1. The main question that arises for determination in this petition under Article 226 of the Constitution is whether Walk- in- Cooler manufactured by the petitioner-company are ordinarily sold or offered for sale as ready assembled units so as to attract the payment of excise duty of 20% ad valorem under Central Excise Tariff Item No. 29A(1).
2. The petitioner is a private limited company which carries on business, inter alia, of manufacturing Walk-in-Cooler which are used for preservation of food, blood plasma, medicines and other perishable articles. Walk-in-Cooler comprise of various component parts, such as cooling coils, blower motors, condensing units, controls, condensers, thermostats, over-load protection thermal relay and panels. in addition, Walk-in-Cooler also necessitate ancillary equipments. Such as ducting, copper tubing, wiring and piping. None of the parts of the Walk-in- Cooler can work independently as a cooling inachine unless all these parts are installed and assembled together. The distance between Walk-in-Cooler and the condensing units varies according to the requirements and specifications of each individual customer, the variation being as much as 50 feet or more. The petitioner-company manufactures in its factory panels lined with G.I. sheets, wooden flooring, insulated doors lined with G.I. sheets and cooling coils. the other parts to wit, compressors, condensing units, thermostats etc., are purchased by the petitioner-company from the market after paying excise duty on the same. These facts have not been controverted by the respondents, viz. the Union of India, and the Assistant Collector of Central Excise.
3. According to the petitioner-company the Walk-in-Cooler manufactured by it and erected and installed at the sites of its various customers are not ordinarily sold or offered for sale by the petitioner-company as ready assembled units and hence do not attract the 20% ad valorem duty recovered under Tariff Item No. 29A and which duty aggregating to Rs. 4,10,726.06 the petitioner- company has paid for time to time under protest.
4. After exhausting the remedies available to the petitioner- company by way of representation, appeal and revision to the concerned authorities, culminating in the impugned order dated 6th January, 1972 passed by the 2nd respondent, the petitioner- company has filed the present petition challenging the said impugned order rejecting the petitioner-company’s claim for refund of the excise duty paid by it under protest. By this petition, the petitioner-company also claims the refund of the amount of Rs. 4,10,726.06 paid by it to the department under protest as excise duty, less the duty payable on the dutiable parts.
5. The controversy between the parties is whether the Walk-in- Cooler (which undoubtedly are refrigerating appliances) are ordinarily sold or offered for sale by the petitioner-company as ready assembled units, so as to attract the payment of excise duty under Tariff item No. 29A(1). Tariff Item No. 29A(1) reads as under :-
“Refrigerators and other refrigerating Twenty percent appliances, which are ordinarily sold or ad valorem. offered for sale as ready assembled units, such as ice-makers, bottle coolers, display cabinets and water coolers.
It is the contention of the petitioner-company that the Walk-in- Coolers ordinarily sold and offered for sale by it, are not ready- assembled units and hence the duty under Tariff Item No. 29A(1) is not attracted. The contrary is the contention of the respondents.
6. In order to examine the rival contentions of the parties, it would be pertinent to ascertain whether or not the Walk-in- Coolers manufactured by the petitioner-company can be said to be ready assembled units and if so whether they are ordinarily sold or offered for sale as such, viz. as ready-assembled units.
7. A Walk-in-Cooler would certainly be a refrigerating appliance. But at the same time, it cannot be equated with a domestic refrigerator or a domestic air-conditioner available in the market in average standard sizes. Walk-in-Coolers have no average standard sizes, their capacity is varying from 94 cubic feet to 430 cubic feet for even larger, depending upon the requirement and specification of such individual customer. From the affidavit dated 27th July, 1977 of J. T. Advani on behalf of the petitioner-company emerges that even the distance between the product cooler and the condensing units aries and can, in a given case, be as much as 50 feet. After the two components, viz. the product cooler and the condensing unit are connected at the site, vacuum is drawn by means of a vacuum pump. Thereafter refrigerant gas is charged in the system and then the Walk-in- Cooler is started at the site. The temperature readings are then taken by means of a dial thermometer to determine whether the desired temperature in the cooler has been obtained. If any temperature adjustment is required, the same is done at the site. The entire process of assembling and erection of a Walk-in-Cooler is done at the site and according to J. T. Advani, is of such a great magnitude that it would be entirely uneconomical to carry out the whole process twice over, viz. at the factory and once again at the site where the Walk-in-Cooler is assembled and installed. Advani further goes on to state in his affidavit that some of the items like refrigerant gas, etc., cannot be re-used once the Walker- in-Cooler is dismanlted. Compressors used in the Walk-in-Cooler are of the open type, unlike the compressors in the case of ordinary standard air-conditioner where the compressors are sealed units. Open type of compressors require charging of the refrigerant gas which is very expensive, costing several thousands of rupees, depending upon the size of the Walk- in-Cooler. Thus according to Advani, it is economically not feasible to have a ready-assembled unit in working condition in the petitioner-company’s factory and thereafter dismantle it and carry the dismantled parts to the customer’s site and there again install the parts and once again put the whole in running condition. Furthermore, all the parts of the Walk-in-Coolers, such as cooling coils, blow motors, condensing units and controls are separate units which ate assembled and fitted at the site. Ancillary equipments such as conduit copper tubes for water are also connected at the site to the various machineries required to assemble Walk-in-Coolers.
