M.N. Roy, J.
1. The petitioner Tide Water Oil Company (India) Limited (hereinafter referred to as the said Company), is a Company incorporated under the Indian Companies Act, 1913 and an existing Company under the provisions of Companies Act, 1956 and has its registered office at Clive Row, Calcutta. That apart, for the purpose of its business the said Company has a factory at 109, Foreshore Road, Howrah, which is also registered as a factory under the Factories Act. It has been alleged that in the said factory no manufacturing process is carried on and in fact the said Company in that factory carries on blending or processing only.
2. It further appears that at the said factory of the said Company makes or manufactures lubricating oils by further processing of blended or compounded lubricating oils purchased from open market. These lubricating oils being excisable goods under the provisions of Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act), it has been stated that excise duty on such lubricating oils are duty paid before they are put to sale in open market and in fact it has been alleged that prior to the necessary purchase of such lubricating oils by the said Company, the duty on them are required to be paid and, in fact, they are paid. The said Company has further stated that their processing involves ad-mixture of additives (which are not 'ingredients' within the meaning of Item 11B of the First Schedule under the said Act. Since a reference to Items 11, 11A and 11B of the Schedule will have to be made, these are quoted hereunder ;
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3. As stated hereinbefore, it has been contended that the products of the said Company, which is Grease, and is produced by the admixture of additives which are not 'ingredients' within the meaning of the items as above, so such products could not come under any of the items and as such no tax could be levied on them considering them thereby to fall within various grades of lubricating oils as mentioned in the said items, It has been stated that despite the admixture of additives with the excisable goods like lubricating oils produced by the said Company are not liable for or required to be charged to excise duty under the aid Act since asphalt and blended or compounded lubricating oils which are compounded to make their products, as stated hereinbefore have already been charged to excise duty and necessary duty has also been duly paid before being sold in the market. In support of such contentions, the said Company relied on notices or directions dated December 24, 1973, June 3, 1974, August 27, 1974 and April 29, 1976 being Annexures 'A' to the petition.
4. It is the categorical case of the said Company that grease produced by them are of two varieties viz., (a) asphalt base grease for which asphalt is used and (b) scap base grease for which blended or compounded lubricating oil is used, and both the said varieties of greases are made at their factory premises by processing asphalt or blended or compounded lubricating oils. The said Company has categorically stated that asphalt and blended or compounded lubricating oils used by them are excisable goods under Items 11 and 11B above and as such excise duty has already been paid in respect of those goods at the manufacturing point and before purchase by them from the open market. They have further and categorically stated that in the course of processing, no other ingredients as contemplated under Item 11B as mentioned above, are blended and/or compounded and/or used by them. It is the definite case of the petitioner that greases produced by them are not obtained by straight blending of minerals oil i.e., blending of mineral oil with oil or blending or compounded of mineral oils with any other ingredients and contemplated under Item 11B as above. They have also mentioned that their products are not derived by processing, as contemplated under Item 11A of the Schedule. It has been alleged that the greases produced by the said Company with the duty paid excisable goods, cannot be subjected to further excise duty on the same principle as the lubricating oils made by them with the duty paid excisable goods are not chargeable or liable for excise duty. In short, the said Company has contended that their resultant product obtained by processing of duty paid excisable goods, is not covered by any of the Tariff Items specified in the First Schedule to the said Act and as mentioned hereinbefore. In particular, they have mentioned that no manufacturing is done by them in their factory premises.
5. It has been alleged that in respect of the aforesaid product the relevant authorities, who are respondents herein, started demanding payment of excise duty from 1973 and such act in the facts of the case, has been contended to be illegal and wrongful, as the said Company has alleged that in view of the process followed by them, for obtaining greases, they are not required to be paid or chargeable to any tax under the said Act or the Tariffs thereunder. There is no doubt that the said Company has paid the demand but they have contended that such payment was not voluntary, but was made under compulsion and without prejudice, on the bona fide belief that the excise duty as paid would be refunded after the necessary decision is obtained by the respondents concerned from the appropriate authorities. It appears that the said Company made repeated representations before the appropriate authorities, who are respondents herein, contending amongst others that they are not liable to pay excise duty in respect of their products of greases. It has been alleged by the said Company that even inspire of such and due representations, the respondents concerned have not considered their prayer and are not willing to consider them and in fact they have at all material time maintained and are still maintaining that the greases produced by the said Company are liable for excise duty. It is also an admitted fact that the said Company has not paid such duty on the greases as produced during 1975, as according to them the levy or demand as made was improper and no duty was payable.
10. The answering respondents in their return to the rule have mentioned that Central Excise Duty is leviable on blended or compounded lubricating oils and Greases, under the provisions of section 3 of the said Act, read with Item 11B of the First Schedule as referred quoted herein before. They have contended that the products of the said Company viz., blended or compounded lubricating oils and Greases are manufactured by a further process of blended or compounded lubricating oils i.e. processed minerals oils with any other ingredients. It has been contended that the term 'any other ingredients' means ingredients other than mineral oils. Those respondents have stated that other ingredients which are used by the said Company for the manufacture of its products are fats and chemicals to a substantial extent. It has been' mentioned by the respondents that with effect from June 1, 1960, a special procedure known as self removal procedure was introduced by Chapter VII of the said Rules framed under the said Act and Rule 173B, under the said Chapter provides that :
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13. These apart, it has been contended by the answering respondents that the instant writ petition is mis-conceived, baseless, untenable and is not maintainable. They have alleged that the writ in the instant case has been taken in gross abuse of the process of law and for delaying the payment of the legitimate Government revenue. They have also alleged that since a thorough investigation into the facts and the process of the manufacture of grease is required, and which are in dispute between the parties, this Court should not in this jurisdiction make any interference.
