Impact Containers Pvt. Ltd. vs M. R. Nadkarni, Supdt. of Central Excise and others

The petitioners manufacture collapsible aluminium tubes. They are also carrying on the process of capping of collapsible aluminium tubes within the company''s licensed factory premises.

In writ petition No. 1249 of 1980 this Court, after admitting this petition challenging the claim of the revenue with regard to excise duty on the caps and capping charges, granted interim relief by an order dated October 22, 1980 permitting the petitioners to clear the said tubes without including the assessable value thereof the various post-extrusion and post-manufacturing expenses including, in particular, the said caps and capping charges, Pursuant to this interim order, the petitioners made an application to the Assistant Collector of Central Excise on August, 30, 1984 to the effect that the petitioners would be clearing aluminium collapsible tubes (metal containers) without caps from their factory premises. They further informed that such tubes without caps would be cleared on payment of duty to their store room/godown where the work of fitting the caps will be done. They also informed that the Central Excise gate pass would clearly mention "the tubes cleared without caps" in cases where they are cleared without being fitted with caps. They also assure that they would keep proper accounts of duty paid material received in their warehouse/store room and its despatch to the customers duly capped.

Thereafter by a letter dated September 6, 1984 addressed to the Superintendent of Central Excise, they submitted that there is a change in the ground plan for the licensed premises. In this they indicated that the manufacture of aluminium collapsible tubes would be carried on within the licensed premises and the place for capping would be at a separate place. They sought sanction of this revised ground plan. However, the Superintendent of Central Excise by his order dated September 10, 1984 rejected this application and insisted that the ground plan sub-10, 1984 rejected this application and insisted that the ground plan submitted for approval could not be approved at that stage and the old ground plan stood effective.

The petitioners, thereafter wrote to the Assistant Collector to reconsider the decision and appealed to him that it was necessary for them that the revised plan should be accepted. However, the Assistant Collector by his order dated October 3, 1984 did not accept the said revised plan. The petitioners, therefore filed the present petition to challenge these two orders viz. Ex. E and Ex. J to the petition.

In the meanwhile writ petition No. 1249 of 1980 came to be decided by me on July 3, 1987 wherein I held that caps and capping charges would not be included as an item of manufacture and therefore, no excise duty was leviable under Item No. 27 of the Tariff. It appears that as against my judgment the respondents intend to prefer an appeal. At the same time the respondents counted that this question as to whether caps and capping charges could be excisable or not is pending in the Supreme Court and they submit that this present petition should be stayed till the Supreme Court decides the matter one way or the other.

Since, I have already decided this question in writ petition No. 1249 of 1980 that it must be necessarily be held that caps and capping charges would not fall within the scope of Item No. 27 of the Tariff. If that is so it does not amount to manufacture at all. If that is so the same would not fall within the licensed premises. In that event the petitioners would be entitled to have separate premises for doing the capping of the tubes.

However, Mr. Master submits that as against the order of the Range Superintendent the petitioners could have preferred an appeal. He, therefore, submits that the present petition is not maintainable. I find no substance in this argument. It was clear that before this petition was filed by virtue of an order passed in writ petition No. 1249 of 1980, the respondents had to be restrained from recovering the charges in respect of caps and capping charges. It appears that at the time this petition was admitted there was an order that his petition should also be heard immediately after writ petition Nos. 1248 & 1249 of 1980, and therefore, in my view the said writ petitions having been decided, rule will have to be made absolute in this petition also as a matter of course.

However, Mr. Master seeks for some safeguard till the matter is decided by the Supreme Court. I think, I will give suitable directions in this behalf.

I, therefore, pass the following order :

Rule is made absolute in terms of prayer (a).

I direct that the respondents should approve the revised ground plan as contained in their letter dated August 30, 1984 being Ex. A with a period of six weeks from today.

I, further direct the petitioners that till such time the Supreme Court decides the question relating to caps and capping charges and as to whether they are excisable (which question is pending in the Metal Box case) the petitioners will have to maintain proper accounts in respect of capping operations.

I further direct that the petitioners will gave inspection of the said accounts once in a month as and when called upon by the respondents. However, I make it clear that the respondents will have liberty to inspect the premises where the capping operations are carried on.

However, in the circumstances of the case, there will be no order as to costs.