8. These statements made by Advani in his affidavit of 27of July, 1977 do not appear to be controverted in any of the affidavits filed by the respondents as was conceded with his habitual fairness by Mr. Shah, the learned Counsel appearing on behalf of the respondents. Thus as far as the petitioner’s Walk-in-Coolers are concerned, what appears to be position is that the elementary work like panelling for size and specifications, is done at the factory premises of the petitioner- company and thereafter the panelling and certain other components are transported in a dismantled condition from the factory to the site where these components, together with the components purchased by the petition-company from the market and and brought directly to the site are installed and assembled and the entire whole put in a running condition at the site for the first time. In this state of affairs it can hardly be said that the petitioner’s Walk-in- Coolers are ready- assembled units such as, say, standard domestic refrigerators or standard domestic air-conditioners which are already in working condition in the factory and which are carried as a whole or, for by mechanically assembling certain parts and by attachment to the electric connection. Though initially it was strenuously urged by Mr. Shah that the process of assembling of the various components of the petitioner’s Walk-in-Coolers at the site was only a routine matter of fixing up the parts together with nuts and bolts, this contention, though not entirely given up, was not urged by Mr. Shah and fairly so, with any amount of the earlier vehemence with which this proposition was canvassed. There is overwhelming evidence on record which indicates beyond any shadow of doubt that the assembly and installation work done at the site is not merely getting together the various parts and components with nuts and bolts but that a regular erection and installation process at the site has to be gone through lasting not minutes or hours but several days before the Walk-in- Cooler is put in a running condition for the first time at the site itself. This aspect is also brought to the forefront by an affidavit made by one Moreshwar Vinayak Gupte, the Manager of the Engineering Services of of Glaxo Laboratories. In this affidavit, Moreshwar Gupte states that in 1970, Glaxo Laboratories had placed an order for installation of a Walk-in- Cooler with the petitioner-company with specifications suitable to the requirements of Glaxo Laboratories for storage of Pharmaceuticals. Pursuant to that order, parts and components of the Walk-in-Cooler were brought buy the petitioner- company to the site of the installation and the work of erecting and installing the Walk-in-Cooler at the site commenced. This work, which was witnessed by Gupte, took a few days. He goes on to say that this work of erecting and installing the Walk-in-Cooler was a very elaborate process and did not consist merely of fitting nuts and bolts and electrical connections to get the Walk-in Cooler in a running condition. He further states that after the erecting and installing work was done, vaccum was pulled out, gas was charged and the cooling unit was started. Thereafter an elaborate cooling test and other tests were taken as and electrical installation test. It was only after all this was done that completion certificated was approved by Gupte.
9. There is no reason to doubt the veracity of the statements made by Moreshwar Gupte in his affidavit. Gupte has no connection with the petitioner-company and hence had no reason to make a false affidavit. In fact no reason was suggested, and rightly so, by Mr. Shah, why the contents of Gupte’s affidavit should not be accepted. While the contents of Gupte’s affidavit have not been controverted by the respondents, they strongly rely on an affidavit and report of their then Excise Superintendent one Nayampalli. That affidavit and report are worthless and I shall be indicating a little later.
