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TMI Blog1999 (7) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... er with the consent of the parties concerned. 2. W.P. Nos. 17458 17459/91 have been filed seeking for a writ of Certiorari to call for the records of the respondents and to quash the show cause notice C.No. V3905/15/68/91-Adjn., dated 1-11-1991 (in W.P. No. 17458/91) and C.No. V3912.31/15/67/91-Adjn., dated 30-10-1991 (in W.P. No. 17459/91) issued by the second respondent. W.P. Nos. 17460/91 has been filed seeking for a writ of Declaration to declare the Chapter Note-6 of the Chapter 39 of the Central Excise Tariff Act of 1985 as not valid in law and unconstitutional. 3. In support of the writ petitions, the petitioner herein has filed separate affidavits wherein they have narrated all the facts and circumstances that forced them to file the present writ petitions and requested this court to allow the writ petitions as prayed for. Percontra, on behalf of the respondents a counter affidavit has been filed rebutting all the material allegations levelled against them one after the other and ultimately they have requested this court to dismiss the writ petitions for want of merits. 4. Heard the arguments advanced by the learned Counsel appearing for the parties. I have perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m powder cepol powder needs no cooking and solution is readily prepared by sprinkling powder on cold or hot water under stirring. However, the petitioner company adopts different method to make the cepol solution to suit their requirements. Unlike ordinary gums the cepol solution spreads evenly leaving a film coating. Unwanted harshness normally produced by starches and gums is not with this product. Since by mechanical process the paper tubes are prepared, the petitioner company and like them several others in the industry are using cepol solution. The Central Excise Authorities are aware of the preparations of Cepol solution and captively consumed by the petitioner company in the manufacture of paper tubes ever since 1986. The authorities have all along accepted that preparation of cepol solution is not a manufacturing process. Since the cepol powder has to be used only by mixing with water, like cement and washable wall decorative paints, the authorities remained prudent till recently. However, after the Central Board of Excise fixed enhanced revenue target for the Madurai Collectorate, the Central Excise Authorities of Madurai Collectorate shedding all reasoning and legal basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Act, 1985 renders the said Chapter Note 6 unconstitutional and is liable to be struck down. The Chapter Note 6(b) that stipulates another incidence of excise duty on the solutions of bought cepol powder and PVA powder even though the same have suffered duty under Chapter Heading 39 at the hands of the manufacturers of the above powders is unconditional and contrary to the law laid down by the Supreme Court of India. The Sec. 1 of Central Excise and Salt Act, 1944 empowers the authorities designated under the Act to impose duties specified in the Schedule of the Central Excise Tariff Act, 1985 on the excisable goods which are manufactured at the rates specified. When the goods that have sustained excise duty have not undergone any further process or physical change and retain their physical properties, the Central Excise authorities have no authority in law to impose another incidence of duty on the very same Tariff Heading on the products which have already suffered an incidence of excise duty. Another incidence of duty cannot be levied again on the manufactured product under the very same Heading because of the charge of primary form, when the physical characteristics continue t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that, they did not observe any Central Excise formalities and had not discharged any excise duty on clearance of PVA solution. Consequently the officers seized the documents pertaining to manufacture and clearances of PVA solution, under a mahazar, on the reasonable belief that the same would be material evidence in the case. Inter alia it is also contended by the respondents that the said PVA solution is used for producing Kite Flying Thread, that as per Note 6(b) of Chapter 39 of Central Excise Tariff Act, Heading 3901 to 3914 shall cover all primary forms of the plastic conversion. In addition conversion of one primary form to another would amount to manufacture. Based on this principle conversion of PVA powder of PVA solution being conversion of one primary form to another would amount to manufacture. It is also their case that in the instant case, PVA powder (one primary form) is converted into PVA solution (another primary form) the activity of converting PVA powder, into solution would amount to 'manufacture' and the same is liable to be classified under Heading 3905.20 and subjected to appropriate duty of excise. They also contend that the fact of production and clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice is only a proposal and the Department is going to finalise the issue only after affording full and fair opportunity to the petitioner. Further even if any order against their interest is passed the petitioner has a right of appeal to the CEGAT which is effective since the said Tribunal is the highest fact finding authority can go into the facts and decide the issue. Therefore from the above aspects of these cases, I am of the clear view that since the petitioner herein has enough and effective remedies for redressal and they have not exhausted the case and have rushed to this court even at the stage of show cause notice itself. Therefore, I am not inclined to interfere with the matter at the stage of show cause notice itself. Thus I see no merits at all in these writ petitions. 10. Therefore for all the aforesaid reasons and in the facts and circumstances of the cases and also in view of my above discussions with regard to the various aspects of these cases and also in the light of the various decisions discussed above, I am of the clear view that the petitioner herein has failed to make out any case in their favour and that there is no need for any interference wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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