Alladi Kuppuswami, A.C.J.
1. The petitioners in most of the petitions carry on the business of manufacturing rice bran oil by the solvent extraction process and export de-oiled rice bran to the foreign countries. On 2-8-1976, there was an amendment to Schedule II of the Customs Tariff Act, 1975 whereby item No. 21 was introduced at the end of the schedule and it was stated that this item viz., animal feed is liable to export duty at the rate of Rs. 125 per tonne. On the same day, a notification was issued in exercise of the powers conferred under Section 25(1) of the Customs Act, 1962. By that notification, the Government in the public interest exempted animal feed containing not more than 40 per cent protein contents falling under item No. 21 of the Second Schedule of the Customs Tariff Act, 1975 and exported out of India, from the whole of the duty of customs leviable thereon under the second schedule. Subsequently, there was another notification on 22-1-1977 which was in supersession of the notification dated 2-8-1976. By that notification the Central Government in the public interest exempted animal feed falling under item 21 of the second schedule of the Customs Tariff Act, 1975 and specified in the Table annexed to the notification, when exported out of India, from the whole of the duty of customs leviable thereon under the said second schedule. The Table is as follows :
'1. Animal feed of any of the following descriptions :-
(a) Cotton seed cakes, whether decorticated or not;
(b) Cotton seed extractions, whether decorticated or not;
(c) Lin-seed cakes;
(d) Lin-seed extractions;
(e) Guar meal.
2. Mixed or compounded animal feed, containing one or more of the ingredients mentioned at S. No. 1 above, whether or not such animal feed contains any other oil-cakes or substances, provided the protein content of such animal feed is not more than 40 per cent.'
Finding that by reason of the second notification, the exemption granted in respect of rice bran containing less than 40 per cent protein value as per the notification dated 2-8-1976 was removed, the petitioners and other rice bran manufacturers made representations to the Government of India and it is stated that in response to such representations another notification was issued on 13-5-1977 exempting de-oiled rice bran from customs duty. It is also significant to note that while doing so, no limitation as to protein content was introduced. In other words, de-oiled rice bran whatever may be the extent of the protein content was exempted from customs duty.
2. We are concerned in these writ petitions with de-oiled rice bran exported by the petitioners between the period 22-1-1977 and 13-5-1977. Notices were issued to the exporters of rice bran during this period item 21 of Schedule II to the Customs Tariff Act. Challenging the validity of these notices, these writ petitions have been filled.
3. Sri Babulu Reddy, the learned counsel for some of the petitioners who has addressed arguments on behalf of all the petitioners has raised the following contentions :
1. De-oiled rice bran is not at all animal feed within the meaning of item 21 of Schedule II of the Customs Tariff Act. De-oiled rice bran is produced by the solvent extraction process using hexane which has a pungent smell, and in view of the presence of this product, it is repulsive to cattle and therefore, the end product cannot be used as animal feed.
2. Even assuming that it is animal feed within the meaning of item 21 of Schedule II, it is exempted by the notification dated 2-8-1976 as it admittedly consists of less than 40 per cent protein. The subsequent notification of 22-1-1977 which exempts other commodities like cotton seed cakes etc., and the mixture containing any one of those ingredients has not the effect of taking away the exemption granted by the previous notification dated 2-8-1976.
3. If the notification dated 22-1-1977 is constructed as denying exemption to rice bran extract containing less than 40 per cent of protein, the notification is arbitrary and also violates Article 14 of the Constitution inasmuch as it discriminates between rice bran extracts and similar products.
4. As the petitioners and others exported de-oiled rice bran under the impression that it was exempted from customs duty and the subsequent notification of 22-1-1977 had not the effect of removing the exemption the authorities were precluded from levying customs duty on the doctrine of equitable estoppel.
4. In the counter-affidavit, it is asserted that de-oiled rice bran can be used as animal feed and is in fact being used as animal feed and also exported as animal feed and that it falls squarely within item 21. It is also argued that the terms of the notification dated 22-1-1977 are clear and they refer only to the specific items mentioned therein and do not cover de-oiled rice bran. It is submitted that the said notification is not arbitrary or violative of Article 14 of the Constitution. It is also argued that there is no question of equitable estoppel as the exports were made after the notification of 22-1-1977.
5. It is seen from a perusal of the respective contentions that the decision regarding the validity of the claim of the authorities that the export duty is leviable depends upon a number of questions of fact. To illustrate : it has to be ascertained whether de-oiled rice bran obtained by the solvent extraction process is useful as animal feed. The further question has to be gone into whether the use of hexane during the solvent extraction process which according to the petitioners has a pungent smell results in de-oiled rice bran not being fit for use as animal feed. In this connection, the learned counsel for the Central Government has produced some documents to show that if hexane is of a particular variety and if there is proper quality control in the solvent extraction process, then the de-oiled rice bran will be fit for being used as animal feed. This leads also to the question whether hexane which is being used is of that type and whether the petitioners are following the advice given by the Indian Standards Institution in manufacturing de-oiled rice bran is such a way that the end product would be fit for being use as cattle feed. With regard to the question of equitable estoppel it has to be decided whether the exports were made with full knowledge and implications of the notification dated 22-1-1977. In this connection, Sri Babulu Reddy submitted that the omission of de-oiled rice bran in the notification dated 22-1-1977 was by mistake. The subsequent notification was intended to extend the area of exemption by including several other commodities like cotton seed cakes etc. It was never intended that the exemption granted to the de-oiled rice bran should be taken away from the exemption and when representations were made, the matter was corrected by notification dated 13-5-1977, and the authorities went further in granting exemption even to rice bran containing more than 40 per cent protein content as the said notification does not refer to any limitations as to protein content at all. It is also well settled that the applicability of Article 14 of the Constitution, to a large extent, depends upon questions of fact as to whether the commodities were of a similar charter or not. In view of the fact that the decision of the question depends upon going into a number of disputed facts, we consider that the proper course for the petitioners is to pursue the remedies provided under the Act and this is not a fit case for interference in writ petition at this stage.
6. Sri Babulu Reddy also submitted that when all the facts were brought to the notice of the Collector of Customs, Bombay in similar matters the Collector has held that export duty is not leviable. If that is so, the petitioners should not have any apprehension that their cases will be dealt with on a different footing by the Customs officials in this State. For all these reasons, we feel that there is no case made out for interference in the writ petitions at this stage. Representations to the show cause notices will be made within 4 weeks from to-day. It is also brought to our notice that when stay was granted by this Court, it was directed that the petitioners should furnish bank guarantee for the amount demanded. The bank guarantees will be continued or renewed until the disposal of the adjudication proceedings before the authorities under the Customs Act.
7. In regard to Writ Petitions 942, 944, 963 and 973 of 1977, the petitioners are manufacturers of Sal seed extractions and Niger oil seed extractions. Though all the contention referred to above do not apply to the petitioners in these cases, inasmuch as even in these cases, questions of fact are involved, the same order as made in these writ petitions will cover these cases also.
8. In the result, the Writ Petitions are dismissed, but without cost.