10. On record there is a letter dated 22nd July from Hoechst Pharmaceuticals Ltd. to the petitioner-company which that Hoechst Pharmaceuticals would like to have the condensing unit outs the building and requests the petitioner to depute their representative to take the necessary measurements and to advice Hoechst Pharmaceuticals as to its outside the building. This indicates that the condensing unit is not a to the Walk-in-Cooler ready for instant use but is a separated unit depending upon the requirement of the customer, as in the instance Hoechst Pharmaceuticals, outside the premises. This is yet another indication that the Walk-in-Cooler assembled and installed by the petitioner-company at the site cannot be said to be a ready assembled unit but is one which must necessarily be tailored to the customer’s specifications and retirements, and which is put in a running condition for the first time at the site.
11. The fact that the installation of the petitioner’s Walk-in- Coolers at the site is not merely mechanical but necessitates detailed assembly and installation for several days, is also brought to the forefront by 3 letters from Hoechst Pharmaceuticals to the petitioner. In the letter dated 22nd September, 1967, Hoechst Pharmaceuticals state that the installation has still not been completed. The next letter is dated 18th October, 1967 in which Hoechst Pharmaceuticals declined the petitioner’s request for a certain payment, on the ground that the job was still not complete and the installation work was still in progress. That the installation work was still not over, has also been stated in the letter dated 17th November, 1967 from Hoechst pharmaceuticals to the petitioner. In addition to Gupte’s affidavit, these letter of Hoechst Pharmaceuticals also indicate that the work of assembly, erection and installation was not merely a mechanical job- work of fixing nuts and bolts and starting the electricity to get the Walk-in-Cooler in a running condition, but was an elaborate and complicated job involving several day’s labour at the site in order to put the Walk-in-Cooler in a working condition at the site. to do all this first at petitioner’s factory and to repeat this elaborate process at the customers’ sites with different sizes and specifications, would be impracticable physically, commercially and economically and the petitioner-company is right the panel assembly and other rudimentary work is done at the petitioner’s factory in order to get the specifications correct, the result would be a ready- assembled unit in a working condition, more so when several major components and parts which would make the Walk-in-Cooler in a running condition, are brought from the market not to the petitioner’s factory but directly to the site where the complicated erection and installation work is done and where for the first time the assembled whole is put in a running condition. Unless and until all this is done what is brought from the petitioner’s factory would be a useless entity incapable of working merely by putting together with nuts and bolts and starting the electric current.
12. Here it may be stated that during the relevant period, there is on record only one instance when a Walk-in-Cooler was wholly assembled and put in a running condition for the first time not at the site but at the factory premises of the petitioner- company. this was done in the case of Model No. CRG 320 where the particular customer first wanted a trial and demonstration in the petitioner’s factory before it was brought to my notice. Hence in respect of the particular Model No. CRG 320, the duty under Tariff Item No. 29A(1) would be attracted because by assembling that Walk-in-Cooler in its factory in a ready- to-use condition, the petitioner gave to that particular customer a ready-assembled unit. Mr. Rana appearing on behalf of the petitioner- company conceded that in respect of that particular model, the petitioner-company would not be entitled to claim the refund of Rs. 3,864/- paid by it. However, Mr. Rana is correct when he says that one such solitary instance would not mean that the petitioner-company ordinarily sold or offered for sale its Walk- in-Coolers as ready- assembled nits in respect of which duty was paid under protest, under Tariff Item No. 29A(1).
13. Coming to the affidavit dated 17the October, 1978 and the Report dated 19th October, 1970, of R. S. Nayampalli, the then Superintendent of Central Excise, great reliance was placed by Mr. Shah on this affidavit. the affidavit correctly reflects the contents of the report and hence Mr. Shah adverted at some length to this affidavit. In that affidavit, Nayampalli states that in September 1970, he along with a representative of the petitioner- company and its technician visited 3 places where the petitioner- company had installed Walk-in-Coolers, viz. (1) Hill-Top Hotel, Worli, (2) Glaxo Laboratories, Worli, and (3) Saheb Singh & Sons, Marine Lines. He further state that he made an on- the-spot study of the Walk-in-Coolers at these places which revealed that the petitioner-company was bringing Walk-in-Cooler in a detachable condition only to be erected by nuts and bolts to the panels and condensing unit, Nayampalli observed that panels and doors, already insulated along with its cooling coils and condensing unit were brought from the factory at on etime under one transport document and the same were only fitted at the site by nuts and bolts and electrical connections were made. He goes on to state that in fact all the processes incidental ancillary to the completion of the manufactured products were complete at the factory on site except for certain wire connections and extensions described as “ducting.”
