Govindan Nair, C.J. - The question raised by the six petitioners herein, who are engaged in the business of manufacturing or producing plywood, is whether the goods produced by them, which were admittedly chargeable to the duty of excise, should be classified as falling under clause (1) of item 16B to the First Schedule to the Central Excise and Salt Act, 1944, (in short the Act) or whether those goods should be classified under clause (ii) of item 16B to the First Schedule to the Act. The complaint, briefly stated, is that the goods in question have been classified as falling under both those items, one for the purpose of applying the rate of duty and the other for the purpose of applying the tariff value fixed for the goods. We shall explain this aspect by reference to S. 3(2) and the third column in the First Schedule to the Act, the charging S. 3(1), the power of exemption under rule 8 of Chapter III of the Central Excise Rules, 1944, dealing with levy and refund of and exemption from duty.
2. The charging section is S. 3(1) which is in these terms :
'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 rates, set forth in the First Schedule.'
3. The First Schedule referred to in the above sub-section deals with various items and those items are described in column 2 and the rates of duty for such items are specified in column 3.We are only concerned in this petition with item 16B, which we shall extract in full.
Item No. Description of Goods Rate of Duty
16B Plywood, Blackboard, Laminboard, Batternboard, Hard or Soft wall boards or Insulating board and Veneered panels : Whether or not containing any material other than wood; Cellular wood panels, Building Boards of wood pulp or of Vegetable Fibre, whether or not bonded with natural or artificial resins or with similar binders, and Artificial or reconstituted wood being Wood shavings, Wood ships, Saw dust, Wood flour or other Lingneous waste agglomerated with natural or artificial beings or other Organic binding substances in sheets, blocks, boards or the like -
(i) plywood for tea-chests when cut to size in panels or shooks and packed in sets,
(ii) All others 15% ad valorem.'
4. The rate of duty specified in the 3rd column of the First Schedule is subject to alteration by virtue of the power conferred on the Central Government under rule 8(1) and on the Central Board of Revenue in exercise of the limited power under rule 8 (2) in Chapter III of the Rules already referred to. We shall extract there rules as well.
8. Power to authorise exemption from duty in special cases - (1) The Central Government may from time to time by notification in the official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods.
(2) The Central Board of Revenue may by special order in each case exempt from the payment of duty, under circumstances of an exceptional nature any excisable goods'.
The rate of duty alone is not sufficient for quantifying the amount of duty payable by a person liable to charge of duty under the Act. S. 3(2) has therefore provided for the fixation of tariff value. It is necessary to read that sub-section as well as the next sub-section.
'3 (2) The Central Government may, by notification in the official Gazette, fix for the purpose of levying the said duties, tariff values of any articles enumarated, either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force.
(3) Different tariff values may be fixed for different classes or descriptions of the same article'.
We may pause here to mention that values to be fixed for the articles enumerated in the First Schedule. Such enumeration may be specific or may be under general headings it appears to us that sub-S. (3) of the section will have to be applied because there may be different classes or descriptions of the same articles. In regard to articles which are clearly specified in the First Schedule, specific valuation will have to be fixed. That is how the provisions have been understood by the Central Government, is evident from the two notifications, one bearing No. 148/1973 produced as Ext. P-12 along with the reply affidavit filed by the petitioners and the other No. 91 of the year 1975, Ext. P-3, produced along with the petition. In order to make matters clear we will also refer to the relevant parts of the notifications. The table given in Ext. P-12 runs thus :
Sl. No. Tariff value in Description rupees per square metre
1 2 3
1. Commercial Plywood -
(a) in area 5,625 square centimetres or less 3.50 (where the thickness is 4 millimetres)
(b) in area exceeding, 5,625 square 5.35 (where the centimetres thickness is 4 millimetres)
2. Plywood for tea chest 5.20
3. Non-decorative hardboards -
(a) Plain surface standard hard-boards 3.80 (where the thickness is 3 millimetres)
(b) Embossed hardboards 5.95 (where the thickness is 3 millimetres)
(c) Oil tempered hardboards 6.70 (where the thickness is 3 millimetres)
4. Insulation boards made from bagasse, 10.55 (where the thickness is 12 millimetres)
5. Insulation boards made from wood wool 1.60 (where the thickness is 4 millimetres)
Similar is the table in Ext.P-3 notification No. 91/1975.
