TIRUPATI WOOLLEN MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioner 1 is engaged in the manufacture of coarse/carpet woollen yarn. Petitioner 2 is one of the share-holders of petitioner 1. The petitioners have challenged the legality and validity of the action by the Central Excise Department by which it has charged excise duties in respect of the wool fibers by putting it in the category of Item No. 43 of the tariff of the Central Excise and Salt Act, 1944. The petitioners also challenged the legality and validity of expression of opinion by the Central Board of Excise and Customs to the effect that woollen fibre manufactured in Draft-o-matic machine are classifiable under Tarrif Item No. 43 of the Central Excise Tariff. The petitioners also felt aggrieved by the direction dated 5.7.1985 issued by the Inspector, Central Excise, Range I, Kundli, Sonepat, by which he has directed the petitioners to obtain a licence after paying duty as per Tariff Item No. 43 of the Central Excise Tariff. The contention of the petitioners is that they were manufacturing the Woollen yarn which was covered under Item 18-B(i). It is claimed that product was exempted from duty vide notification No. 224/79-CE, dated 13.7.1979. Despite that the Excise Department has taken the view that the product manufactured by the petitioners would fall under Item No. 43 mentioned above. On taking that view various show-cause notices, totalling 25 notices, as mentioned in Annexure P-2, have been issued by the Superintendent, Central Excise Duty, and the petitioners were called upon to show cause why the excite duty coupled with some penalty should not be imposed on them. It was further Staled that the petitioners were at liberty to lead evidence in support of their claim. It was farther stated that they would be heard in person. Failure to show cause within 30 days was stated to be an indication that the petitioners did not want to say anything before the adjudicating authorities and the case shall be posted for hearing and decided ex parte on the basis of evidence available. In response to these various show-cause notices, the petitioners have replied, out of which copies of two replies Annexure P-4 dated 11.7.1985 and another dated 5.8.1985 are attached with the petition. While the matter was thus pending for decision, the Inspector of Central Excise visited the manufacturing unit of the petitioners and in the visit book made the following endorsement: -

(2.) In the written statement filed by the Assistant Collector of Central Excise, Rohtak, it was contended that the petitioners are manufacturing "carded gilled woollen slivers. It was further contended that the product manufactured by the petitioners is a combination of various fibres into one by strengthening it to make out woollen slivers into uniform thickness. It was further contended that sample of the product manufactured by the petitioners had been subjected to the test by the Chemical Analyser, Central Excise New Delhi, by taking sample on 18.10.1979 and his opinion was that the woollen slivers manufactured by the petitioners are in the form of "carded slivers composed wholly of wool fibres containing a few foreign particles." It was further submitted that the Central Board of Excise has also expressed opinion that the woollen slivers manufactured in draft-o-matic machine were correctly classified under Tariff No. 43 of the Central Excise Tariff. It was submitted that the cases initiated by issuing show-cause notices to the petitioners are awaiting decision by the appropriate authorities of the department; and under these circumstances, it was premature for the petitioners to seek a remedy by filing the writ petition.

(3.) The counsel for the petitioners brought my attention to the various stages of manufacturing of the articles manufactured by the petitioners' factory. It was submitted that the manufacturing process thus does not produce the goods that would-be covered by Item No. 43. It was submitted that the Excise Officers have taken unreasonable view and have claimed to get support from the report of the Chemical Examiner, which states about kind of the product and on the letter issued by the Central Board of Excise and Customs. It was submitted that in response to the various show cause notices issued by the Excise Officers, the petitioners have given elaborate reply and during the pendency of the decision of it, the Excise Inspector should not have made an endorsement dated 5.7.1985, referred above, it was submitted that the petitioners are justified in resorting to the writ jurisdiction because the Excise officers entrusted with the job of adjudication of the duty would not take any different view from one expressed by the Central Board of Excise and, therefore,, it would be a futile exercise to direct the petitioners to the departmental remedies.