CAMLIN PRIVATE LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition filed under Article 226 of the Constitution of India, the petitioners, who are manufacturing water proof drawing inks, have challenged the order passed by the Assistant Collector of Central Excise, respondent No. 2, holding that water proof drawing inks manufactured and cleared by the petitioners are correctly classifiable under the Tariff Item 14-I(5) of the Central Excise Tariff and excise duty has been correctly paid by the petitioners under the said Tariff item. The petitioners have further challenged the latter part of the order passed by respondent No. 2 rejecting their refund claim of Rs. 77,434.43 P. filed by the petitioners in respect of the duty paid by them on their drawing inks under Tariff Item 14-I(5) for the period from 11-2-1966 to 2-2-1974.

(2.) In order to appreciate the contentions raised by the learned counsel Shri R.J. Joshi on behalf of the petitioners in this petition, few facts which lie within a narrow compass need to be referred to. The petitioners are a company incorporated under the provisions of the Companies Act 1 of 1956 and carrying on business inter alia of manufacturing water proof drawing inks. These inks are admittedly used for drawing black or colour drawings. On March 26th 1965 the Inspector of Central Excise in charge of Borosil Glass Works Ltd., Mondivita, Andheri, Bombay-59 drew samples of fountain pen ink, writing ink, rubber stamp pad ink and water proof drawing ink etc. at the petitioners' factory and sent them to the Chemical Examiner, New Customs House, Bombay for testing. According to the petitioners, after taking these samples, there was no further intimation from the Inspector. However, all of a sudden by a letter dated 5th February, 1966 the petitioners were informed that the Central Board of Excise and Customs had decided that water proof drawing ink is chargeable to duty under Item 14-I(5) of the Central Excise Tariff. The petitioners were requested to declare the stock of water proof drawing ink lying with them and the petitioners were further intimated that clearance of the said ink would be allowed only on payment of duty. It was further intimated to the petitioners that the petitioners should declare the figures of the said ink cleared by them on and after 15th January, 1966 for the purpose of recovery of duty from the said date, i.e. the date on which the Central Board of Excise and Customs passed the order, i.e. 15th January, 1966. [Para Nos. are as given in the judgment]

(3.) By their letter dated 7th February, 1966 the petitioners informed the Inspector that the said decision of the Central Board of Excise and Customs was not acceptable to them and requested him to communicate to them the test report on the samples of water proof drawing ink drawn by him from their factory on 26th March, 1965. The petitioners also communicated to the Inspector that they would clear the water proof drawing ink from their factory on payment of duty under protest. It was further stated in the said letter that the petitioners had cleared 226.00 litres of the water proof drawing ink only from 15-1-1966 onwards.