Om Prakash, J. - (1.) M/s Dabur India Limited (hereinafter to be referred to as M/s. Dabur) having factory premises at Sahibabad and M/s. Sharda Boiron Laboratories Limited (hereinafter referred to as M/s. Sharda) also situated at Sahibabad, have challenged in these writ petitions the show cause notice dated 2-11-1988 jointly given to them by the District Excise Officer, Ghaziabad (Annexure 14 to the writ petition of M/s. Dabur). Anr. writ petition being Writ Petition No. 1160 of 1988 has been filed by M/s. Sharda for quashing the order of the Central Government dated 3-6-1988 (Annexure 1 to this writ petition). As all these writ petitions can be conveniently decided together, they are consolidated and are disposed of by a combined order.
(2.) The facts as succinctly stated are that M/s. Dabur, a public limited company, is engaged in the business of manufacture and sale of Allopathic and Ayurvedic medicines and toilet preparations. It is contended that in some medicines, alcohol is used and for the manufacture of such medicines, licence has been obtained from the State Excise Authorities. Other medicines and cosmetics are said to have been manufactured under provisions of the Central Excises and Salt Act, 1944 (briefly the Act, 1944). In these writ petitions, relevant preparation is "Homeodent" tooth-paste being manufactured by M/s. Dabur. The contention of the petitioners is that the Homeodent does not contain alcohol, though one of the ingredients of such preparation is mother-tincture containing alcohol and the same is assessable under Item 14FF of the Act, 1944. The Assistant Collector, Central Excise, Ghaziabad took the view that the Homeodent was classifiable under sub-heading No. 3206.20 of Chapter 32 of the Central Excise Tariff Act, 1985 and on that, duty at the rate of 15% ad valorem was leviable. The duty computed at the said rate by the Central Excise authorities was paid by the petitioners on the goods manufactured from 11-1-1985. On 18-1-1988, the District Excise Officer made a surprise inspection of the units of the petitioners and then it was revealed that the Homeodent tooth-paste manufactured by M/s. Dabur, was toilet preparation containing alcohol within the meaning of Section 2(k) read with Item 4 of the Schedule, referred to in Section 3 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (for brevity's sake, the Act, 1955) and was, therefore, assessable to duty at the rate of 100% ad valorem. The District Excise Officer, Ghaziabad therefore, caused a common notice dated 17-3-1988 to be served on the petitioners requiring them to pay duty aggregating to Rs. 68,13,334.20 under the provisions of the Act, 1955 on such goods manufactured from 1-1-1985 till the date of notice. Against this notice, some representation was made by the petitioners to the District Excise Officer and thereupon the petitioners were directed to deposit provisionally the excise duty to the tune of Rs. 46,55,451.45 under the Act, 1955 and the same was deposited by the petitioners. Such demand was challenged by the M/s. Dabur in appeal before the Excise Commissioner, respondent No. 2 vide appeal memo dated 5-4-1988, being Annexure 9 to M/s. Dabur's writ petition. The Excise Commissioner vide order dated 5-5-1988 (Annexure 10 to M/s. Dabur's petition) affirmed the order of the District Excise Officer and dismissed the appeal. No appeal was filed by M/s. Sharda against the demand notice of the excise duty under the Act, 1955. However, both the petitioners approached the Central Government in revision under Rule 128 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 (briefly, the Rules, 1956). The revision of M/s. Dabur was disposed of by the Central Government and the result was communicated by the Additional Secretary to the Government of India by the order dated 22-9-1988 (Annexure 12 to M/s. Dabur's writ petition). The contention of M/s. Dabur that demand was raised on it without any opportunity of being heard and in violation of principles of natural justice, was accepted and a direction was given that the case be adjudicated upon de novo after giving a show cause notice and proper opportunity of being heard to the party. The revision filed by M/s. Sharda was not entertained by the Central Government on the ground that a right of appeal was vested in M/s. Sharda which could have been exercised up to 17-6-1988 (see order dated 3-6-1988 Annexure 1 to the writ petition No. 1160 of 1988).
(3.) Pursuant to the order of the Central Government, the District Excise Officer issued the impugned show cause notice dated 2-11-1988 to the petitioners jointly, validity of which has been challenged by them in their writ petition and Anr. writ petition has been filed by M/s, Sharda only to challenge the order of the Central Government refusing to entertain its revision.;