14. On the strength of this affidavit, Mr. Shah urged that what the petitioner-company manufactured and delivered to their customers was a ready-assembled unit all set for functioning as soon as the nuts and bolts were fixed and the electrical connection was made at the site. In reply the petitioner’s factory were only the panels including the door panels and the ceiling panes. The ceiling panel had a cooling coil, i.e., the evaporator fixed on it with a fan motor for the cooling coil. The door panel had the latches and the locking arrangement on the door fixed on it. Only those panels with the aforesaid parts wee assembled at the petitioner’s factory for matching the panels of the cabinet and testing the latches and locking arrangement of the door. J. T. Advani goes on to state that only 8 items of the Walk-in-Coolers were cleared from the petitioner’s factory, namely:-
1. Panels, floor rack, door frame
4. Evaporator (coil)
5. Electric motors
6. Control and thermostats
8. Other loose items such as bolts, nuts, etc.
He further goes on to state that the following ancillary equipment was supplied directly at the site for direction without even being brought to the petitioner’s factory, namely:-
2. Copper tubing
6. Wiring and piping
15. J. T. Advani’s affidavit puts Nayampalli’s report and affidavit in a completely different light, more so when admittedly Nayampalli was not even present when the installation work at these 3 places was done and has no personal knowledge of the premises on which he has sought to base his conclusions. It is difficult to envisage how nayampalli could possibly have come to the conclusions he arrived at merely by seeing the Walk-in- Coolers, which had already been commissioned, erected and installed when at that time he was not even present. This has been rightly emphasised by the petitioner’s Constituted Attorney J. T. Advani in his affidavit dated 17th January, 1979 in reply to Nayampalli’s report and affidavit. The affidavit and report of the Excise Superintendent Nayampalli are, to my mind, words have been meet the exigency of the situation. Its con
there is a letter dated 22nd January, 1969, addressed by to the Assistant Collector of Central Excise. A grievance was made by Rana that this letter was obtained by the department from Voltas Ltd. behind the back of the petitioner. However, that is another aspect of the matter which I shall be dealing with later. For the moment, I am referring to this letter of 22nd january 1969 from Voltas Ltd. to the Assistant Collector of Central Excise to indicate that the case of the department as sought to be bolstered by the report and affidavit of Nayampalli is without substance and that what the customer gets at the site is not a plant which is already in a working condition in the factory but a plant or unit which is assembled and installed at site after a long and laborious process and put in a working condition for the first time at the site itself. In that letter dated 22nd January, 1969, Voltas Ltd. state that theirs is a pre-fabricated model,m and gives a description of its components, namely, comprising of an insulated body covered with an aluminium of G.I. sheet and provided with an insulated door. Inside the Walk-in-Cooler would be hung a cold diffuser which would be connected at sit buy means of refrigerant piping to a refrigeration condensing unit system. The condensing unit would comprise of a compressor and a copper cooling coil going as a condenser and provided with a fan for condenser mounted on a sheet metal base. All the components including the compressor , the coil for the condenser and the coil for the cold diffuser, the insulted timer work with door, etc., are then assembled at site. Thereafter, the mechanic goes to the site to locate the condensing unit at a suitable place and to make the refrigerant piping to evacuate the system, to charge the refrigerant and to carry out of the tests. In certain other cases, left to the convenience of the purchaser, the pre- fabricated housing is avoided and the equipment is located in a masonry room suitably insulated. The letter ends with the following words:-
“….the walk-in-cooler which we supply is not a factory made package, assembled and tested at the factory and delivered to the client at site.”
This letter addressed by Voltas to the department indicates that the installation and erection of the Walk-in-Cooler at the site is not merely a mechanical job of fixation of nuts and bolts or connection with the electric current but a regular job of installation, construction and erection without which the parts and components brought to the site cannot be put in working condition.
16. There is also on record a communication dated 30th September, 1969 addressed by T. O. Swaminathan, Under Secretary, to the Collector of Customs Bombay/Calcutta/Madras, and the Collector of Customs & Central Excise, Cochin. In that letter it is clarified that-
“Central air-conditioning plants, cold Storage plants, Ice Making Plants, etc. consist of a series of machines and other equipment which are situated at different places and connected with each other to from the complete equipment. Such plants may be sold complete but are not ordinarily sold or offered for sale as ready assembled units.”