Sl. Tariff value in No. Description rupees per square metre
(1) (2) (3)
1. Commercial Plywood -
(a) in area 5,625 square centimetres 6.00 (where the or less; thickness is 4 millimetre
(b) in area exceeding, 5,625 square 8.50 (where the centimetres thickness is centimetres 4 millimetres)
2. Plywood for tea chests when cut to size 7.50 in panels or shooks and packed in sets
3. Non-decorative hardboards -
(a) Plain surface standard hard-boards 6.25 (where the thickness is 3 millimetres)
(b) Embossed hardboards 9.25 (where the thickness is 3 millimetres)
(c) Oil tempered hardboards 9.00 (where the thickness is 3 millimetres)
4. Insulation boards made from bagasse, 15.40 (where the straw, jute waste or jute stricks, thickness is 12 millimetres)
5. Insulation boards made from wood wool 3.00 (where the thickness is 4 millimetres)
5. It will be seen from these tables that plywood for tea chests is treated different from commercial plywood; the former being charged at tariff value of Rs. 5.20 per square metre and the latter, commercial plywood, being charged at the rate of Rs. 3.50 per square metre, when the area is less than 5625 square centimetres and at Rs. 5.35 when the area exceeds 5625 square centimetres. The values have been charged actually enhanced by Ext. P. 3 notification No. 91/1975 - but the pattern is the same, though the latter notification is more precise in dealing with plywood for tea chests, and the description in this notification, of plywood for tea chests, is the same as that in column (2) item 16B (1) of the schedule. The description in the latter notification specifically mentions 'plywood for tea chest when cut to size in panels or shooks and placed in sets.' This is the next description in item 16B (i) of the schedule.
6. The tariff value of an item or a sub-item in the schedule, having been fixed, normally the rate of duty in column (3) of the schedule would have to be applied, unless exempted by a notification under rule 8 (1) of the Rules, by the Central Government. There has been a notification issued under rule 8(1) by the Central Government in regard to 'plywood for tea chests'. This notification is Ext. P-1 and serial number 1 is described as plywood tea chests and the extent of exemption under column 3 of the notification is 'duty in excess of 7 1/2 per cent ad valorem'. There has been a subsequent notification No. 189/72 dated 26th August 1972 by which the description in serial number 1, we just now read, has been altered and for the words 'plywood for tea chests' the words 'plywood for tea chests when cut to size in panels or shocks and packed in sets' were substituted. We do not think Ext. P-2 notification altered Ext. P-1 notification as regards the item 'plywood for tea chests' described therein. Ext. P-2 notification is only a clarification. By Ext. P-2 the words used in item 16B(1) of the schedule have been fully adopted in the notification of exemption. This not only clarifies Ext. P-1, but also indicates clearly what was meant by 'plywood for the chests' in serial number 1 of Ext. P-1 notification.
7. Having looked at the provisions which are necessary for determining the duty on the articles which are manufactured or produced by the petitioners, which is admitted to be plywood and plywood alone, and nothing else, one would have thought that the matter is simple and all that was required was to decide whether the goods produced by the petitioners fell under item 16B (i) or under 16B (ii) of the first schedule; the question which we posed at the beginning of the judgment. But unfortunately the determination of duty has given rise to a good deal of complications and the appeals taken against the modifications made to the lists filed by the petitioners in accordance with rule 173 B, by exercise of the power under S. 173B(2), turned futile. We shall read rule 173B (1) and (2);
'173B. Assessee to file list of goods for approval of the proper officer (1) Before removing any excisable goods, every assessee shall file with proper Officer for approval a list in such form as the Collector may direct, in quaruplicate, showing :-
(a) the full description, of (i) and all excisable goods produced or manufactured by him (ii) all other goods produced or manufactured by him and intended to be removed from his factory, and (iii) all the excisable goods already deposited or likely to be deposited from time to time without payment of duty in his warehouse;
(b) the item number and sub-item, if any, of the first schedule to the Act under which each such goods fall;
(c) the rate of duty leviable on each such goods; and
(d) such other particulars as the Collector may direct.
(2) The proper Officer shall, after such inquiry as he deems fit, approve the list with such modifications as are considered necessary and return one copy of the approved list to the assessee who shall, unless otherwise directed by the proper Officer, determine, the duty payable on the goods intended to be removed in accordance with such list.'
8. The list filed by the petitioners were modified by the 1st respondent and the modifications are evidenced by Ext. P-5 services, produced along with the petition. It is necessary to refer to the first item, serial number 1 in Ext. P-5 (a).
