Y THIRUPATHI RAO Vs. COLLECTOR OF CENTRAL EXCISE HYDERABAD

JUDGEMENT

(1.) In these two writ petitions, the petitioners pray for a declaration that Trade Notice Nos. 135/79 dated 22-6-1979 and 200/79 dated 17-8-1979 are not applicable to them. The petitioners are persons known as Takedars, who get the biris rolled by labour employed in biri making. They take the tobacco and leaves from the Principal Manufacturer, engage workers within their premises, get them rolled into biris and deliver the goods to the Principal Manufacturer and receive proportionate consideration for the biris rolled in their premises. By Trade Notice No. 135/79 (Hand made biris No. 6/79) dated 22-6-1979 all agents including contractors, sattedars and takedars of principal manufacturers of biris, whose clearance of raw biris in a financial year exceed 60 lakhs were required to take out a licence in Form No. L-IV and execute bonds for removal of raw biris provided they do not themselves sort, bake or wrap the biris. It is not necessary to refer to the other items in the notice as we are not concerned with them in these Writ Petitions. Form No. L-IV licence is a licence which is required to be taken by a manufacturer under the provisions of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The legality of this requirement is the principal challenge in Writ Petition No. 5593 of 1979. Later in partial modification of this notice Trade Notice No. 200/79 (Handmade biri No. 7/79) was issued on 17-8-1979. Under the said notice only such of the Takedars who get biris rolled through workers in his own premises was required to obtain Form No. L-IV licence and follow the procedure under Rule 56B of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) while moving the biris from the premises of the Takedars to the premises of the Principal Manufacturer. Questioning the validity of this notice Writ Petition No. 6148 of 1979 was filed.

(2.) The main contention of Miss V. Lakshmi Devi, the learned counsel for the petitioners in these two writ petitions is that these two notices requiring the Takedars to obtain Form No. L-IV licence is illegal and without jurisdiction inasmuch as they cannot be said to be manufacturers. They are persons, who take the leaves from the Principal Manufacturers, get them rolled into Katcha biris and send them back to the principal manufacturer and receive commission for the work done. They are not manufacturers within the meaning of Section 6 of the Act. Further Katcha biris are not excisable goods attracting excise duty. Hence the procedure prescribed in respect of excisable goods cannot be applied to them, as they prepared only Katcha biris. It was also contended that these two notices requiring Takedars whose clearance of biris exceeds 60 lakhs to obtain Form No. L-IV licence is discriminatory.

(3.) On the other hand, Mr. K. Subrahmanya Reddy, the learned standing Counsel for the Central Government contends that Takedars are manufacturers within the definition of Section 2, clauses (f) and (f)(i) and biris are excisable goods as it is an item mentioned in the First Schedule. He further submitted that the requirement to obtain Form No. L-IV licence was confined to such of the Takedars, who clear more than 60 Lakhs of biris in a year as Trade Notification No. 31/79 dated 1-3-1979 exempts the clearance of biris on behalf of a manufacturer upto 60 lakhs from the whole of the excise duty leviable thereon. It was therefore contended that there was no discrimination in the application of this requirement.