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1978 (3) TMI 108 - HC - Central Excise
Issues:
1. Whether the petitioner company is liable to pay excise duty on the greases produced at their factory. 2. Whether the company's greases fall under the category of dutiable goods under the Central Excises and Salt Act, 1944. 3. Whether the company's greases are exempt from excise duty due to the process of production and the use of duty-paid excisable goods. Analysis: Issue 1: Liability to pay excise duty The petitioner company contended that they are not liable to pay excise duty on the greases produced at their factory, as they argued that the greases are made with duty-paid excisable goods, and no further duty should be imposed. The respondents, however, argued that excise duty is leviable on blended or compounded lubricating oils and greases. The court noted that the company had not paid duty on greases produced in 1975, claiming the levy was improper. Issue 2: Classification of greases as dutiable goods The respondents argued that the company's greases are manufactured by further processing of blended or compounded lubricating oils, which contain ingredients other than mineral oils. The court observed that the company's greases are produced with fats and chemicals, which fall under the category of "any other ingredients" as per the relevant tariff items. The court held that the greases are dutiable under the Central Excises and Salt Act, 1944. Issue 3: Exemption from excise duty The company contended that since they use duty-paid excisable goods in the production of greases, no further duty should be charged. They argued that they are entitled to credit under Rule 8(1) for the duty paid on the lubricating oils used in manufacturing greases. The court rejected this argument, stating that the company would receive necessary credit under the rules, and there is no justification for not paying duty on the greases produced. The court found that the company's greases are dutiable under the relevant provisions of the Act, and the company is liable to pay excise duty on the greases manufactured at their factory. The court discharged the rule and vacated all interim orders, with no order as to costs.
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