17. It is not disputed that Walk-in-Cooler is a cold storage plant. It consists of various kinds of machineries and equipment not necessarily situate at one place for instance the condensing unit which could be at some considerable distance away from the plant itself. Thus the clarification contained in this letter gives an indication as to what the department itself was directed to consider to be a ready-assembled unit, contrary to the affidavit and report of Nayampalli.
18. In the light of the above discussion, Mr. Shah’s contention that what was produced by the petitioner in its factory was a complete ready-assembled refrigerating appliance, viz. a Walk-in- Cooler which was dismantled merely for facilitating transport to the site, must stand negatived. It is true that what the customer ultimately got was a complete refrigerating appliance and to that extent Mr. Shah is correct. But it is not what the customer ultimately got that must be taken into account in ascertaining whether the case of the petitioner- company falls within the ambit of tariff item No. 29A(1). I again emphasise that what the customer ultimately got at the site was a plant which was tested and put into working order not at the petitioner’s factory but at the site after most of the parts and components required to put the assembled whole in a running condition were brought by the petitioner from the market directly to the site where they were installed by a laborious and time consuming process according to the individual requirements and specification of each individual customer of the petitioner-company. Applying that test, it cannot be said that what the petitioner-company ordinarily sold or offered for sale was a ready-assembled unit so as to attract the duty under Tariff Item No. 29A(1).
19. Mr. Shah invited my attention to the manner in which the petitioner-company advertised the sale of the Walk-in-Coolers. he printed advertisement states the name of the petitioner-company, followed by the words, “WALK-IN-COOLERS”, followed by the words, “Pre- fabricated Sectionally built:. These words are followed by the words-
“Flexible Arrangement – Standard panel Section-Easy to Handle- Simple to Erect, Move or Enlarge”.
In the centre is an illustration of the Walk-ion-Cooler. Mr. Shah urged that the words “sectionally built” indicated that each and every part of the Walk-in-Cooler had been put together Sectionally in the factory and thereafter, for the sake of convenience, dismantled and in that dismantled state transported to the site where it was again sectionally put together. There is nothing in this advertisement to indicated that each and every part was put together sectionally in the petitioner’s factory and not at the site. Overwhelming evidence establishes the latter where it was for the first time tested and put in a working condition.
20. The next advertisement relied on by Mr. Shah pertained to certain words which according to Mr. Shah indicated that the product of the petitioner was a ready assembled unit. the words relied on by Mr. Shah are as under:-
“These Walk-in-Coolers are made in standard sections and can readily be assembled at site. All sections are of convenient dimensions, so they can be easily taken through small doors and also up and down stairs. Size are so made up that they can be enlarged later with the addition of standard section.”
Mr. Shah laid great emphasis on the first two lines of this advertisement. Mr. Shah urged that it was merely a simple matter of the assembling the dismantled components at the site with the greatest of ease. Mr. Shah also relied on another advertisement where the petitioner-company has advertised that the Walk-in- Coolers are easily assembled. This is an attempt by Mr. Shah at over-simplification not disclosed by the record. In any even, what the petitioner may advertise by way o attracting customers, can be no criterion for adjudicating upon the issue whether duty is payable under a particular tariff item. In other words, payment of duty under a particular tariff item must depend upon the facts of the case and not on the advertisement gimmick of the advertiser. Thus, it is not on the basis of what the petitioner advertises to attract customers, can its liability to pay duty under a particular tariff item be fastened but on the facts and circumstances actually existing and on a determination whether on the basis of those facts and circumstances as disclosed by the record the case would fall within the provisions of Tariff Item No. 29A(1) or not.
21. Mr. Shah relied on a letter dated 11th May, 1965 addressed by the petitioner to the Assistant Collector of Central Excise. In that letter the petitioner stated that Walk-in-Cooler Model No. CRG 208 was assembled by the petitioner-company as per regular procedure, that permission was granted by the Assistant Collector, that the petitioner-company applied for permission to dismantle that Walk-in- Cooler, that the process of dismantling started but half way through the Excise Inspector objected to the same. In view thereof, the petitioner-company asked for permission of the Assistant Collector to allow the petitioner-company asked for permission of the Assistant Collector to allow the petitioner- company to dismantle the same as the Walk-in-Cooler was required for Government department by the 15th May, 1965. According to Mr. Shah this letter shown that the petitioner-company was habituated to assembling Walk-in-Cooler in their entirety in its factory so as to make them in a running condition and thereafter to dismantle and re-erect them at the site of its customers, No such practice can be splet out from this solitary instance before the relevant period, and for which permission was even obtained from the Assistant Collector and in respect whereof the petitioner-company paid the requisite duty.
