Madras High Court
M/S.Anguvilas M.V.Muthiah ... vs The Assistant Director on 19 April, 2021
W.P.Nos.26966 to 26968 of 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 19.04.2021
CORAM
THE HONOURABLE MR.JUSTICE S.M. SUBRAMANIAM
W.P.Nos.26966 to 26968 of 2008
and M.P.Nos.1 to 3 of 2008
and W.M.P.Nos.2008 of 2016 & 30728 of 2019
M/s.Anguvilas M.V.Muthiah Pillai (Firm),
Partnership Firm, Rep., by its Partner,
Cellamuthiah,
No.21 (Old No.69), Chinniah Puram,
Dindigul-624 001. .. Petitioner in all W.Ps.
-vs-
1.The Assistant Director,
Directorate General of Central Excise Intelligence,
Chennai Zonal Unit, C-3, 'C' Wing, II Floor,
Rajaji Bhavan, Besant Nagar, Chennai-600 090.
2.The Chief Commissioner of Central Excise,
Central Revenue Building,
1/37, Race Course Road,
ATD Street, Coimbatore-641 018.
3.The Commissioner of Central Excise,
Central Revenues Building,
Madurai-625 002.
4.The Assistant Commissioner of Central Excise,
Dindigul I Division,
30, Mengles Road, Dindigul-624 001.
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W.P.Nos.26966 to 26968 of 2008
5.The Superintendent of Central Excise,
Dindigul II Range,
2/75, N.G.G.O. Colony, Dindigul-624 005.
6.The Customs, Excise and Service Tax
Appellate Tribunal,
Shastri Bhavan Annexe Building,
1st Floor, No.26, Haddows Road,
Chennai-600 006. .. Respondents in all W.Ps.
[R6 – Impleaded vide order dated 19.04.2021 in W.M.P.Nos.2007,
2009 & 2010 of 2016 in W.P.Nos.26966 to 26968 of 2008]
W.P.No.26966 of 2008 :- Petition filed under Article 226 of the
Constitution of India praying for issuance of Writ of Declaration declaring
to that effect that the product “chewing tobacco” that of the petitioner does
not fall within the ambit of manufacture as defined under Section 2(f) of the
Central Excise Act, 1944 Section Notes, Chapter Notes and Tariff Heads
and hence not an excisable product.
W.P.No.26967 of 2008 :- Petition filed under Article 226 of the
Constitution of India praying for issuance of Writ of Mandamus, directing
the respondents more particularly the 2nd, 3rd and 4th respondents to refund
Rs.2,00,000/- which has been credited on 25.10.2008 as directed by the 1st
respondent.
W.P.No.26966 of 2008 :- Petition filed under Article 226 of the
Constitution of India praying for issuance of Writ of Mandamus directing
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W.P.Nos.26966 to 26968 of 2008
the respondents more particularly the 2nd, 3rd and 4th respondents to de-
register of the Registration Certification No.AAEFA 6138 XM 001 as
applied on 31.10.2008.
For Petitioner : Mr.M.N.Bharathy
(In all W.Ps.) for Mr.S.Muthuvenkataraman
For R1 : Mr.V.Sundareswaran,
(In all W.Ps.) Senior Panel Counsel
For RR2 to 5 : Mr.A.Srinivas,
(In all W.Ps.) Senior Standing Counsel
For R6 : Tribunal
(In all W.Ps.)
******
COMMON ORDER
The petitioner, in all these writ petitions, is M/s.Anguvilas
M.V.Muthiah Pillai (Firm), a Partnership Firm, represented by its Partner,
Cellamuthiah.
2.The relief sought for in W.P.No.26966 of 2008 is to declare the
product “chewing tobacco” that of the petitioner does not fall within the
ambit of manufacture as defined under Section 2(f) of the Central Excise
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W.P.Nos.26966 to 26968 of 2008
Act, 1944 Section Notes, Chapter Notes and Tariff Heads and hence not an
excisable product.
