AMARENDRA NATH SEN, J.- - (1.) THE Judgment of the court was delivered by
(2.) THE question for consideration in this appeal by special leave is whether the plywood manufactured by the respondent and utilised by the respondent in manufacturing plywood circles to be used as component parts of packing material for wire and cables is exigible to excise duty under the central Excises and Salt Act, 1944. The respondent is a manufacturer of plywood circles to be used as component parts of packing materials for wire and cables. The respondent used to be assessed to duty under the central Excises and Salt Act, 1944 (hereinafter referred to as the Act) on the basis of the total area of the circles manufactured and the duty used to be collected when the circles were issued out of the factory premises. On 13/02/1967 an audit objection was taken to this mode of assessment of excise duty on the ground that the process of cutting out circles and punching of holes cannot be considered as incidental or ancillary to the completion of the manufacture of plywood. The audit objection pointed out that the levy of excise duty must be on the total area of blocks or panels of plywood that came out of the press and not on the area of the circles made out of the blocks or panels. It was further indicated that by plywood it was meant only plywood which had a general market and not plywood circles specially manufactured for a particular purpose or a particular customer. In consequence of the audit objection, the Range Officer, central Excise, Irinjalakuda, the appellant 2 herein, issued a notice on 22/02/1967 to M/s Oriental Timber Industries, the respondent in the appeal, calling upon the respondent to furnish area of the plywood manufactured 87 at the panel stage for taking clearance of the plywood circles. By this notice the Range Officer also mentioned that the assessment of the plywood circles would be made at the panel stage and not on the finished circles and directed M/s Oriental Timber Industries to file ARI furnishing the area of plywood at the panel stage. In the notice dated 22/02/1967 issued by the Range Officer, the Range Officer had also mentioned that the said notice was issued as the Collector of Customs had ordered that the assessment of plywood circles would be made at the panel stage and not on the finished circles. For the sake of convenience we shall describe the Range Officer, central Excise, Irinjalakuda who happens to be the second appellant before us as the Range Officer and we shall refer to the Collector of Customs and central Excise, Cochin, the first appellant before us, as the Collector and M/s Oriental Timber Industries, the writ petitioner before the High court and the respondent before us in this appeal, will be described as the firm.
(3.) THE firm sent a reply to this notice on F 23/02/1967 through the lawyer asking for a copy of the order of the Collector referred to in the notice of the Range Officer. It further appears that the Advocate, of the firm had also addressed a letter on 24/02/1967 to the Collector, requesting the Collector for a copy of the order. No copy of the order was furnished to the firm or She Advocate and instead the Range Officer on 24/02/1967 issued a further notice to the firm reiterating the stand earlier taken in the notice dated 22/02/1967 and this notice dated 24/02/1967 further directed that duty paid on plywood panels cleared outside the factory could not be brought back for further process of cutting circles without obtaining prior permission. On 28/02/1967 the firm filed a writ petition in the High court in which the validity of the aforesaid notice was challenged and obtained an order or stay of the operation of the aforesaid notices. The writ petition came up for final hearing on 27/03/1969. A learned Single Judge of the High court passed an order to the effect that the Collector of Customs would issue a copy of the order referred to in the notice of the Range Officer dated 22/02/1967 within a month from that date and on receipt of that order the firm might seek appropriate remedies by way of appeal under the statute. The writ petition was accordingly disposed of on the basis of the said order.;