FOOD SPECIALITIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) PURELY a legal issue arises in the writ petition, whether partly skimmed milk powder is a separate marketable commodity as compared to skimmed milk powder and whether both the commodities are subject to levy of excise duty under Sub-heading 0401. 13 of Chapter 4 of the Central Excise Tariff. In case partly skimmed Milk powder is not leviable to Central excise, question regarding the jurisdiction of the respondents to levy central excise would be the next for determination.

(2.) THESE legal issue arise on the following facts : -Food Specialities Ltd, (hereinafter referred to as 'the petitioner'), is manufacturing a product known as "nestle Everyday Daily Whitener for tea and coffee" and on the packing the ingredients mentioned are partly skimmed milk and Suppose, and the analysis of the contents of milk fat are mentioned 19. 0 per cent. A copy of the label is Annexure P-1 to the petition. From 1. 3. 1983 to 28. 2. 1989, skimmed milk powder was exempted from excise duty. During that period excise duty was sought to be levied on the item in dispute and ultimately the petitioner succeeded that excise duty was not leviable. (See order Annexure P 7) Although the contention of the petitioner was that its product was partly skimmed milk and since even on skimmed milk no excise duty was leviable, the following observations were made in the conclusing part of the order :- "there is no distinction in the tariff itself between the completely and partly skimmed milk. " In spite of the aforesaid finding, the product in question was classified under sub-head 0401. 13. Since no excise duty was levied on the product in dispute, it was not necessary for the petitioner to go up further in appeal on the finding that the product in dispute was covered by sub-head 0401. 13.

(3.) WHEN with effect from 1. 3. 1989, skimmed milk powder was subjected to excise duty, by making amendment in the sub heading 0401. 13, the petitioner immediately filed classification list on 3. 3. 1989 saying that its product was covered by sub heading 0401. 19, the residuary clause under Chapter 4 of the Central Excise Tariff, and. it did not fall under Sub-heading 0401. 13. For this contention, detailed reasons were furnished by the petitioner. Since the product could not be taken out of the factory premises without payment of excise duty, the petitioner paid excise duty under protest and sought determination of the point raised by it. The respondents gave no decision on the matter and kept on collecting the excise duty on the basis of the earlier decision, Annexure P-7, and since the petitioner was being subjected to heavy excise duty, it approached this Court through civil writ petition under Article 226 of the Constitution of India to challenge the levy of excise duty and also claimed refund of the amount of excise duty already collected by the respondents on the product in question.