14. Mr. Pritimoy Datta appearing in support of the Rule, after placing the relevant facts as mentioned hereinbefore, submitted that since no manufacture as understood is carried on by the said Company at their factory premises at Howrah and in fact their product viz., grease and when in fact the grease as made or produced by the process as mentioned hereinbefore, is not dutiable or leviable to any duty, the action as taken by the respondents concerned was improper and void. That apart, it was also submitted by him that since the grease in the instant case is produced by the said Company with the help, aid and assistance of lubricating oils as mentioned hereinbefore on which duty has already been paid, the levy as made on the said Company was also improper. To substantiate the arguments, Mr. Dutt reiterated the stand of the said Company and their submissions as referred to hereinbefore, and submitted further, that the plea of other remedy as a bar to maintainability of the present petition, would not be available to the Respondents, because on a reference to the correspondence in Annexure 'A' to the petition, there would be no room for doubt that all concerned were determined and in fact fiery had made up their mind to impose the duty in the instant case even before hearing or deciding the relevant objections as were raised by the said Company. He submitted that when mind Was already made up in that biased form and prejudicial manner, then certainly the said Company can claim to maintain the petition, as it is evident that they could not expect to get any relief or redress and justice from the authorities concerned, who incidentally, were superior authorities and entitled to hear the representation in this case. It was argued by Mr. Dutt, reference to the provisions in sections 2(d), 3 and Items 11, 11A and 11B as mentioned hereinbefore, that the product of grease of the said Company, because of the manner of production or the process of manufacture, was not liable to any levy of duty and in any event, the said Company could not be taxed as they would neither come under Item 11A or 11B. He also submitted that the provisions of Rule 173B(2) would have no application in the instant case and as such the arguments made by the respondents, on that basis, would be of no avail or assistance.
17. On the ground of non-maintainability of this proceeding for availability of other remedy as argued by Mr. Sen, I am of the view that such other remedy, in the facts and circumstances of the case, and the more so when the superior authorities appear to have made up their mind and practically expressed their views however remotely, would not be a bar and as such this application, even at the present stage, would be maintainable. When the said Company has the feeling that they might not get justice from the superior authorities concerned and such claim can be justified from the attending circumstances, then no useful purpose would be served by holding the application to be not maintainable on such ground. So I hold the application to be maintainable in the peculiar facts of the case, even inspire of the fact that other remedies were and are available under the said Act. .
18. On merits, the point for consideration would be whether the resultant product of the said Company, which is Grease arid obtained by processing of duty paid excisable goods, would be dutiable. It is not in dispute that the said Company produces Grease, one of which is Asphalt based and the other is soap based, by using blended or compounded lubricating oil, for which excise duty has already been paid at the manufacturing point and at the time of or before purchase by them and in fact it has been alleged that the Greases as produced by the said Company, are not obtained by straight blending of mineral oils i.e. blending of mineral oil with oil or blending of or compounding of mineral oil with any other ingredients as contemplated under Item 11B and the products are not derived by processing, in terms of Item 11A as mentioned above. It is also an admitted fact that the said Company produces such product of Greases with fat and chemicals to a substantial extent and as such, it cannot but be held that they, for such product of Greases, are using materials which would come within the words 'any other ingredients' as mentioned in Item 11B and as such duty is liable to be paid on such product of Greases in terms' of section 3 of the said Act, read with Item 11B as mentioned above. The arguments of the said Company that they are not covered by Rule 173B cannot also be accepted and in fact prior to the imposition of duty as involved in this case, they had themselves conducted or acted under the terms of the said Rule 173B.
19. These apart, the contentions of the said Company that they are not required to pay any duty on their product of Greases for the manner of its production or for the use of blended or compounded lubricating oil, purchased from open market, which are excisable goods and in fact excise duty on them has already been paid prior to their purchase, appear to be without any effect or assistance, because for the use of such excisable commodities for which relevant duty has been paid, the said Company is getting or will get necessary credit in terms of the notification under Rule 8(1) as referred to hereinbefore and on which, the answering Respondents have placed strong reliance. Considering the effect of these notifications, it appears to me that there is no question or any occasion for paying duty more than once, and in fact the concerned manufacturer would be getting facilities of proforma credit in respect of duty paid on blended or compounded lubricating oils and Greases used in the manufacture of finished, blended or compounded lubricating oils and Greases and that too at the confessional rate of 13% ad valorem. The cases as cited by Mr. Dutta, in my view are distinguishable on facts and in terms of the decision in the case of Union of India v. Delhi Cloth and General Mills Co. Ltd. 1977 - E.L.T. (J 199), the duty as levied was authorised, as duty is on the manufacture of goods and not on sale and the more so when in fact the said Company produce Greases which is also sold in the market as such.
20. In view of the above arguments of Mr. Dutta, excepting on those relating to other remedy fail, so also the Rule. The same is as such discharged and all interim orders are vacated. There will be no order as to costs.