3.The learned counsel appearing on behalf of the petitioner-firm
mainly contended that the petitioner-firm is a manufacturer of tobacco
product and there is no conversion as such in respect of selling of tobacco,
as far as the petitioner-firm is concerned. The petitioner-firm purchases the
raw tobacco from the farmers and re-packs the same and sells it to the
customers and there is no conversion of tobacco as any other product and
the manufacturing process is absent. Thus, the tobacco, being sold in the
market, is not excisable and therefore, the actions taken by the respondents
are untenable.
4.The learned Senior Panel Counsel appearing on behalf of the first
respondent disputed the said contention by stating that Courts cannot form
an opinion regarding the process of manufacturing done by the petitioner-
firm and whether the tobacco product, being sold in the market by the
petitioner-firm, is a manufactured product or not and the same is to be
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W.P.Nos.26966 to 26968 of 2008
decided by an adjudication with reference to the documents, evidences and
by examination. Thus, the very claim set out in the writ petition deserves no
merit for adjudication. Further, the petitioner-firm has already preferred
appeals before the Customs, Excise and Service Tax Appellate Tribunal,
South Zonal Bench, Chennai (Tribunal). The Tribunal by order dated
11.07.2017 closed the appeals for statistical purpose, however made it clear
that the appeals along with stay order/interim orders, if any, will continue
before the Tribunal. Further, the Tribunal has granted liberty to both parties
to file application before it to reopen the matter as and when the cases are
disposed of by this Court in case of any change of circumstance. Now, it is
for the petitioner to approach the Tribunal for adjudication of these issues
by filing application for reopening the matter.
5.During the course of argument, the learned counsel for the
petitioner cited a judgment of the Madurai Bench of Madras High Court in
the case of Tvl.M.U.Mohamed Sultan & Co. vs. Asstt. Commr. Service
Tax (F.A.C.), Pudukkottai reported in 2019 (368) E.L.T. 669 (Mad.).
Paragraph 4 of the judgment would be relevant, which reads as follows:-
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W.P.Nos.26966 to 26968 of 2008
“4.In the instant cases, the petitioners are in the
business of purchasing mined tobacco on whole sale
basis, add some scent, repack it in small packs and sell
it. The respondent has taxed them, on the ground that
adding scent and making in small packs involves
manufacturing process and the tobacco is converted
from raw tobacco to chewing tobacco, which is a
different commercial product and, therefore, they are
liable for paying tax.”
6.Relying on the said judgment, the learned counsel for the petitioner
reiterated that the petitioner is also repacking the tobacco products by
scenting and the facts are similar and therefore, the writ petition is liable to
be allowed.
7.In the case of Crane Betel Nut Powder Works vs. Commissioner
reported in 2007 (210) E.L.T. 171 (SC), the Hon'ble Supreme Court held
that manufacture and crushing betel nuts into smaller pieces and sweetening
the same with essential/non-essential oils, menthol, sweetening agencies
etc., did not result in manufacture of a new and distinct product having a
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W.P.Nos.26966 to 26968 of 2008
different character and use as end product continues to retain its original
character though in a modified form.
8.As far as the above judgments are concerned, this Court has to
consider the nature of repacking as narrated by the writ petitioner-firm in its
own affidavit in paragraph 13, which reads as hereunder:-
“13. ....the petitioner purchases raw chewing tobacco
from the farmers and from the market. The petitioner also
purchases other raw materials such as Jaggery, Grocery,
Musk, Xylol, Ambertee, Calcium Powder etc. The petitioner
cut the raw tobacco into pieces through a cutting machine.
The petitioner mixes various varieties of groceries in a fixed
combination and powder them in a pulverizing machine.
Similarly, Musk, Xylol, Ambertee, Calcium Powder are
powdered in a pulverizing machine. The petitioner dissolves
jaggery in water and heat it in oven for a fixed time and
prepare the jaggery paste and pore the jaggery paste into
vessels and mix with raw cut tobacco, grocery powder and
the grounded musk and allow to settle for some time. The
petitioner thereby completes the process and the resultant
products kept in loose form are directly packed in pouches in
determined quantity and sell them in the market only as
“chewing tobacco””.
