Prakash Narain, J.
1. This petition under Articles 226 and 227 of the Constitution of India by Caltex Oil Refinery (India) Limited, a Company incorporated under the Indian Companies Act and having its registered office at No. 8, Shoorji Vallabhdas Marg, Bombay-1, has been filed against Union of India, the Collector of Central Excise, Hyderabad and Assistant Collector of Central Excise, Visakhapatnam Division, Visakhapatnam for the issue of a writ of certiorari or any other appropriate writ, direction or order to the respondents herein, calling for the records and proceedings of the case and after looking into the question of legality and/or propriety thereof to quash and set aside orders dated 14-6-1965 (Exhibit 'H' to the petition), 3-9-1965 (Exhibit 'I' to the petition), 22-3-1966 (Exhibit 'J' to the petition), and 31-10-1969 (Exhibit 'K' to the petition); (b) for issue of a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, direction or orders against the respondents, their officers, subordinates servants and agents directing them, (i) to withdraw and/or cancel the impugned orders dated 14th June, 1965 in so far as it rejects Claim IB and Claim 2 (Exhibit 'H' hereto) 3rd September, 1965 (Exhibit T hereto) 22nd March, 1966 (Exhibit 'J' hereto) and 31st October, 1969 (Exhibit 'K' hereto), and further directing them (ii) to refund to the petitioners Rs. 50,25,027 85 illegally collected as excise duty.
2. The impugned orders relate to the claims made by the petitioner for refund of excise duty earlier paid by the petitioner allegedly by mistake or misapprehension or on an incorrect interpretation of the relevant law on what the petitioner describes as Burner Fuel Oil, the duty whereon was charged treating it to be a finished product, called Furnace Oil. The total amount claimed by the petitioner was Rs. 49,47,047.13 The claim of the petitioner company having been rejected, it has now filed the present petition for quashing the orders of the various authorities and for a direction by way of mandamus that the amount be refunded to it by the respondents.
3. In order to appreciate the contentions of the parties it will be advantageous to go into the history of the payment of the levy in question as well as the process of manufacture of the commodity in question.
4. The petitioner has a refinery to process Crude Oil for production of various petroleum products. To run this refinery a plant has been installed at Visakhapatnam which commenced production in May, 1957 At various stages of production oil is used as fuel in furnaces and for heating the plant On 29th July, 1959 Low Sulpher Fuel Oil if sold to Tata Iron and Steel Company Limited through Standard Vacuum Company for use only by Tata Iron and Steel Company Limited, was exempted from additional duty. Low Sulpher Fue1 Oil is one of the finished products produced by the petitioner after processing Crude Oil. On 24-2-1962 item 11-A was introduced in the tariff by the Finance Act of 1962. On 31-7-1962 a representation was made by the petitioner to the Central Government for exemption of levy of excise duty on Burner Fuel Oil consumed in the refinery. On 18th May, 1963 a notification was issued by the Central Government exempting from excise duty intermediate petroleum products falling under, item 11-A of the Tariff if used as fuel within the refinery for the manufacture of finished petroleum products. On 4th June, 1963 a trade notice was issued by the Excise Collectorate at Bombay to the effect that intermediate petroleum products such as Burner Fuel Oil were not liable to excise duty prior to 24-4-1962 On 5-7-1963 the Central Excise Collectorate at Hyderabad issued a standing order to the effect that intermediate petroleum products were not liable to central excise duty prior to 24th April 1962. The petitioner was informed by a letter dated 3rd August, 1963 by the Deputy Superintendent, Central Excise, Visakhapatnam that no excise duty was chargeable on Burner Fuel Oil prior to 24th April 1962. Thereafter in 1963 the petitioner filed a claim for refund of excise duty paid till 24th April, 1962 on what it described as Burner Fuel Oil There were meetings between the representatives of the petitioner and the Excise authorities which resulted in the claim of the petitioner being split up into three claims (described for convenience as claims 1A, 1B and 2) on 14th August, 1964.
5. Claim 1A was in respect of excise duty paid on oil transferred from the Crude Unit directly and not via propane. Decarbonization Unit (hereinafter called 'Tanks 170 and 171'). The amount under this claim was Rs. 24,22,547.14 and the refund claimed was for excise duty paid from 1st January, 1957 to 31st July 1963.
6. Claim 1B related to excise duty paid on transfers of oil from P.D. Unit only to tanks 170 and 171 declared at the time of payment of duty as Low Sulpher Furnace Oil. The amount claimed under this head was Rs. 4,79,844.67 and the period for which the refund was claimed was July, 1959 to 31st December, 1960. Claim No. 2 related to excise duty on transfer of Oil from the Bonded Blending-cum-Storage Tanks to tanks Nos. 170 and 171. The amount claimed under this head was Rs. 20,44,655.32. The period for which refund was claimed under this head was from 1st January, 1957 to 13st July, 1963.