22. Mr. Shah next invited my attention to a contract dated 22nd March, 1967 between Hoechst Pharmaceuticals and the petitioner- company in support of his contention that the liability of the petitioner to pay duty fell within Tariff Item no. 29A)1) By this contract, the petitioner agreed to supply a Walk-in-Cooler, pre- fabricated and sectionally built with provision for flexible arrangement of shelves and a locking arrangement of shelves and a locking arrangement with key for the cooler. The price was Rs. 14,773/- inclusive of free delivery, installation, periodical maintenance over 12 months, excise duty and taxes. It was agreed that the equipment would carry the petitioner’s warranty against defective material and workmanship for a period of 12 months from the dated of the installation or 15 months from the dated of the supply whichever was earlier, and that delivery would be to the factory of Hoechst pharmaceuticals. Among the terms and conditions were that the delivery would be effected within the time stated, that plants, machines and fittings ordered for whether imported or of local manufacture, must be erected, installed or delivered at the specified place in perfect working condition and that all supplies were to be accompanied by delivery challans in triplicate. Mr. Shah also relied on delivery challan dated 1st September, 1967 sent by the petitioner to Hoechst Pharmaceuticals in respect of a Blue Star Sectionally built Walk-in-Cooler, quantity one, “Loose”. Mr. Shah also relied on a pill dated 5th September, 1967 of the petitioner to Hoechst Pharmaceuticals for Rs. 14,773/- for “Blue Star Pre-Fabricated Sectionally built Walk-in-Cooler suitable for A-C- 1-50-230 Volts with locking arrangement…..” Mr. Shah urged that in view of this contract, delivery challan and the petitioner’s bill,what had been supplied by the petitioner to Hoechst Pharmaceuticals was Walk-in-Cooler pre-tested in the petitioner’s factory and found in working condition and ready for use at the site and that all that had to be done at the site of Hoechst Pharmaceuticals was to make a few necessary adjustments to start the machine. There is nothing either in the contract or in the delivery challan or in the petitioner’s bill relied on by Mr. Shah to support this contention urged by him which at best is in the nature of conjecture and speculative reasoning.
23. In the light of the earlier discussion, the grounds urged by Mr. Shah must stand rejected and I come to the conclusion that the case of the petitioner-company would not fall within the ambit of tariff Item No. 29A(1).
24. It is true that where two views can reasonable by taken, interference by way of writ jurisdiction is not called for. However, when the view taken by the department is patently incorrect or so unreasonable or perverse or mala fide or grossly erroneous, interference in writ jurisdiction would be an appropriate remedy. In the present case, it is not a question of my taking merely a view different from that taken by the department. In my opinion, the view taken by the department is so patently and manifestly incorrect and so grossly erroneous as would amount to a denial of justice to the petitioner-company and hence merits interference.
25. It was urged by Mr. Rana on behalf of the petitioner that the words in Tariff Item No. 29A(1), viz. “such as ice-makers, bottle cooler, display cabinets and water cooler”, were exhaustive and not merely illustrative. Thee is no merit in this contention and which was given up by Mr. Rana and hence digression on that aspect is unnecessary.
26. The next ground on which the impugned order was challenged by Mr. Rana was on the ground of violation of the provisions of Article 14 of the Constitution. According to Mr. Rana, the petitioner-company was discriminated against as compared to Voltas Ltd. Mr. Rana urged that Voltas Ltd. also sell a similar kind of Walk-in-Coolers and invoice them as one unit and that the petitioner-company which has been doing likewise, has been picked out for hostile and invidious discrimination involution of its fundamental rights under Article 14. Mr. Rana relied on the letter dated 22nd January, 1969 of Voltas Ltd. to the Assistant Collector of Central Excise wherein Voltas Ltd. have stated that their Walk-in-Cooler are not a factory-made packages which are assembled and tested at the factory and delivered to the customers at site. Mr. Rana’s contention on the aspect of discrimination is negatived by a comparison of the specimen contract dated 22nd March, 1967 of the petitioner-company with Hoechst Pharmaceuticals and the specimen contract entered into by Voltas Ltd. with one of their client, viz. the Poona Red Cross Blood Bank. While the petitioner’s contract with Hoechst pharmaceuticals is for the sale of a Walk-in-Cooler, the contract by Voltas Ltd. with Poona Red Cross Blood Bank is “Works contract” and in fact, so it is even headed. One cannot compare a sale contract with a works contract and plead discrimination. Hence the plea of discrimination urged by Rana must fail. As a sequitor, there is also no merit in Mr. Rana’s contention that the failure by the authority to consider the point of discrimination, amounted to a violation of the principles of natural justice and fairplay.
