K.L. Roy, J.
1. No amount of ingenious arguments by the learned Counsel for the respondents could convince me that this application should be rejected on any of the grounds urged by him. The petitioner, Dalhousie Jute Co. Ltd., is a well-known company owning and manufacturing jute goods in its miffs at Champdani in the district of Hooghly. In 1960 a plant for the production or laminated jute goods by processing jute cloth or bags with waterproof polythene coated paper, gum tapes and other packaging items was installed in the petitioner's mill premises. It is claimed in the petition that this Converter Division was an entirely separated and segregated unit from the petitioner's jute mills but this is streneously denied in the affidavit-in-opposition where it is claimed that the said Converter Unit is situated within the petitioner's jute mills premises, having the same entrance and exit and was part of the said mills. The petitioners claims that for the purpose of processing jute goods in its Converter Plant, it used to obtain supplies of such jute goods from other jute mills and also took such jute goods from its own mills at Champdani. By Section 16 of the Finance Act, 1962 Entry 22A was introduced in the First Schedule to the Central Excises and Salt Act, 1944. The said item was as follows:--
22A.-- Jute manufactures (including manufactures of bimplipatam jute or of mesta fibre), all sorts of
(i)hessian....Rs. 250 /- per metric tonne (since increased to Rs. 450/-);
(ii)all other descriptions of jute manufactures not otherwise specified (including cloth bags, twist yarn, rope and twine)..Rs. 125/- per metric tonne (since increased to Rs. 250/-).
2. The petitioner's case is that since, the imposition of Excise Duty on Jute manufactures it had been purchasing jute goods from other mills on which Excise Duty had already been paid. So far as supplies obtained from the petitioner's own mill were concerned. Excise Duty was being paid on the same being transferred from the petitioner's jute mill to the Converter Unit.
3. Disputes and differences arose between the petitioner and the Central Excise Collector as to whether Excise Duty was payable on the laminated jute goods produced by the petitioner in its Converter Unit. An order in writing dated the 21st November, 1903 No. VI-Jute-21-4-62/12508, was addressed, inter alia, to the petitioner describing the subject of the communication as 'jute manufactures -- lamination of jute manufactures in the Converter Division of Messrs. Dalhoushie Jute Mills.' By the said order the petitioner was intimated, inter alia, that the Converter Division being located on the same floor and under the same roof as the spinning and weaving and other departments of the petitioner's mills and both having a common entrance and exit, the petitioner's contention that the Converter Unit was a distinct and separate manufacturing department could not be accepted. The petitioner was further referred to an order of the Collector of Central Excise, West Bengal dated the 21st February, 1963 wherein it had been ordered that if special treatment, such as, lamination or polythene lamination of jute cloth was done within the factory of manufacture and if the weight of jute in such product was not less than 40 per cent, of the total weight, duty would be charged on the basis of the weight of the laminated products. The petitioner was accordingly informed that so far as the laminated jute goods produced from jute supplied by its own mills duty would be charged on the basis of the weight of the final produce after lamination. So far as the jute cloth brought from other mills for lamination was concerned two options were offered to the petitioner, namely,
(i) The petitioner could bring the clothin bond in which case it would have to payduty on the total weight of the laminatedcloth on its clearance from the DalhousieJute Mills, or
(ii) The petitioner might bring the cloth from other mills on payment of duty in which case no further duty would be chargeable after the cloth had been laminated.
