M/S. THE FARM TEA ESTATES SYNDICATE, KOTAGIRI Vs. THE GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE AND INSURANCE, NEW DELHI AND ANOTHER

JUDGEMENT

(1.) The petitioner is a registered firm of partnership with four partners. The business of the partnership is manufacture and sale of tea. The admitted facts are these: The petitioner purchased green leaves to the extent of more than two -third of their manufactured tea from about 622 growers. But these purchases included purchases from two of the partners from their proprietary tea estates. The extent of purchases from these two partners to the total purchases was 3.63% and 3.66% respectively. If these purchases from the two individual partners were taken out of account, then the total purchases of green leaves would not amount to two -third of the total manufactured tea.

(2.) From the year 1963 -64 onwards, the petitioner claimed exemption from special excise duty on teas produced by them relying on Government of India, Ministry of Finance, notification dated 4th June 1967. As the question involved in this case depends on the interpretation of this notification, we may usefully not out the entire notification here below:

(3.) The claim of exemption was originally rejected by the Superintendent of Central Excise. The petitioner was not also successful before Assistant Collector of Central Excise, and Collector of Central Excise to whom he filed appeals later on. He was also not successful in a revision filed to the Government of India. All these authorities were of the view that a partner is not an outsider of the firm, and therefore, the purchase made by the firm from the individual partners should not be taken into account for the purpose of calculating the two -third of green leaves purchased by the Unit from outside sellers within the meaning of the notification. This writ petition has bees filed for the issue of a writ of certiorari to quash these orders.