- (1.) By this special Civil Application petitioner Jagdish D. Dengvekar is seeking to quash or set aside the order passed by Superintendent, Central Excise, Poona II Divn. on 26/27th April 1968 whereby the Superintendent, Central Excise, levied excise duty Rs. 566.44 on the petitioner for manufacturing French Polish between March 1964 and May 1965 and further excise duty of Rs. 228.21 for having manufactured French Polish between June 1965 and April 1966 and further levied penalty of Rs. 5/ - for breach of Rule 9 and penalty of Rs. 2/ - for breach of Rule 53, which order levying excise duty as well as penalty was confirmed by the Collector of Central Excise on 3rd September, 1969.
(2.) A few facts leading to the petition may be stated. In January, 1963 the petitioner made an application for licence to manufacture French Polish and also for a permit for denatured spirit. It appears that he wanted to start a manufacturing concern in his factory at Poona and for that purpose he made the aforesaid application in January 1963. On 4th March, 1964, a licence as well as permit asked for were granted. The licence obviously was to manufacture French Polish, Varnish and Thinners. It appears that the petitioner went on manufacturing French Polish without complying with the provisions of the Central Excises and Salt Act, 1944 and the Rules framed thereunder. On 23 December, 1965 the Inspector, Central Excise, Poona visited its premises and he noticed a unit licensed for the manufacture of French Polish Operating in the premises. He also found that the petitioner had not maintained accounts required under Rule 53 of the Central Excise Rules, 1944. It was further noticed that he had manufactured a quantity of 2,360.20 litres of French Polish during the period March 1964 to May 1965 and had cleared it without payment of duty. The petitioner's statement was recorded by the Inspector. Later, oh 24th February, 1966 a show cause notice was issued to the petitioner calling upon him to show cause why duty and penalty should not be levied on him. Curiously enough the petitioner made a representation to the Collector which he termed as an Appeal whereby he challenged the proposed levy of duty as well as penalty on the ground that what he had manufactured was French Polish and the same did not constitute Varnish within the meaning of item "Varnish" contained in Tariff Item 14 (II)(i) of the Central Excise Tariff under which Varnish was liable to excise duty. The said item runs as follows : - "II. Varnishes and blacks - (i) Varnishes". and then follow the rates at which the excise duty is payable. The collector rejected his representation on 28th February, 1966. The petitioner carried the matter further by way of revision to the Central Board of Excise & Customs and the Central Board by its letter dated 16the March, 1967 rejected the revision. Against the order of the Central Board of Excise the petitioner preferred further application to the Government of India, Ministry of Finance (Department of Revenue and Insurance), New Delhi on 3rd June, 1967, which application was rejected by the Government of India on 11th June. 1968. It may be stated that levy of duty as well as penalty was challenged by the petitioner in these proceedings adopted by him against the show cause notice on three grounds : (1) that no excise duty was leviable because the French Polish was not covered by item of Varnishes ; (2) that in the case one Mr. Sharma, who was manufacturing French Polish, exemption had been granted from levy of excise duty and as such the petitioner was discriminated against ; and (3) then certain notification which was issued on 6th July, 1963 in which a distinction was sought to be made between manufacturers of Varnishes who had owned their factories prior to 6th July, 1963 and those who owned such factories on and after 6th July 1963 was discriminatory. All these grounds were negatived and the Government of India rejected the petitioner's application dated 3rd June 1967 on 11th June; 1968. Thereafter, the Superintendent, Central Excise, by his order dated 26/27th April, 1968 levied the excise duty of Rs. 566.44 for the manufacture of French Polish between March 1964 and May 1965 and further excise duty of Rs. 228.21 for the manufacture of French Polish between June 1965 and April 1966 and penalty of Rs. 5/ - and Rs. 2/ - for breaches of Rules 9 and 53 respectively of the Central Excise Rules, 1944. Against this order of the Superintendent Central Excise, imposing excise duty as well as penalty the petitioner preferred and appeal to the Collector of Central Excise, Poona, on 1st July, 1968 but the Collector of Central Excise rejected the appeal on 3rd September, 1969. . It is these two orders passed by the Superintendent, Central Excise on 26th/27th April, 1968 and the Collector of Central Excise on 3rd September, 1969 that are being challenged by petitioner by the present writ petition filed under Articles 226 and 227 of the Constitution.
(3.) The respondent have resisted the petition on several grounds by filing an affidavit in reply of one N.D. Khosla, Deputy Collector of Central Excise, on 14th June, 1971. Apart from raising preliminary objection to the maintainability of the petition on the ground of laches as well as on the ground of non -exhaustion of remedies available to him under the Act and Rules framed thereunder, the respondents have denied several submissions and contentions made by the petitioner on merits. It has been contended that French Polish has been rightly held to be included in the item of 'Varnishes' in Tariff Item 14 (II)(i) of the Central Excise Tariff and the levy of duty as well as penalty on the petitioner was perfectly justified in respect of manufacture of French Polish indulged in by him without complying with the provisions of the Act and the Rules. It is further denied that the case of Sharma in respect of whom exemption has been granted is similarly situated as that of the petitioner and as such the charge of discrimination is vehemently denied. The notification dated 6th July, 1963 is also justified on the ground that classification of manufacturers of French Polish in two groups, those who owned their factories prior to 6th July, 1963 and those who owned their factories on and after 6th July, 1963 is made on rational basis and as such there was no discrimination as suggested by the petitioner.;