27. It was urged by Mr. Rana that the impugned Order dated 6th January 1972 violated the principles of natural justice because the letter dated 22nd January, 1969 was obtained by the department from Voltas Ltd. behind the petitioner’s back and without giving an opportunity to the petitioner to have its say in the matter. There is no merit in this contention for the simple reason that even assuming that this letter was obtained by the department behind the back of the petitioner, there is nothing in this letter which goes against the petitioner.
28. Mr. Rana invited me to set aside the impugned order dated 6th January, 1972 on the ground that it showed misdirection in law and non-application of mind. Mr. Rana invited my attention to the operative part of the order which reads as under:-
“I have carefully gone through their arguments made earlier which are on the records. The party themselves admitted that they are manufacturing same type of Walk-in-Cooler which are assessed under T.I. No. 29A(i) and assessment of which was confirmed in the Revision Petition field before the Govt. of India viz. Govt. of India’s letter F. No. 5 Ap. 316/68-EX V, dated 18-12-1969. Since the decision of the Govt. is operative at present and since they are manufacturing the same products with the same manufacturing data, I find that the products are assessed to duty under T.I.No. 29A(1) and as such, they are not eligible for refund as their products, are correctly assessed to duty. I, therefore reject the party’s claim for refund.”.
Mr. Rana urged that there was n on-application of mind on the part of the 2nd respondent in passing the impugned order because all he did was to follow the earlier government decision without actually applying his mind to the facts of the case. If that ad been all, Mr. Rana would be correct. However, there is on record a letter dated 13th October, 1971 from the Superintendent of Central Excise to the petitioner-company, wherein after referring to the Government of India order of 18th December, 1969, and the petitioner’s Revision Application dated 23rd/28th October, 1968, a query is made whether the manufacturing technique or procedure followed in respect of Walk-in- Coolers in respect of which the Revision Application was decided, was the same or different. In reply, the petitioner-company by its letter dated 4th November, 1971 addressee to the Superintendent, Central Excise, stated that the manufacturing technique or procedure followed in respect of Walk-in-Coolers was the same as before. Even at the personal hearing granted by the 2nd respondent, the petitioner was asked whether there was any change in the manufacture of the Walk- in- Coolers. To that query, the answer given by the petitioner to the 2nd respondent was that there was no change in the technique of manufacture. This is reflected in the impugned order itself. In view of the petitioners’ admission that it is manufacturing the same type o Walk-in-Coolers without any change whatsoever, the 2nd respondent was correct in coming to the same conclusion which had already been arrived at by higher authorities on the same date. If of course there had been any change in the mode of manufacture or technique and if the petitioner had so stated before the 2nd respondent and had brought to his notice the nature of such change, it would certainly have been incumbent upon the 2nd respondent to consider the case of the petitioner in the changed of circumstances. That not being the case, non- application of mind can hardly be attributed to the 2nd respondent, in the light of the admissions made b the petitioner- company itself.
On these aspects the petitioner’s challenge to the impugned order must fail. However the petitioner-company succeeds on the major challenge discussed in the earlier part of this judgment.
29. In the result, the petition is allowed and the Rule is made absolute in terms of prayers (a) and (b) with the proviso that the amount of Rs.4,10,726.06 shall read as Rs. 4.0, 862.06 being the difference of the duty of Rs.3,864/- in respect of Model No. CRG 3220 of which the petitioner-company is not entitled to a refund. The respondents shall also refund to the petitioner- company the excise duty paid after 6th March,1972 other than the duty payable on dutiable parts provided however that such excise duty after 6th March, 1972 was paid by the petitioner-company under protest.
30. Each party shall bear his costs of the petition.
31. Operation of this order shall be stayed for period of four weeks from the dated of the signing of the judgment.