Sub Basic duty Auxiliary duty item
1 2 3 4 4a 5 6
1. Plywood for 16B 7 /2% of the tariff 10 percent Notification tea chests value of Rs. 5.20 basic 16/68 as when cut per square of duty as amended by to size in metre value as per notification panels or Rs. 5.20 per notification 189/72 shooks and square metre when No. 55/74 dated 26th packed in set the thickness in dated August 1972 (not approved 4 mm. fixed as per 1st March by I.S.I.) notification No. 1974 148/73 dated 21st July 1973, in case the clearance are direct to tea factories otherwise the plywood for tea chest shall be classified under 16B (ii) and appropriate rate of duty thereof but tariff value fixed for tea chest shall be adopted for assessment purpose.
9. The other exhibits in the series have followed the same pattern. When we look at the entry under column 4 we find that the tariff value of Rs. 5.20 fixed for the goods described as Plywood for tea chests' in Ext. P-12 notification under S. 3(2) was to apply 'in case the clearance are direct to tea factories.' In such cases the duty was to be 7 1/2 per cent in accordance apparently with the notification issued under rule 8 (1) by the Central Government, which is Ext. P-1. The insistence that for the particular commodity of goods the rate of duty prescribed by the Schedule and exempted by Ext. P-1 would apply only in case the clearance is direct to tea factories is an addition made by the 1st respondent apparently under instructions from the Board of Revenue. The duty of excise is a duty on production or manufacture. Normally the destination of the goods or the persons who buy it or the use to which such goods are put by the purchaser are not material in determining the duty. Whatever that be, the Act and the Schedule to the Act, and the relevant statutory notifications fixing the tariff value, and granting exemption have not attached any importance to the destination of the goods. The only question that can arise therefore is whether the goods produced are identifiable and could be classified as calling under item 16B (i). We think, therefore, the addition of the words 'in case the clearance are direct to tea factories' is quite unjustified. When we consider the further statements under column 4 it appears to us that the provisions of the Act and the Rules have been forgotten and a method has been adopted which is opposed to the scheme and the provisions of the Act and the Rules and notifications. What is stated is that in case the clearance are not direct to tea factories the plywood for tea chests' shall be classified under item 16B (ii), i.e.'any other'; necessarily any other plywood. Having said so, it is further stated that the duty will be duty applicable to goods that will fall under item 16B(ii). Apart from the fact that a classification based on the destination of the goods is thoroughly unwarranted, having brought the goods by what we may call 'the destination principle' under item 16B (ii) to state that this was only for the purpose of the 'appropriate rate of duty but tariff value fixed for tea chest shall be adopted for assessment purposes' would be the adoption of a procedure not sanctioned by the Act and the Rules and the notifications. The scheme of the Act and the provisions in the charging section and the purport of the levy and the destination sought to be made in relation to various goods in the case of imposition of excise duty and the different rates of duty prescribed for different classes of goods and different tariff value for different items will have to be borne in mind. There cannot be a case where specified goods come under two items in the schedule. Item 16B(i) is a specified item. Either the goods will fall under that or not. If the goods do not fall under item 16B(i) then the goods will have to fall under item 16 B(ii) and that for both purposes of tariff value and rate of duty. To treat plywood for tea chests as coming under item 16B(ii) by applying the destination principle itself is wrong and having brought it under item 16B (ii) to apply the tariff value for plywood for tea chests would be to treat the particular goods as falling under both sub-clauses of item 16B. What has been done is to classify the goods claimed by the petitioners to be 'plywood for chests' merely on the principle of destination under 'any other' item 16B(i) for the purpose of applying the higher tariff value. Thus the higher rate of duty under item 16B(ii) as well as the higher tariff value under item 16B(i) have been applied to the same goods. This we think is patently wrong and an illegal procedure.
