- (1.) The Petitioner, Messrs Union Carbide India Ltd., Manufacturer Eveready Flashlights (torches) at its factory at Lucknow. The bodies of the torches are made of aluminium. The petitioner-company purchases aluminium slugs and out of them manufactures the bodies of the torches. The process involved is described in paragraph 4 of the petition as follows :- "Aluminium slugs or circles purchased from Aluminium manufacturers are lubricated and fed into an impact extrusion press when the slugs are struck by the punch and are converted into a semi-plastic state and are pushed into the die at which stage cans are produced. The cans thus made have sharp uneven edges. In order to use cans so obtained as a component part in making flashlight cases, the cans undergo various processes, such as trimming, threading redrawing etc. After the cans are trimmed, threaded, etc., the cans are reeded, beaded, anodised and/or painted whereafter they are assembled with other components for making flashlight cases. The "aluminium cans or torch bodies", which the petitioner produces in the course of the manufacture of torches, have been subjected to excise duty under the Central Excise and Salt Act, 1944. In order to appreciate the contentions of the petitioner, it is necessary to refer to some of the provisions of the Act. Section 3 is the charging section and sub-sections (1) and (1-A), which are relevant for the purpose of this case, read thus :- (1). There shall be levied and collected in such manner as they may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India, and duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule. (1-A) The provisions of Sub-section (1) shall apply in respect of all 'excisable goods other than salt which are produced or manufactured in India by or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government." "Excisable goods" have been defined in clause (d) of section 2 to mean goods specified in the First Schedule as being subject to a duty of excise and includes salt. "Manufacture" has been defined in clause (f) of section 2. The First Schedule referred to in section 3 enumerates a number of items and sets out the duty payable thereon. "Item No. 27 relates to aluminium and stands thus :- Item No. Description of goods Rate of duty 27 Aluminium - (a) In any crude form including : (i) ingots, bars, bricks slabs, billets, 25% ad shots and pellets. valorem (ii) wire bars, wire rods and castings, not 25% ad otherwise specified. valorem (b) Manufactures the following namely 25% ad plates, sheets circles and strips in any form valorem or size not otherwise specified. (c) Foils, that is a product of thickness 20% ad (excluding and backing) not exceeding 0.15 valorem millimetres. (d) Pipes and tubes other than extruded 25% ad pipes and tubes valorem (e) Extruded shapes and sections including 25% ad extruded pipes valorem The "aluminium cans or torch bodies" produced by the petitioner have been subjected to excise duty under Item No. 27(c), that is to say, they have been treated as extruded shapes and sections of aluminium extruded pipes and tubes. It appears that the petitioner company wrote to the Superintendent, Central Excise, respondent No. 2 objecting that the "aluminium cans or torch bodies" produced by the petitioner were not covered by Item No. 27 (a) and were not liable to excise duty. Respondent No. 2, by his letters (Annexures C' and E' to the Writ Petition) did not accept its contention. The petitioner, without preferring any appeal or revision provided under the Act, filed this writ petition, challenging the levy of excise duty on its products.
(2.) Section 3 of the Act provides for the levy of excise duty on all excisable goods set forth in the First Schedule. "Excisable goods" have been defined to mean goods specified in the First Schedule. The goods set out in clause (e) of item No. 27 relating to aluminium are extruded shares and sections including extruded pipes and tubes. Therefore, excise duty on extruded shapes and sections of aluminium including extruded pipes and tubes can validly and legally be levied by the Department. From the statements made in the writ petition it is clear that the "aluminium cans or torch bodies" prepared by the petitioner are extruded shapes of aluminium.
(3.) The contention of Shri Gupta, learned Counsel for the petitioner, is that Item No. 27(e) covers only those articles which can be called "goods" according to the generally accepted meaning of that word. According to learned counsel, the word "goods'' means finished product which are known in the market and are marketable. He, therefore, urges that Item No. 27(e) is applicable only to such extruded shapes and sections of aluminium as are finished products, are knowing the market and are marketable. According to him, since the "aluminium cans or torch bodies" produced by the petitioner as intermediate products are not finished products and are neither known in the market nor they are marketable, they do not fall within Item 27(e). The second contention is that Item 27 is confined to manufactured goods and that, since in the production of the "aluminium cans or torch bodies" no manufacturing process is involved, the product is not excisable to excise duty. His third and last contention is that the excise duty on Item 27(e) being payable ad valorem no duty can be levied on it since the petitioner's product is not capable of valuation under section 4 of the act.;