AMAR DYE CHEMICAL LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition was filed on November 11, 1963 under Articles 226 and 227 of the Constitution to set aside the order dated August 22, 1963 passed in revision by the Central Government refusing to interfere with the order of the Excise Authorities rejecting the claim of Amar Dye Chem. Limited, the first petitioners (hereinafter referred to as "the petitioners") for the refund of Rs. 1,31,550.80 paid by them as excise duty under protest in respect of 47068.5 kgs. of dyes prepared in their factory, and raises the question whether the said dyes were 'manufactured' before the night of 28th February/1st March, 1961 so as to be excisable under the Finance Bill of 1961.

(2.) By its judgement and order dated January 18, 1965 the Division Bench (Chainani, C.J. and Gokhale, J.) allowed the petition in part and ordered refund of excise duty to the extent of Rs. 47,747.02 ps. levied on 15,109.6 kgs. but rejected the petitioners' claim for refund of the balance of excise duty of Rs. 90,803.78. Against the said order rejecting their claim the petitioners filed an appeal, being Civil Appeal No. 1218 of 1967, to the Supreme Court after obtaining a certificate under Article 133(1)(a) and (b). By its judgement and order dated December 8, 1972, the Supreme Court remanded the matter to rehear and dispose of the same after enabling both the parties to produce evidence on disputed questions.

(3.) The facts leading to the filing of the petition are fully set out in the judgment of the Division Bench. The petitioners are manufacturers of dyes derived from coal tar and coal tar derivatives and have their factory at Shahad, near Kalyan, Thana District since 1956. Prior to 1st March, 1961 the dyes so manufactured were not subject to central excise duty. By the Finance Bill of 1961 such dyes were inserted in First Schedule to the Central Excises and Salt Act as Item 14-D and the Provisional Collection of Taxes Act, 1931, was made applicable with the result that the said dyes manufactured after the midnight of 28th February, 1961 became liable to pay ad valorem excise duty of 15 percent. On 1st March, 1961, the petitioners were having in their plant at their factory 47068.50 kgs. of 8 different kinds of dyes as follows :-