10. Counsel on behalf of the Revenue contended at the initial stage that we should dismiss this writ petition on the ground that another remedy was available under S. 36 and on the ground that there has been delay in filing this petition and on the further ground that some memorandum has been filed before the Central Government which is under consideration of the Central Government, and on the final ground that Ext.P-1 notification having been issued by the Central Government, and the revisional power under S. 36 being vested in the Central Government, it is the Central Government that should first consider the notification, Ext. P-1. We deferred consideration of these aspects in order to clarify the question raised in this petition. After all there is no Alaska in which a writ under Article 226 will not run. Whether the jurisdiction should be exercised would depend upon a variety of factors. One of the aspects to be considered is whether the act or the order complained of is patently wrong and illegal and without jurisdiction. If the error is patent and the act complained of was done without jurisdiction and the remedy under the statute is neither expeditious or adequate this Court should and must interfere. The power of revision is not as wide as an appellate power, is well established. We have been warned that this Court should not exercise its jurisdiction under Article 226 of the Constitution when there is another remedy available. It was so said only very recently by this Court in the judgment in O.P. No. 6662 of 1975. But there is no rule that whenever there is another remedy there should be no interference at all. In view of the assertions that are contained in paragraph 14 of the counter-affidavit, that the Central Board of Excise and Customs have issued executive instructions and this has been repeated in paragraph 19 of the counter-affidavit, it appears that the view has been taken by the authorities who have to function under the Act that it is the procedure adopted in Ext. P-5 series that should be adopted. One cannot expect the Central Government to function without advertence to and without relying at least to some extent on the views of its own Central Board in this matter of classification regarding which they seem to have issued specific instructions as stated in more than one place in the counter affidavit. We do not think that in the circumstances the remedy under S. 36 would be a bar for exercise of jurisdiction under Article 226 of the Constitution. Nor are we impressed by the argument that there has been delay in filing this O.P. This petition was filed on the 11th of November last year. The petitioners had applied from the classifications evidenced in Ext. P-5 series and those were rejected by Ext. P-7 series.Those orders were dated 17th of July 1975. Those orders, it is admitted by counsel, were received by the petitioners before the end of July. So going by the rule of 90 days which we have been following as a convention in this Court this petition should have been filed before the end of October, but they have been filed only on 11th of November. We notice however that the orders Ext. P-7 allowed 180 days for taking the revision before the Central Government we must also mention that fresh modified lists were issued by the 1st respondent as evidenced by Ext. P-9 series only in August 1975. Counsel submitted that the petitioner who belongs to an association required time to consider the next step to be taken, week and get legal opinion and then get the petition prepared and took longer time than 90 days from the dates on which Ext. P-7 orders were passed and that they have filed the petition within 90 days of the issuing of the fresh list Ext. P-9. We are not prepared to say that in all the circumstances of the case the delay is such that we should decline to exercise jurisdiction under Article 226. The memorandum cannot stand in the way of exercise of jurisdiction by this Court. Nor are we convinced that the fact that the notification under rule 8 (1) was issued by the Central Government necessitates the matter being dealt with by any difficulty whatever in understanding this notification, Ext. P-1, even without reference to Ext. P-2. Ext. P-1 even without reference to Ext. P-2 must necessarily and clearly refer to item 16B (i) of the schedule. The notification under S. 8(1) was issued fixing the tax payable on a specified item. No question of interpretation of that notification arises in the case.
11. In the appeal, as is evidenced by Ext. P-6 series, a specific contention had been raised that the goods cannot be brought under both items 16B (i) and (ii), one for the purpose of applying the higher tariff value and the other for the purpose of applying the higher duty. Curiously this matter was not adverted to or considered or dealt with in Ext. P-7 series. As we indicated earlier, in making modifications, new conditions have been imposed by the 1st respondent in Ext. P-5 series based on destination of the goods. All these circumstances we have no alternative but to exercise jurisdiction under Article 226 of the Constitution and to quash the appellate orders. Ext. P-7 series, the modified lists Ext. P-5 series and the latest lists Ext. P-9 series.
12. We make it clear that we express no opinion whatever as to whether the goods produced by the petitioners fall under item 16B (i) or 16B (ii). This is a matter to be considered by the authorities under the statute and we leave it to them. In this connection we would like to add that a contention has been raised before us, and only before us, because his aspect has not been mentioned either in the modified lists Ext. P-5 series or the latter lists Ext. P-9 series or in the appellate orders passed by the 2nd respondent, Ext. P-7 series, that the goods will not fall under item 16B (i) because the goods did not conform to the standards prescribed by the Indian Standards Institution constituted by the Indian Standards Institution (Certification Marks) Act, 1952. The petitioners have produced as Exts. P-10 and P-11 the specification for tea chests prescribed by the Indian Standards Institution. Whether have any relevancy in determining whether goods fell under item 16B(i) or not is a matter for the authorities to decide. All that we would like to point out is that these specifications do not adhere to any rigid standard size because various sizes are mentioned and what is to depend on the requirements of the purchaser. Whether these specifications should be applied and if applied whether it could be said that goods will fall or will not fall under item 16B (i) are matters to be considered by the authorities. We allow this petition and set aside. Ext. P-9 series, Ext. P-7 series and Ext. P-5 series. Fresh modified lists should be prepared and duty payable determined in the light of what we have stated in this judgment. There will be no order as to costs.