NAGRATH PAINTS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) IN this petition under Article 226 of the Constitution, the petitioner has prayed for issue of a writ in the nature of certiorari for quashing the order of the Collector, Central Excise, dated 2 -5 -1970 (Annexure 'E' to the petition) and the order of the Central Government dated 29 -1 -1972 (Annexure 'F' to the petition) made in revision. The petitioner has also prayed for a direction to the Central Excise authorities not to include certain products manufactured by it (the petitioner) for computing the quantum of excisable goods for determining the slab for the purpose of applying the rate of Excise duty.

(2.) THE petitioner is a manufacturer of various types of paints and compounds. One of such products manufactured by it (the petitioner) is called 'Paint P.U.F. Marking Black and White'. The petitioner had paid Excise duty on this product but subsequently applied for refund of Excise duty. The Excise authorities granted such refund. Thereafter, the petitioner claimed refund of a further sum of Rs. 965.66 P. on the ground that the quantity of this product manufactured by it (the petitioner) had been wrongly included for determining the slab for the purpose of rates of Excise duty on other products manufactured by it during the year 1967 -68. But this claim for the refund of Rs. 965.66 P. was rejected by the Assistant Collector of Central Excise whose decision was affirmed in appeal by the Collector, Central Excise, Kanpur, and in revision by the Central Government.

(3.) ON the other hand, the case of the Central Excise authorities is briefly as follows: The product, P.U.F. Marking Black and White, is a species of paint coming within the ambit of Item No. 14 of the First Schedule to the Act. It is composed of Bitumen, Solvent, Pigment and Extenders and is not liquid stencilling ink. However, under Notification No. 168/65 -C.E., dated 16 -10 -1965, issued under Sub -rule (1) of Rule 8 of the Central Excise Rules, 1944, (hereinafter referred to as the Rules), the Central Government has exempted from Excise duty sealing compounds and sack printing inks (falling under Item No. 14 of the First Schedule to the Act) supplied to bona fide consumers subject to certain conditions specified in that Notification. In other words, this product comes within the ambit of the word 'Paints' occurring in Item No. 14 of the First Schedule to the Act, but has been exempt under Rule 8(1) of the Rules from Excise duty' subject to certain conditions specified in that notification. Excise duty on paints is levied on the basis of slab system of. rates. On the first 750 Metric Tonnes of paints manufactured by any person the rate of Excise duty is 50 paise per litre as basic duty plus a special duty of 20 per cent. The aggregate rate of duty is 60 paise per litre. If the production exceeds 750 Metric Tonnes per annum but does not exceed 3000 Metric Tonnes, the aggregate rate of duty is 78 paise per litre for the next slab above 750 Metric Tonnes. Though this product was exempted from Excise duty, the quantity of this product manufactured by a person has to be included in the aggregate quantity of paints manufactured by him for the purpose of determining the slab of rates of Excise duty applicable to paints manufactured by him.