The choice was left entirely to the petitioner. In the final paragraph of the said order the petitioner was notified that if it felt aggrieved by the order it could file an appeal to the Collector of Central Excise, West Bengal, Calcutta within three months under Section 35 of the Central Excises and Salt Act, 1944. This letter was signed by Sri K. L. Rekhi, Assistant Collector. The petitioner did file a petition of appeal against the aforesaid order to the Collector of Central Excise, Calcutta which was summarily rejected by the Collector by his order dated the 3rd June, 1964 on the ground that he saw no reason to interfere with the order of the Assistant Collector. The petitioner was further notified that a revision lay from the appellate order to the Central Government under Section 36 of the Act. The petitioner did file a revision application dated the 1st July, 1964 to the requisite authority, viz., the Ministry of Finance (Department of Revenue) and by its order dated the 11th February, 1965 the revision application was also summarily rejected. By a notification dated the 20th March, 1965 made under Rule 8 (1) of the Central Excise Rules the Government of India exempted laminated jute products from so much of the -duty leviable thereon as was in excess of the duty payable on unprocessed jute manufactures used in the manufacture of jute products. The said notification came into effect from the 20th March, 1965. A notice of demand dated the 9th October, 1967 for a total sum of Rs. 6,40,068.01 was demanded from the petitioner towards Central Excise Duties (basic 'and special) on the differential weight of the jute manufactures received from outside and cleared after lamination during the period from 11-1-63 to 19-3-65. This notice of demand was purported to have been made under Rule 10A of the Central Excise Rules, 1941. Annexed to the aforesaid notice was a chart showing how the amount of this demand has been calculated. The chart showed the various items, such as D. W. tarpaulin, hessian, sacking etc. which had been taken for lamination, the rate at which the duty had been paid, the weight of the quantity obtained after lamination, the gain in lamination on which duty is chargeable arid then there are details as to the basic, special and the total amount of duty. In the fifth column with the heading 'Gain in Lamination' the difference between the weight of the laminated product and the weight of the jute manufactures purchased from outside mills is shown and the duty is charged on this difference in weight. Various representations were made by the petitioner against the aforesaid demand which were unsuccessful and ultimately a letter demanding justice was sent by its solicitors,Messrs. Fowler and Co., to the Excise authorities on the 20th May, 1968 and this Rule was obtained from this Court on the 28th May, 1968 calling on the respondents, the Union of India (through the Collector of Central Excise, Calcutta), the Assistant Collector of Central Excise, Calcutta and the Inspector of Central Excise stationed at the mill premises of the petitioner to show cause why the respondents should not be prohibited from giving any effect to the purported notice of demand dated the 9th October, 1967 and from taking any further steps or proceedings in furtherance of or in pursuance of the said notice and also why the purported notice of demand as well as the decision dated the 30th March, 1960 rejecting the petitioner's representation against the aforesaid demand should not be quashed.
4. In the affidavit-in-opposition filed on behalf of the respondents by Sri Gopaldas Chatterjee, the respondent No. 2 herein, the allegation in the petition that the petitioner's Converter Division was situated in a separate premises from its jute mills has been strenuously denied and as already stated by me hereinbefore and as mentioned in the order of the Assistant Collector the assertion that the two units were really situated in the same premises has been reiterated. It has been further submitted that the purported order dated the 21st Nov. 1963 was in the nature of executive instructions, that the Assistant Collector had no statutory authority to pass an order exempting any product from excise duty, that the proper authority to make such an order was either the Central Government or the Collector and as such the aforesaid notification or order had no binding effect. It is further contended that prior to the exemption granted by the Statutory Notification dated the 20th March, 1965 laminated jute products continued to remain jute manufactures and were accordingly dutiable under Item 22A. It is also contended that the alleged direction contained in the said purported notice of the 21st November, 1963 could not override the provisions of the Statute and of the Rules and Notifications made thereunder. It is further submitted that Rule 10 presupposes a levy of duty or original assessment, but in the instant case there has been no such levy or assessment on the petitioner in regard to the goods on which differential duty has now been demanded and as such the residuary power under Rule 10A has been correctly invoked. In any event if reference to Rule 10A is erroneous, then the Notice could not be bad because reference has been made to a wrong provision and Rule 10 should be held to be applicable.
4A. In addition Mr. G. P. Kar learned Counsel for the respondents, has taken two further objections to the maintainability of the petition namely, (i) that as disputed questions of fact have been raised this Courtwould not go into such questions in a Writ Jurisdiction but would refer the parties to a regular suit, and (ii) that as the Act provides adequate alternative remedy by way of appeal and revision against a Notice of Demand the petitioner should not be allowed to take recourse to the extraordinary Writ Jurisdiction of this Court without availing itself of such alternative remedy.
