G.P. Singh, C.J.
1. The petitioner is a manufacturer of Bidis. Hand-made bidis were not subjected to excise duty before 1st March 1975. By Finance Act No. 25 of 1975, hand made bidis were included as excisable goods under the heading 'Other Bidis' in item No. 4-II(3)(ii) of the First Schedule to the Central Excises and Salt Act, 1944. The said bidis thus now come under the category of manufactured tobacco. The petitioner's contention was that the stock of manufactured bidis with it which existed immediately on 1st March 1975 was not liable to excise duty. This was not accepted by the Excise Authorities and demand notices were issued to the Petitioner. The petitioner paid under protest in all Rs. 13,158/- as excise duty. The petitioner then made an application before the Assistant Collector, Central Excise, for review which was dismissed by order dated 9th June 1975. The petitioner thereafter preferred an appeal to the Collector, Central Excise, which was dismissed on 21st April, 1976. The petitioner also field a revision which was dismissed by the Central Government on 19th March, 1977. The petitioner then filed this petition under Article 226 of the Constitution challenging the aforesaid order.
2. The argument of the learned counsel for the petitioner is that the Bidis must be taken to be fully manufactured when they were packed in Pudas and that it was not necessary for completing the manufacture of bidis that they should have been packed in unit containers or pitaras.
3. Section 2(f) of the Act defines 'manufacture' to include any process incidental or ancillary to the completion of manufactured product. Clause (ia) of Section 2(f) further clarified that in relation to manufactured tobacco, manufacture included the labelling or re-packing from bulk packs to retail packs or the adoption of any treatment to render the product marketable to the consumer. The Assistant Collector in his order held that the packing of labelled bidis in unit containers was essential before they could be treated as fully manufactured. This was the reason why it was held by the Assistant Collector that the stock of bidis with the petitioner was liable to excise duty. The same view was taken by the Collector and the Central Government. The Collector in his order, after referring to the order of the Assistant Collector observed that the bidis were not ready for delivery because they were not packed in normal containers on 28th February 1975 in which they are normally delivered by the petitioner. It was also observed that this position was not disputed in appeal. The Central Government, in revision, held that the practice of bidi manufacturers is that bundles of labelled bidis are packed in unit containers before delivery to the customers. It was on this finding that the Central Government agreed with the findings of the Assistant Collector and the Collector that the stock of bidis was not in fully manufactured state on 28th February 1975. We are unable to accept the argument of the learned counsel for the petitioner that the bidis can be said to be fully manufactured when they are packed in pudas before they are packed in unit containers. Firstly the question as to what is the stage when the goods can be taken to be fully manufactured having regard to the practice in the trade is a question of fact and it has been specifically found by the Central Government that the practice is that bundles of labelled bidis are packed in unit containers before delivery. Secondly it appears from the order of the Collector that this position was not disputed before him. In the circumstances, we are unable to go into this question at this stage. On the finding that in accordance with the usual trade practice the manufacturers pack the bidi-bundles in unit containers before delivery to the customers, it is obvious that the stock of bidis with the petitioner could not be said to be fully manufactured in accordance with the definition contained in Section 2(f) of the Act. The Excise authorities were, therefore, right in charging excise duty on the same from 1st March 1975.
4, The petition fails and is dismissed, but without any order as to costs. The security amount be refunded to the petitioner.