Decided on June 27,1979

UNION OF INDIA Respondents


B.J.DIVAN - (1.) A short but interesting question as to what is the meaning of the word pump occurring in Item 30-A of the Schedule to the Central Excise and Salt Act 1944 arises in this case. The petitioner has prayed for a writ of mandamus and/or any other appropriate writ direction or order under Article 226 of the Constitution quashing and setting aside the orders of the respondent dated June 16 1976 and March 31 1978 and also directing the respondent to refund the sum of Rs. 32 74 127 paise being the amount of excise duty which according to the petitioner was illegally collected by the respondents and which was paid under protest by the petitioner in respect of sale of accessories effected along with sale of power driven pumps where the prices of such accessories have been separately shown in the invoices of the petitioner. The petitioner has also prayed that the respondents be directed to refund the further amounts which would be so collected during the pendency of this special civil application. The petitioner has also prayed for a permanent injunction restraining the respondents from collecting and/or levying any excise duty under Item 30-A in respect of sale of accessories along with power driven pumps where the prices of such accessories have been separately shown in the invoices of the petitioner. In the alternative to the above two prayers the petitioner has prayed for an order quashing the levy of excise by respondents on sale of power driven pumps without accessories under Item 30-A and to further direct the respondents to refund to the petitioner the amount of excise duly collected from March 17 1972 in respect of such transactions and also to restrain the respondents permanently from collecting or levying any excise duty under Item 30-A in respect of such transactions.
(2.) The petitioner is a company registered under the Indian Companies Act and manufactures various types of hydraulic and engineering goods since 1943. Respondent No. 2 is the Assistant Collector having jurisdiction over the area in which the petitioner is carrying on its manufacturing activities. It manufactures power driven pumps and various accessories of such power driven pumps and the manufacture of power driven pumps is subjected to central excise duty under Item 30-A of the First Schedule to the Central Excise & Salt Act 1944 The entry provides: "Power driven pumps (including motor pumps turbopumps and mono block pump sets) for liquids whether or not fitted with measuring devices." and the duty is 20 per cent ad valorem. It may be pointed out that Item 30 was inserted in the First Schedule of the Central Excise & Salt Act by Finance Act of 1969 and it was inserted in 1969. Though according to the Item excise duty at 23 per cent ad valorem was leviable by a notification also issued simultaneously along with the insertion under the relevant provisions of the Act complete exemption was granted to power driven pumps from excise duty. Oil March 15 1977 the complete exemption was withdrawn and after withdrawal of the total exemption effective excise duty of 10 per cent could be levied on power driven pumps. On June 17 1977 excise duty was reduced from 10 per cent to 5 per cent and on February 27 1975 a notification was issued once again granting complete exemption from duty in respect of Power driven pumps.
(3.) On March 21 1972 under the self-removal procedure the petitioner company submitted a classification list to the excise authorities and after the classification was submitted on May 27 1972 the Central Board of Customs and Excise issued a clarification regarding power driven pumps. The query which was put to the Central Board was Do power driven pumps include the prime mover as well as spare parts and other accessories link pipes fittings pressure gauges volt meters etc. ? and in reply to this query the Central Board clarified Accessories and pipes and fittings:- Since the duty is leviable on the pump only the question of including their values does not arise if the values of such accessories are indicated separately. However in the case of measuring devices cleared along with the pump the values thereof are to be included. On August 4 1973 the Assistant Collector partially modified the classification list and he held that the accessories which are in dispute before us were exigible to excise duty under Item 30-A. However the Assistant Collector had not given any reasons in support of his conclusion. Against this decision of the Assistant Collector the petitioner went in appeal and the Appellate Collector by his order dated September 25 1975 allowed the appeal. He set aside the order of the Assistant Collector on the ground that reasons had not been given and he remanded the matter back to the Assistant Collector so that a speaking order might be passed. On June 16 1976 the Assistant Collector passed the order after remand once again holding that accessories were exigible under Item 30-A and he held these particular accessories in dispute before us to be parts of pump. The petitioner again went in appeal against the order of the Assistant Collector and by the order dated November 19 1976 the Appellate Collector allowed the appeal and upheld the contention of the petitioner. This order of the Appellate Collector was not implemented for some time and thereupon on August 3 1977 the petitioner filed Special Civil Application No. 1100 of 1977 in this Court praying for a writ of mandamus to the Assistant Collector so as to make him comply with the order of the Appellate Collector. On August 18 1977 notice was issued in Special Civil Application No. 1100 of 1977 of this Court. In the meanwhile on September 20 1977 the Central Government issued a show cause notice in suo motu revision against the order of the appellate authority. Thereafter it seems that Special Civil Application No. 1100 of 1977 was withdrawn. On March 31 1978 the Central Government passed the revisional order setting aside the Appellate Collectors order. This order of the Central Government was dispatched by the Central Government on May 6 1978 On July 24 1978 the present special civil application was filed by the petitioner.;

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