5. Mr. Chatterji's reply thereto amounted shortly to this: There is no question of disputed facts so far as the present petition is concerned, because the petitioner is no longer challenging the imposition of duty on the total quantity of laminated jute goods produced from jute cloth or other jute manufactures supplied from its own mills. It is only challenging the demand in respect of the differential duty, namely, the duty on the difference in weight caused by the process of lamination and there are no disputed Facts so far as the contentions in this petition are concerned. This part of Mr. Chatterji's argument must be accepted. So far as the other initial defect as to the maintainability of the petition raised by Mr. Kar, namely, that the petitioner has not availed itself of the alternative remedy provided in the Act by way of appeal and revision reliance was placed on the decision of the Supreme Court in Union of India v. T. R. Verma, : (1958)IILLJ259SC where it was observed that it was well settled that when an alternative and equally efficacious remedy was open to a litigant he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a high prerogative Writ. It was also observed in that case that the existence of an alternative remedy did not affect the jurisdiction of the Court to issue a Writ, but it was a thing to be taken into consideration in the matter of granting Writs. What are the facts in the present case? The petitioner has already gone up on appeal to the Collector and also on revision to the Central Government against one part of the purported order of the Assistant Commissioner dated the 21st November, 1963, and his appeal and the revision application have been summarily rejected. The petitioner has also made a large number of representations to the different authorities against the Notice of Demand but without any success as would appear from the letter dated the 30th March, 1968 from the Assistant Collector of Customs being Annexure 'H' to the petition. It is, therefore useless to require the petitioner to again go up on appeal and further revision against the impugned demand. In this case, in my opinion, the Court would be amply justified in exercising its discretion to issue high prerogative writs if otherwise satisfied.
6. The real question in issue in this case is whether in processing jute cloth or jute fabrics by lining them without polythene and other plastic material or bitumen thepetitioner was manufacturing any jute goods within the meaning of Item 22A of the first Schedule to the Central Excises and Salt Act. The Item itself gives some examples of what is meant by jute manufactures, such as, hessian, jute cloth, bags, twist, yam, rope and twine as also fibres made from raw jute, I have myself examined the so-called polythene laminated jute cloth, samples of which have been produced for my inspection. Comparing these to a piece of plain jute cloth it appears to me that what has been done is that a coating of some plastic material or some tar product has been put on one surface of the jute cloth in the same way as cotton fabric is attached to the surface of rubber sheets to strengthen and reinforce them. It looks to me as if some polythene or plastic sheets have been stuck with adhesives to the surface of the jute cloth. While such adhesion would undoubtedly add to the weight of the finally manufactured product can it be said that by this process some new jute goods have been manufactured? Mr. Kar drew my attention to the decision of the Supreme Court in S. B. Sugar Mills v. Union of India, : 1973ECR9(SC) , where the question whether gas produced by lime kilns used in manufacturing sugar and Soda ash could be charged with excise duty came up for consideration. At p. 928 (para. 14) the Court observed:--
'The Act charges duties on manufacture of goods. The word 'manufacture' implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. The duty is levied on goods. As the Act does not define goods, the Legislature must be taken to have used that word in its ordinary dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold, and is known to the market.'
Mr. Kar pointed out that in paragraph 2 of the petition the petitioner itself has described the finished product after the process as polythene laminated jute cloth or bags. Therefore, a new product has been brought into existence from the raw material, i. e., jute goods and as such the new product attracted the duty. Mr. Chatterji, on the other hand, relies on the same observations for his contention that the so-called process has not changed the character of the goods so as to transform it into a new and different article. They continue to be jute cloth covered with a coating of polythene or tar. Even if it could be said that by the process new goods had been manufactured for which there is a market, such manufacture is not a manufacture of jute products or jute goods. In my opinion, this contention of Mr. Chatterji must be upheld. Merely coating jute cloth or jute fabric with a solution wouldnot change the character of the product and transform it into another product which can also be described as a new manufacture of jute goods. It is undoubtedly a manufacture of new goods or new kind or goods but it is not a manufacture of jute goods. What is, therefore, being charged under the impugned notice of demand being the difference in weight of the laminated jute goods and the raw jute goods, is the weight of the materials used for lamination, that is, polythene, gum tape and other adhesive materials used for making the coating. No duty is chargeable on such materials. The authorities are trying to do indirectly what they could not do directly, namely, charge excise duty on articles used for laminating jute products.
7. In the view I am taking, it is not necessary to decide the other questions that were raised, namely, whether Rule 10 or Rule 10A was applicable in this case and whether the petitioners were entitled to raise any objections without applying under Rule 9.
8. In my opinion, no Excise Duty is chargeable in respect of the differential weight, i. e., the weight of the materials used for lamination as has been done in the impugned notice and the notice must be quashed as being without authority of law.
9. The Rule would be made absolute.
10. There would be a Writ of Certiorari quashing the impugned notice of demand and a Writ of Mandamus and Prohibition directing the respondents to forbear from giving any further effect to the said impugned notice. There will be no order as to costs.