Susanta Chatterji, J. - (1.) The instant Rule was issued on February 12,1982 and an interim order was passed to the effect that the adjudication proceedings will not continue until the following steps are taken: a) Samples are drawn upon giving the petitioner reasonable opportunity and in their presence and the samples so drawn jointly by the petitioner and the respondent authorities should be sent to the National Test House, Alipore under their joint seal for testing; b) The samples drawn should reach National Test House within one week after such drawing; c) On receipt of the report from the National Test House, copies of such report should be given to the petitioner and the respondent authorities. It was further directed that order, if any, made in the adjudication proceedings would abide by the result of the Rule. Further, so far as the taking of the materials in future for captive consumption is concerned the petitioner would be at liberty to do so without payment of any excise duty but they should furnish Bank Guarantee for 50% of the amount of Duty assessed for such materials for each month to the satisfaction of the Collector of Central Excise, Calcutta and such bank guarantee would be furnished within three weeks from the date the Collector would intimate the amount of duty on such materials taken for captive consumption during the month.
(2.) It appears from the materials on record that the writ petitioner prayed for issuance of a Writ of Mandamus commanding the respondents not to levy and/or demand any Central Excise duty on the U.F. and P.F. solution prepared at the factory of the petitioner and used for the manufacture of plywood thread and to withdraw, cancel or rescind the purported orders and/or decisions or directives of the respondents concerned contained in the circular dated September 24,1980, the purported notice dated August 18,1981 and the order passed thereon if any, and the order dated August 28, 1981 and to act in accordance with law and for other consequential reliefs, as stated in the writ petition.
(3.) The writ petitioner has alleged that for manufacture of plywood, the petitioner processes various inputs such as veneers, cores frames and adhesive or glue compound. The glue compound is a heterogeneous mixture of urea, formalin, groundnut cake powder/tamarind seed powder and caustic and at times urea is substituted by the phenol. It is further disclosed that the said items are used for the purpose of manufacture of plywood and they have no specific identity and cannot be sold in the market as consumables. Further, the said solution itself has no life and is not marketable. The U.F./P.F. solution prepared at the petitioner's factory continued to remain within the stream of production and are processed in an integrated process in manufacture of plywood. Such U.F./P.F. solution are only intermediate inputs and are prepared at an intermediate stage in the course of manufacture of plywood and are not final or finished product and there can be no Central Excise duty and such duty cannot be levied. It is made clear by the petitioner that under the Central Excise Act, provisions and/or Rules thereunder including the provisions of Rules 9 and 49, the Central Excise duty can be levied and/or collected only if the goods are removed from the factory and there is a specific averment in the writ petition that the said solution is not removed from the factory of the writ petitioner, but are used in the manufacture of plywood.;