the circumstances set out in the paragraph that we have already extracted from the judgment of Krishna Iyer, J. The law otherwise to us is very clear. In M/s D. Cawasji and Co. etc. v. State of Mysore and another, 1978 E.L.T. (J 154) (S.C.)=A.I.R. 1975 8.C. 813, the Supreme Court held that where a suit lies to recover moneys paid under a mistake of law, a writ petition for refund of tax within the period of limitation prescribed i.e. within 3 years of the kn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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