GWALIOR RAYON SILK MANUFACTURING WEAVING COMPANY LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER no. 1 in this petition is an incorporated Company. The petitioner Company owns a factory manufacturing chemicals and one of the products of the said factory is chlorine (Cl2 ). The second petitioner, is a share-holder and employee of the petitioner Company. The petitioners by this petition under Article 226 of the Constitution challenge notifications dated 26th July 1971 and 24th August 1974 issued by the Government of India under Section 3 (2) of the Central Excises and Salt Act, 1944, fixing tariff value of liquid chlorine at Rs. 500/- per metric tonne. The petitioners also pray for refund of excess amount of duty paid under protest by the petitioner Company.

(2.) SECTION 3 (1) of the Act which is the charging section, provides that "there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rate, set forth in the First Schedule. " Section 3 (2) of the Act empowers the Central Govenment to fix tariff values of excisable articles chargeable with duty ad valorem. Section 3 (3) authorises fixation of different tariff values for different classes or descriptions of the same excisable articles. Section 3 (2) and 3 (3) as they stood at the relevant time, read as follows :

(3.) THE first contention of the learned counsel for the petitioners is that Sections 3 (2) and 3 (3) are ultra vires as these provisions confer on the Central Government power to fix tariff values without any guidelines at its complete discretion. The second contention of the learned counsel for the petitioners in the alternative is that the guidelines, if any, were not followed in fixing tariff value of liquid chlorine by the impugned notifications and the tariff value fixed is entirely arbitrary.