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Judgment
Ajoy Nath Ray, J.—In this application the writ petitioner seeks to be relieved from payment of excise duty in respect of the intermediate product called "carded gilled sliver" which occurs at an intermediate stage from the conversion of fibre to yarn. The first writ of the writ petitioner in this regard was marked as Matter No. 1327 of 1980 in this Court and that was disposed of on the 14th day of June, 1982 before Justice Borooah. The order is at page 50 wherein his Lordship was pleased. to set aside the order of the Assistant Collector dated 8th June, 1980, inter alia, on the ground of non-compliance with the rules of natural justice which had occurred by reason of refusal of an adjournment. Two other points regarding non-consideration of limitation and applicability of Rules 9 and 49 were also mentioned by his Lordship.
In the result, by the order dated 14th June, 1982 apart from setting aside the adjudication order of the Assistant Collector, a direction was passed for fresh adjudication within six months, and further, bank guarantees were directed to be furnished for the disputed amounts.
3.The bank guarantees for the sums of Rs. 2 lakhs and Rs, 1 lakh furnished in respect thereof are mentioned with the particulars at page. 52A of the annexures to the writ petition.
The second writ by the writ petitioner was disposed of before Justice Prabir Kumar Majumdar on the 26th February, 1988 when his Lordship passed an order on that matter which had been marked as No. 1057 of 1983 directing that the writ petitioners will pay off the dues within three months from date. The foil terms of the order are set out at. paragraph 29 of the writ petition.
It is stated in the 28th paragraph of the writ petition that the aforesaid writ of 1983 primarily challenged the legality and validity of the Rules 9 and 49 of the Central Excise Rules. These rules are also set out in extenso in the writ petition under paragraph 22 thereof and the said rules as set out also contain the amendments which were incorporated, therein in the month of February, 1982.
Broadly speaking, the effect of the amendment to the rules by reason of explanations set out therein was that if in a continuous process in a single factor or in a building appurtenant thereto, a manufacturer happens to manufacture intermediate products, which were also goods excisable within the meaning of the Central Excise Act, then and in that event, Central Excise [duty] would be payable upon even those intermediate goods or products notwithstanding the immediate subsequent utilisation thereof in the manufacturing process for production of ultimate goods which the factory had been set up to produce or manufacture.
Thus, if the intermediate product carded gilled sliver is goods excisable then the writ petitioner would be compelled to pay excise duty for intermediate production thereof in view of the 1.982 Amend meats to Rules 9 and 49 notwithstanding the immediate subsequent utilisation of carded gilled sliver in the manufacturing process of production of yarn. The 1982 Amendment also was made applicable with retrospective effect by Section 51 of ''The Finance Act of 1982 which is mentioned in paragraph 21 of the writ petition. This retrospective effect thus covers the period backwards upto 1944, i.e., a period of nearly 40 years.
Be that as it may, these amendments and the retrospective validation or enforcement thereof were upheld by the Supreme Court and these are today beyond challenge.
The point that squarely arises in the writ today, which is the third writ, is whether the intermediate product being carded, gilled silver is goods within the meaning of the Excise Act for being so excisable. If these are goods, then the demand made by way of letters dated 24th May, 1988 and 23rd May, 1.988 for payment of dues as ordered by Justice Majumdar would have to be pronounced as valid and the writ petitioner would at least be compelled to pay up the amounts covered by the bank guarantees mentioned above.
None has appeared for the respondents before me.
I direct that the copies of the affidavits-in-opposition and reply produced by Mr. Chakraborty appearing on behalf of the writ petitioner be countersigned by the Assistant Registrar of this Court and kept on record. It has been stated in paragraphs 30 and 31 of the writ petition that the intermediate product mentioned above is not marketable at all. The reasons for such inherent unmarketability of the intermediate product are mentioned in these two paragraphs. In paragraph 12 of the affidavit-in-opposition affirmed by one Mohemmed Shaffi Jamaluddin, it has been stated that the Bombay High Court on the 24th August, 1987 committed a gross error of law in recording a finding that the goods carded gilled sliver were not excisable goods.
This is a seriously contumacious allegation. There are only three places where a judgment can with impunity be called erroneous. The first is before a higher Court where an appeal lies. The second is in a memorandum of appeal where counsel is permitted according to the best of his belief to challenge a competent judgment as erroneous on law or facts. The third is where in the process of a genuine academic discussion a judgment is branded as incorrect. An affidavit is not a place where a judgment of a competent Court of Law is to be called as erroneous. A deponent before a Court has no authority and no business to take upon himself the power and responsibility of pronouncing as erroneous judgments passed by Courts competent to deliver the same.
I put the petitioner and all other persons concerned and interested at liberty to initiate appropriate proceedings in contempt before the concerned Bombay High Court for the reckless and contumacious allegation regarding the pronouncement of the said High Court mentioned by me above.
Mr. Chakraborty has submitted that in the case of Eastern Spinning Mills, the Collector of Central Excise, Calcutta-I by his order dated 30th September, 1991 has held the very same intermediate product of carded gilled sliver as not excisable and has thus dropped a claim of approximately Rs. 5 Crore, although the same is in respect of synthetic yarn.
Apart from the aforesaid two decisions, one of the Bombay High Court which is of high persuasive authority, and the other of the Collector, which is of considerable assisting authority, I find in paragraph 12 no specific dealing with the reasons mentioned in the petition as to why carded gilled sliver should not be treated as an effectively marketable commodity. There are no details given in the affidavit-in-opposition as to the amount of trade that goes on in Calcutta or India or anywhere else in relation to the marketing of carded gilled sliver as such. Speaking briefly, there is nothing to show that carded gilled sliver is marketable in fact or is in fact marketed by traders; thus it cannot be treated as marketable, or in law excisable under the Excise Act.
Under these circumstances, the writ petition succeeds. There are no dues payable by the writ petitioner for the intermediate production of carded gilled sliver during the manufacturing process of production of yarn from fibre. The sum of Rs. 32,106/- paid by the writ petitioner prior to the order of Justice Borooah in regard to the bringing into existence of this intermediate product should thus be refunded. There shall accordingly be a writ absolute in the nature of mandamus as prayed for in prayer (c) (ii) of the writ petition. There shall be a Writ absolute in the nature of certiorari quashing the demands, copies whereof form Annexures "C" and "I" of the writ petition being respectively dated 1st February, 1980, 24th May, 1988 and 23rd May, 1988. The 2nd respondent, who is the deponent making the reckless allegation in regard to the Bombay High Court in his affidavit-in-opposition shall personally pay the costs of this application assessed at 300G.MS.
The bank guarantees mentioned above shall stand discharged and the originals are to be returned to the writ petitioner by the authorities now in possession of the same.
All parties are to act on a signed xerox copy of this dictated order on the usual undertaking.