Asia Tobacco Company Ltd. vs Assistant Collector of C. Ex.

The relief prayed for in his writ petition reads as follows : "". . . . . to call for the records relating to the directive bearing reference No. OC.

330/86 dated 25-2-1986 issued by the second respondent herein and issue a writ of Certiorari or direction in the nature of a writ quashing the said

directive so far as it relates to classifying cigarette packets and or outer shells and inner slides under sub-heading No. 4318-13 of the Central

Excise Tariff Act, 1985.

A similar question arose before C. M. Natarajan, J. in W. P. Nos. 997, 1153 and 1154 of 1983 [1992 (58) E. L. T. 418 (Mad.)]. Learned

Judge after elaborately considering the issue and after referring to a number of judgments of the Supreme Court reported in Atul Glass Industries

(Pvt.) Ltd. Vs. Collector of Central Excise, held as follows :

According to the learned counsel, the said decision is in all fours applicable to the facts of this case. In view of the ratio laid down in the above

decision and in view of the fact that there is absolutely nothing to show that the shells and slides that would come to the carton and that packet or

packing container is only a packet of cigarette therein and it cannot be said that the said items are also liable for duty and are not entitled to

exemption as per Notification. It is not in dispute that prior to the introduction of Tariff Item 17(4) by the Finance Bill of 1982, the outer shells and

inner slides were classified under Tariff Item 68 and they were exempted from the whole of the duty. Even while considering the process of

packing of cigarettes, it is seen that the packet is completed only after cigarettes have been put in it. Cigarettes are put first in the bundling paper

and then placed in the slide. The slide along with the cigarettes is then inserted into the outer shell. The packet of cigarettes is thus completed at a

stage when cigarettes are already in it. It is not in dispute that at this stage of assembly, it is not only the packet which is assembled but a packet of

cigarettes containing cigarettes therein. Thus if this assembly is to be treated as manufacture, the manufacture is not of a packet but of a cigarette

packet containing cigarettes. Thus a cigarette packet cannot be subjected to duty twice over. Even otherwise it is submitted that the outer shells

and inner slides cannot be subjected to any separate assessment. Whatever it may be there is absolutely nothing to show that the outer shells are to

be called thus as packets and liable to Excise Duty. Hence, there is no difficulty in finding point No. in favour of the petitioner and against the

revenue.

Though in our case, the tariff item differs, the issue is identical. It cannot be denied that the ratio laid down in the said judgment of K. M.

Natarajan, J. on all fours is applicable to the issue raised in this writ petition. However, Mr. K. Jayachandran, learned Additional Central

Government Standing Counsel submits that writ appeals have been filed against the judg- ment of K. M. Natarajan, J. and the same are pending. It

is not in dispute that against the judgment in W. P. 997 etc. of 1983 [1992 (58) E. L. T. 418 (Mad. )] no stay has been obtained in the writ

appeals. Therefore, applying the ratio laid down in the abovesaid judgment, the impugned order is quashed. The writ petition is allowed. No costs.