PARLE BEVERAGES P LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners are a company incorporated under the companies Act and carry on business as bottlers of soft drinks and have a factory situated at Chakala, Andheri (East), Bombay. The petitioners for several years have been carrying on business of bottling soft drink such as Gold Spot, Limca, Rimzim etc., which are marketed under the registered trade mark of a concern known as Parle (Exports) Pvt. Ltd. The petitioners have entered into an agreement known as Franchise Agreement with the Parle (Exports) Pvt. Ltd. on July 25, 1977 and on March 7, 1978. Under the said Franchise Agreement the petitioners from time to time buy the essence supplied by the Parle (Exports) Pvt. Ltd. and utilise the same in the manufacture of soft drinks. The petitioners have installed an elaborate bottling plant in the factory at investment of about Rs. 95 lacs, all of which have been contributed from the assets of the petitioners. The petitioners purchase in addition to the essence numerous articles such as bottles, crown corks, sugar, citric acid etc., from the market. Parle (Exports) Pvt. Ltd. have no control over the mode or manner of manufacture of soft drink save and except to ensure the quality of product. Parle (Exports) Pvt. Ltd. have no control over the procurement of other raw materials save and except the right to inspect the quality to ensure that the soft drinks are in accordance with the quality standard. The premises in which the petitioners manufacture soft drink are in exclusive control of the petitioners and the Parle (Exports) Pvt. Ltd. have no control in the engagement, supervision or employment of the labour. Parle (Exports) have entered into similar Franchise Agreements with large number of parties such as Gujarat Bottling Co., Surat Bottling Co., Poona Bottling Co. etc.

(2.) Aerated water, including the aerated water or the soft drinks, manufactured by the petitioners are assessable to Central Excise duty under the provisions of the Central Excise and Salt Act, 1944 (hereinafter referred to as the Act). Item 1D provides for the duty to be paid on the manufacture of soft drink. The Central Government in exercise of the powers conferred by Sub-rule (1) of Rule 8 of Central Excise Rules published a Notification dated July 4, 1977 exempting certain categories of aerated waters from so much of the excise duty leviable thereon as was in excess of 25% provided that such exemption would only apply to the first clearance for home consumption not exceeding 37 lac bottles by or on behalf of a manufacturer from one or more factories during any financial year 1976-77 and 50 lac bottles in any financial year subsequent to 1976-77.

(3.) In pursuance of the Notification, the petitioners filed their price list claiming exemption on the first 37 lack bottles cleared by them during the financial year 1976-77. The price list was filed on July 13, 1977. The price list was not approved by the Superintendent of Central Excise and the petitioners paid full duty in respect of first 37 lac bottles and thereafter filed a claim for refund of Rs. 4,79,915.36 on September 23, 1977. The said refund application is still pending before the Superintendent of Central Excise.