NILSIN COMPANY Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) The petitioner-firm, since the year 1965, had been manufacturing "ultramarine blue" at its factory at 59, Grand Trunk Road, Liluah, District Howrah. The petitioner-firm had taken out requisite licence for manufacturing excisable goods and had also executed necessary bond under the Central Excise Rules, inter alia, undertaking to produce for charge of duty all excisable goods manufactured in its factory, to maintain accounts and to pay excise duty leviable thereon, etc. Both the petitioner and the Central excise authorities, until the time mentioned hereinafter, had acted on the basis that ultramarine blue manufactured by the petitioner was included within Item No. 141(5) of the First Schedule to the Central Excises and Salt Act, 1944. The petitioner was being assessed under Section 3 of the Central Excises and Salt Act, 1944, in respect of ultramarine blue according to the rate of duty mentioned against the goods specified in Item No. 141(5) of the First Schedule to the said Act.

(2.) On 20th August, 1971, a learned Judge of the City Civil Court, Ahmedabad, had decreed a civil suit brought by M/s. C.M.C. India, inter alia, for declaring that the product ultramarine blue manufactured by the said plaintiff was not a pigment to common people, businessmen and consumers, and, therefore, the plaintiff's said product was' not excisable under Item No. 141(5) of the First Schedule to the Central Excises and Salt Act, 1944. The learned Civil Judge also granted consequential relief by way of permanent injunction against the Union of India and others defendants of the suit. We understand that the High Court at Gujarat had subsequently dismissed the appeal preferred by the Union of India and others against the said decision of the learned Civil Judge, City Civil Court, Ahmedabad. The said High Court also reversed the decision of the trial court in another suit for similar reliefs brought by Jaynal Tarachand and others and decreed the suit. The learned Judges of the Gujarat High Court by the same judgment allowed a writ petition filed by M/s. Nilsin Industries and another and directed the Union of India to refund the excise duty levied for a period of three years prior to the filing of the writ petition upon the petitioner's product ultramarine blue. It is stated that the above matters are now pending before the Supreme Court.

(3.) The petitioner by a letter dated 3/10th November, 1971, requested the Collector of Central Excise, Calcutta, to adjudicate the question as to whether the product ultramarine blue manufactured by the petitioner was liable to levy of excise duty under Item No. 141(5) of the First Schedule to the Central Excises and Salt Act, 1944, and the petitioner also prayed for refund of the excise duty already collected from it. The petitioner had drawn the attention of the Collector of Central Excise, Calcutta, to the judgment dated 20th August, 1971, of the learned Judge, City Civil Court, Ahmedabad, mentioned hereinbefore. A Dy. Collector of Central Excise, Calcutta, by his reply dated 3/10th November, 1971, had informed the' petitioner that so far as the Collectorate at Calcutta was concerned, ultramarine blue had been held to be assessable to Central Excise duty under Item No. 14 of the First Schedule to the Central Excises and Salt Act, 1944. According to the Deputy Collector, the question of granting refund of the duty paid did not arise, and the petitioner was also asked to follow the remedy by way of appeal provided in Section 25 of the Central Excises and Salt Act, 1944. After making further futile demands, the petitioner moved this Court and obtained the present rule, inter alia, for commanding the respondents not to levy and collect Central excise duty in respect of ultramarine blue manufactured by it and also for refunding excise duty already collected in respect of the said product manufactured by the petitioner.