1995 (7) TMI 181 - HC - Central Excise

Summary

Issues:
1. Challenge to the order levying Central Excise duty on wooden railway sleepers and sawn sizes.
2. Determination of whether railway sleepers and sawn sizes are excisable goods.
3. Conflict of opinion between two coordinate Benches regarding the levy of Central Excise duty on wooden sleepers and sawn sizes.

Analysis:
1. The petitioner, M/s. Orissa Forest Corporation, filed a petition under Articles 226 and 227 of the Constitution of India seeking to quash the order dated 29-12-1989, which imposed Central Excise duty on wooden railway sleepers and sawn sizes manufactured and removed during a specific period. The petitioner contended that the goods in question were not excisable as they did not involve transformation of raw materials through the manufacturing process. However, the Opp. Party No. 1 disagreed, citing that the goods fell under Heading Nos. 44.02 and 44.03 of the Schedule to the Central Excise Tariff Act, 1985. The validity of this finding was challenged in the petition.

2. A previous Bench of the Court had determined in O.J.C. Nos. 4524, 2525, 4528, and 4529 of 1990 that railway sleepers and sawn timber were distinct marketable products falling under specific headings in the Central Excise Tariff Act, 1985. The Bench emphasized that legislative intent was crucial in determining the levy of excise duty on goods like wooden sleepers and sawn sizes. Another coordinate Bench had held in O.J.C. Nos. 3151, 3153, and 3154 of 1989 that timber produced through sawing did not attract excise duty, relying on a Supreme Court judgment. However, the subsequent Bench, aware of the conflicting opinions, declined to interfere with the Excise authority's decision to levy excise duty on railway sleepers and sawn sizes. The matter was deemed fit for consideration by a Larger Bench to resolve the conflict of opinions.

3. The conflicting opinions between the coordinate Benches regarding the levy of Central Excise duty on wooden sleepers and sawn sizes necessitated a referral to a Larger Bench for resolution. The disagreement stemmed from differing interpretations of legislative intent and the applicability of excise duty to goods produced through specific processes like sawing. The need for a comprehensive review by a Larger Bench was deemed necessary to provide clarity on the issue and ensure consistency in judicial decisions.