R.R.Rastogi, J. - (1.) It would be convenient to dispose of this bunch of writ petitions in a common order. The question for consideration is as to whether mixed ground Masala is liable to excise duty under Tariff Item 68. Tariff Item No. 68 was introduced by the Finance Act, 1975 and on its introduction it read as under :" 68. ALL OTHER GOODS, NOT ELSEWHERE One per cent ad SPECIFIED, MANUFACTURED IN A FACTORY valorem. BUT EXCLUDING (a) alcohol, all sorts, including alcoholic liquors for human consumption; (b) opium, Indian|hemp and other narcotic drugs and narcotics and (c) dutiable goods as defined in Section 2 (c) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Explanation : In this term, the 'Factory' has the meaning assigned to it in Section 2 (m) of the factories Act, 1948". By the Finance Act, 1979 the exclusions remained as before but the description of the Tariff Item was modified so as to read : "All other goods not elsewhere specified." The Finance (No. 2) Act, 1980 added an Explanation to this Tariff Item, but that is not relevant for the purposes of the present petitions.
(2.) The brief facts, as set out in Writ Petition No. 427 of 1979 are these. M/s Ashok Griha Udyog Kendra Private Limited, a private Limited company (hereinafter referred to as 'the petitioner'), carries on business in purchase and sale of spices whole, ground and mixed. It purchases spices from the market like Jeera, Ajwaine, Saunf, Methi, Saunf Mahin, Rai and Kalaunji and sells the same as such after cleaning them. The second activity is that the petitioner grinds these whole masalas into powder form and sells the same as such. The last activity is that the petitioner grinds the Masalas and mixes them and prepares Garam Masala, Dal Masala, Sabzi Masala, Rayta Masala, Jal Jeera and Chana Masala. We are concerned with this item of mixed spices in the present writ petitions because the time of the hearing of these petitions it was stated before us by the learned Standing Counsel that whole Masalas and ground Masalas do not fall under Tariff Item 68 and excise duty is not sought to be levied on the same.
(3.) The case set out by the petitioner is that it has been carrying on this business since 1957 but since the goods prepared by the petitioner were beyond the purview of the Central Excises and Salt Act (Act No. 1 of 1944) (hereinafter referred to as 'the Act'), the petitioner was never required to pay any excise duty on the same. On 18-6-1977 the Central Excise Inspector inspected the petitioner's factory and asked its Director to obtain'a licence under the Act since spices are excisable goods. As demanded the petitioner submitted a stock list. It was granted a licence on 22-6-1977. The rate of excise duty was two per cent and up to 5-9-1979 the petitioner deposited Rs. 5,17,048.81 as excise duty. According to the petitioner this excise duty was for the period from 22-6-1977 and it had been paying the same under protest and it has been making representations before the Departmental Authorities. It was granted exemption in respect of 12 items by an order dated 8/9-3-1978 passed by the Superintendent, Central Excise, Kanpur. That provisional exemption was allowed under Rule 9-B of the Central Excise Rules and the petitioner was obliged to furnish a bond for Rs. 50,000/-, but by the time that order was passed the petitioner had already paid Rs. 89,998.74 as excise duty. On 22-5-1979 the petitioner claimed refund of this amount but no reply was received and instead it was served with a notice on 28-5-1979 by which, it was required to furnish an additional bond in the sum of Rs. 1,50,000/-. The petitioner submitted another classification list on 7-7-1979 of exempt goods but by letter dated 30-8-1979 the Superintendent, Central Excise, demanded the execution of a fresh security bond in the sum of Rs. 1,50,000/-from it. By means of this writ petition the petitioner seeks the quashing of the provisional assessment and the demand raised on its basis and also for refund of Rs. 5,17,048.81.;