DARSHANLAL ANAND PRAKASH AND ANOTHER Vs. COLLECTOR OF CUSTOMS AND CENTRAL EXCISE, SHILLONG, ASSAM AND OTHERS

JUDGEMENT

(1.) This Rule is directed against classification of tea gardens into five Zones made by the Central Government by the Notifications issued under sub-item (1) of item (3) of the First Schedule to the Central Excises and Salt Act and Rule 96F of the Excise Rules, for the purpose of levying excise duty at varying rates on tea produced by the gardens according to the Zones to which they belong and in particular against placing the petitioner's tea estate in Zone V, that is to say, in a high excise duty Zone, for re-classification of tea gardens, for transfer of the petitioner's tea garden to Zone II, a lower excise duty Zone, for cancellation of the Notifications dated 28th Sept., 1958, 24th April 1962, for an order directing the respondents to refrain from levying Central excise duty on tea produced in the petitioner's tea estate at a rate higher than the rate payable in respect of gardens in Zone II and to refund all excise duties paid by the petitioners which is in excess of the sum payable on the basis of the rate payable in respect of gardens in Zone II, for cancellation of Rule 96F of the Central Excise Rules, and for other reliefs.

(2.) The petitioners carry on business as growers and manufacturers of tea. They own a tea estate known as Shokamato tea garden in the district of Darrang in Assam. It is necessary to state, for reasons which will appear later, that the said tea garden is not situate in Mangaldai subdivision of the said district. The tea grown in the said garden is mostly brought down to Calcutta for public auction, for home consumption as well as for export. Public auctions are held at Calcutta within the jurisdiction of this Court.

(3.) In the petition it is stated that the tea produced in the said garden is exigible to Central Excise Duty. The petitioners claim that they have all along deposited and still deposit nearly 90% of the Central Excise duty payable on their tea with the Reserve Bank of India, Calcutta, within the jurisdiction of this Court. In paragraph 5 of the petition it is stated that by Act No. 45 of 1958 (Tea Alteration in Duties of Customs and Excise Act 1958) amendments to the Indian Tariff Act, 1934 were effected. By the said Act the First Schedule to the Central Excises and Salt Act, 1944 was also amended by substituting the new item no. 14 in place of the old item. By the amendment tea was classified into two categories and/or varieties, viz. tea which included ail varieties of the product (excluding waste) except package tea and package tea. By notification No. 100CE dated Sept. 28, 1958, Rule 96F was introduced into the Central Excise Rules. Rule 96F reads as follows: "Fixation of areas for the purposes of excise duty. Having regard to the weighted average sale price in the internal and export auctions of tea in India, the Central Government may, by notification to the Official Gazette, from time to time group areas into Zones for the purpose of assessment of tea produced in such areas." The petitioners state that the tea is of different varieties and the prices fetched at the auctions held at Calcutta vary depending upon their qualities. The weighted average sale price fetched by their tea at such auction is arrived at by dividing the total sale proceeds by the total quantity of tea auctioned measured in kilogrammes. Prices of tea fluctuate and accordingly the weighted average sale price varies from time to time. The petitioners sell some tea locally. The price of such tea is lower than the price fetched at the auction. In paragraph 8 of the petition, it is stated that under Rule 96F it is incumbent on the Central Government to group areas into zones from time to time having regard to the weighted average sale prices obtained at the auctions.