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W.P.Nos.26966 to 26968 of 2008
9.Perusal of the above paragraph clearly provides an idea that various
other ingredients are also involved in the process of making the tobacco, as
far as the petitioner-firm is concerned. They admit that along with the raw
materials, they add jaggery, grocery, musk, xylol, ambertee, calcium powder
etc. Etc., is to be elaborated by the petitioner and such elaboration must be
adjudicated in detail and depth with reference to the product, which come
out for selling in the market.
10.High Court is not an Expert Body in order to form an opinion with
regard to the manufacturing of a product or otherwise. Experts in the
Department must conduct an inspection and form an opinion, whether it is a
manufacture of product or the raw material is just repacked and sold to the
end user. The said nature of proceedings cannot be adjudicated before the
High Court, as the scope of the writ proceedings are limited. The High
Court can adjudicate the process through which the decision is taken by the
competent authorities in consonance with the provisions of the statutes and
rules and certainly not the decision itself. This apart, the petitioner has
already approached the Tribunal for adjudication of these issues.
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W.P.Nos.26966 to 26968 of 2008
11.Prima facie paragraph 13 of the affidavit reveals that some
processes are involved in respect of the products sold by the writ petitioner
to the end user in the society. All such details are to be adjudicated with
reference to the product sold to the end user, the raw materials used and the
processes undertook in this regard.
12.This being the factum, the judgments cited by the petitioner cannot
be relied upon, in view of the fact that the facts in the present writ petition
are entirely different and as far as the judgment of the Hon'ble Supreme
Court is concerned, the Hon'ble Supreme Court held that if the original
character is not modified, then it need not be considered as a manufacturing,
but in the present case such facts are to be decided only through complete
adjudication by the competent authority and by the appellate authority.
Thus, the petitioner is at liberty to exhaust the appellate remedy in the
manner known to law.
13.As far as W.P.No.26967 of 2008 is concerned, with reference to
the relief sought for refunding of central excise duty, the petitioner is to file
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W.P.Nos.26966 to 26968 of 2008
appropriate application under Section 11B of the Central Excise Act, 1944.
Thus, the petitioner is at liberty to approach the authorities and the
authorities competent shall decide the application, if any, filed by the
petitioner by following the procedures on merits and in accordance with law
as expeditiously as possible.
14.As far as W.P.No.26968 of 2008 is concerned, the relief sought for
in this writ petition cannot be considered by this Court, as the issues are
pending before the Tribunal and such issues can be adjudicated by the
petitioner in the manner known to law.
15.With the above observations, all these writ petitions stand
disposed of. No costs. Consequently, connected miscellaneous petitions
are closed.
19.04.2021
Index : Yes
Speaking Order :Yes
abr
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W.P.Nos.26966 to 26968 of 2008
To
1.The Assistant Director,
Directorate General of Central Excise Intelligence,
Chennai Zonal Unit, C-3, 'C' Wing, II Floor,
Rajaji Bhavan, Besant Nagar, Chennai-600 090.
2.The Chief Commissioner of Central Excise,
Central Revenue Building,
1/37, Race Course Road,
ATD Street, Coimbatore-641 018.
3.The Commissioner of Central Excise,
Central Revenues Building,
Madurai-625 002.
4.The Assistant Commissioner of Central Excise,
Dindigul I Division,
30, Mengles Road, Dindigul-624 001.
5.The Superintendent of Central Excise,
Dindigul II Range,
2/75, N.G.G.O. Colony, Dindigul-624 005.
6.The Customs, Excise and Service Tax
Appellate Tribunal,
Shastri Bhavan Annexe Building,
1st Floor, No.26, Haddows Road,
Chennai-600 006.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.26966 to 26968 of 2008
S.M.Subramaniam, J.
(abr)
W.P.Nos.26966 to 26968 of 2008
19.04.2021
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