PARRY CONFECTIONERY LIMITED MADRAS Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) THE petitioners are, among other things, manufacturers of confectionery items, in their factory situated at Nellikuppam, South Arcot Dt. , tamil Nadu. THEy held a Central Excise Licence for the manufacture of general confectionery items dutied under item 1-A of the First Schedule to the Central excise and Tariff Act, 1944 (hereinafter referred to as the'act'). In their application for central excise licence made under Rule 173 (b) of the Central excise Rules, they have mentioned'lozenges', as one of the items manufactured by the petitioners. THEse'lozenges'prepared by the petitioners were being assessed to the central excise duty as if they fall under item 1-A of the schedule to the Act. THE petitioners state that they have wrongly included in their application and were also paying mistakenly duty on Lozenges as if these lozenges are also covered under item 1-A (1) of the Schedules. When the mistake was detected, they filed a petition on 20-10-1973 to the Assistant Collector of central Excise, Pondicherry to delete lozenges from the list of excisable items mentioned in their application filed under rule 173 (b) of the Central Excise rules, and also prayed that they may be permitted not to pay central excise duty thereafter. THEy have further prayed that the duty collected in the past may also be refunded to them. In this petition, they have detailed the items that might come under item 1-A (1) and contended that Lozenges do not fall within the tariff description of any one of those various specified items mentioned in that entry. In support of their contention, the petitioners furnished the views expressed by certain standard books on confectionery and also the description and the specifications given for some of the items by the indian Standards Institution. By a one line order dated 8-1-1974, the Assistant collector held that'lozenges'manufactured by the petitioners will fall under the category of'candy'which is to be assessed as confectionery under tariff item 1-A (1 ). This was confirmed by the appellate and revisional authorities. It may also be mentioned that both the appellate and revisional authorities also did not give any reason for coming to this conclusion except to state that 'lozenges'is included in the word'candy'and is assessable to excise duty. It is against these orders, the petitioners have filed the present writ petitions praying for awrit of certiorarito quash the orders of the assessing authorities holding that'lozenges'are excisable under Item 1-A (1) and for amandamusdirecting the respondents to dispose of the refund application afresh on the basis that'lozenges'are not excisable goods.

(2.) IT may be mentioned at this stage that with effect from 1-3-1975, as stated by the learned Counsel for the petitioners, a residuary entry in 68 was introduced so that even if'lozenges'do not come under the description mentioned in item 1-A (1), it will be now excisable under entry 68 with effect from 1-3-1975. There appears to have been a further amendment sometime in 1978, by which item 1-A (1) itself was deleted but these do not concern us and therefore, we need not state anything more than to note the amendments.

(3.) IN INdian Standard INstitute's specifications relating to IS : 1668-1975, which product relates to lozenges, it is stated - "0. 2 Lozenges (as different from medicated lozenges or others with special claims) are confections mainly made out of pulverised sugar or icing sugar with certain binding materials and lubricants with the addition of suitable flavours and colours. Powdered spices or extracts of spices are also added in the preparation of some varieties of lozenges. These are generally made from cold mixing which means that no preliminary boiling or cooking of ingredients is required. These confections are produced either as cut goods from a sheet of dough and air-dried or they might be held under pressure so as to form a hard cohesive confection. The compressed lozenges are produced by cold mixing and wet granulation of slugging procedure. " * The petitioners had also obtained the views of the central Food Technological Research INstitute, Mysore, who in their letter dated 6-2-1974, have stated - "usually candy is defined as light and brilliant confection made by pulling sugar syrup, boiled to a thick consistency, lozenges are made of sugar, flavoured will essence and coloured to taste. Usually for the preparation of lozenges, finely pulverised sugar, glucose syrup and a binder such as gum tragacanth or liquid gelatin is worked up to a dough consistency without the aid of heat which is rolled flat and then stamped into separate lozenges by cutting. The only difference we see between candy and lozenges is application of heat. Also probably in the case of candy the ratio of sucrose to glucose may be higher than in lozenges. " As may be seen from the informations, specifications, descriptions and manufacturing process in relation to lozenges, no preliminary boiling or cooking of the ingredients is required in the manufacture of lozenges, whereas candies are made only with aid of heat and cooking is involved in the process. Even though the learned Counsel for the respondents is not in a position to deny that there is such a difference in the manufacture of candies and lozenges, he contended that this difference is of no consequence. It is in respect of this argument that the contention of the learned Counsel for the petitioners that for making every one of the commodities mentioned in item 1-A (1), cooking and boiling by use of heat are essential elements and the selection of the commodities among she confectionery items and listing it under item 1-A (1) is relevant. Toffees are defined in the INdian Standard INstitute's specifications IS: 1667-1971 as - "boiled sugar confectioneries made out of sugar, edible fat, water and other ingredients. . . . . . . . . " *