7. The three claims were duly considered by the Assistant Collector at Visakhapatnam. On 14th Jute, 1965 the Assistant Collector, Visakhapatnam passed his order (Annexure 'H' to the petition) by which the claim under the head 1A was sent for pre-audit while the claims under the heads 1B and 2 were rejected. On 3rd September, 1965 another Assistant Collector of Excise at Visakhapatnam passed an order rejecting claim 1A also (Annexure 'I' to the petition). Thereupon the petitioner filed an appeal on 4th September, 1965 to the Collector against the rejection of claims 1B and 2 and on 30th October, 1965 against the rejection of claim 1 A. These appeals were rejected by the Collector, Central Excise, Hydrabad by his order dated 22nd March, 1966 (Annexure 'J' to the petition). The petitioner thereupon preferred revision applications to the Central Government on 16th July, 1966 which were heard on 2nd February, 1968. During the hearing of the revision petitions directions were given for further investigations of the case and a report regarding this investigation was submitted to the Central Government on 5th March, 1968. A further hearing was given to the petitioner on 25th October, 1968. The Central Government thereupon passed its order in revision on 31st October, 1969 (Annexure 'K' to the petition) by which both the revision petitions filed by the petitioner were dismissed by a detailed order. Aggrieved, the petitioner has now come to this Court for the reliefs already mentioned above.
8. The plant of the petitioner at Visakhapatnam generally speaking works in the following manner : There is a Crude Unit in which Crude Oil is first processed resulting in six basic products, namely, (i) Gas, (ii) Napatha Base Stock/Motor Gasoline, (iii) Kerosene Base Stock, (iv) Diesel Base Stock, (v) Fluid Catalytic Cracking Unit Feed Stock, and (vi) Intermediate Non-marketable Fuel Oil. We are concerned with this sixth product. This oil is then transmitted through pipelines to all or any of the three units of the plant namely (a) P.D. Unit or (b) Bonded Tank or (c) Tanks 170 and 171 The contention of the petitioner is that this intermediate non-marketable fuel oil, if sent to the P.D. Unit, is for the purpose of further processing but may be sent from the P.D. Unit to Tanks 170 and 171 for storage. If this oil is directly sent to Tanks 170 and 171, it is only for the purpose of storing the same for being transmitted there from either to the furnace for heating the P.D. Unit or to the furnace for heating the Crude Unit. The Intermediate Non-marketable Fuel Oil may also be sent to the Bonded Tank via the P.D. Unit either for being transmitted as such to Tanks 170 and 171 or for marketing the same after adding to it what is called Cutter Stock, without adding which, according to the petitioner, the oil is not marketable, due to a high viscosity, but can be used and has been used internally for heating the plant of the petitioner to produce various marketable products. According to the petitioner it paid excise duty on such oil stored in Tanks 170 and 171 on its transmission either directly from the Crude Unit or from the P.D. Unit or from the Bonded Tank, which it was not liable to pay inasmuch as in that state the oil was what is described as Burner Fuel Oil and not Furnace Oil.
9. The learned counsel for the petitioner formulated seven propositions requiring court's determination. These may be summarised a follows: -
1. Expressions used in the Excise Act must be understood in the commercial or the trade sense and not the scientific or laboratory sense. According to trade and market, Furnace Oil is only that mineral oil which is of low viscocity grade i.e. 540-630 seconds by Redwood I Viscometer at 100 F. Burner Fuel Oil consumed in the petitioner's Refinery was of high viscocity. Mineral oil having such high viscocity is not known or considered by trade as furnace oil.
2. Excise duty is on production and not on stages of production. Burner Fuel Oil is an intermediate product derived at art intermediate stage in the process of manufacture of finished petroleum product. Burner Fuel Oil is not marketable as such without further' processing or blending with other oil, i.e. cutter stock. Therefore, Burner Fuel Oil is not excisable goods and there is no manufacture of goods within the meaning of the said Act.
3. There is no removal of Burner Fuel Oil within the meaning of Rule 49 of the said Rules. Rule 49 is a condition precedent to the recovery of excise duty.
4. The order dated 3rd September, 1965 passed by Assistant Collector, Visakhapatnam, is without jurisdiction because he had no power of review or revision of the order passed by his predecessor.
5. There is no question of any estoppel against statute. There is no inherent power of review.
6. In the case of a fiscal statute the the burden is on the Department to prove all necessary ingredients justifying the tax.
7. In the case of a fiscal statute and a penal statute, there should be strict construction and the doubt, if any, should be resolved in favor of the citizen. An interpretation favorable to the citizen should be put by the court.
10. The respondents by way of return to the rule nisi have filed a counter-affidavit sworn by Shri P.R. Krishnan, Under Secretary to the Government of India, Ministry of Finance, Department of Revenue and Insurance, New Delhi and during the course of the hearing of this case an application supported by an affidavit of Shri P.R. Krishnan, was taken on record with the consent of the learned counsel for the petitioner. It is the respondents' case that the oil in question was not consumed by the petitioner as an inseparable part of an unbroken, continuous and uninterrupted process of manufacturing, and that what the petitioner describes as Burner Fuel Oil was actually Furnace Oil, the process of manufacture of which ended prior to removal for consumption. In other words, once the said oil had been separated from Crude Oil, whether it was used in the refinery or was marketed by addition of cutter stock or otherwise, it was a finished product which was liable to excise duty. So, the duty was rightly collected, the moment it was removed from the place of manufacture within the meaning of Rules 9 and 49 of the Central Excise Rules ; and the petitioner had always treated the same to be a removal attracting the payment of excise duty. It is also contended that at no time was any specific claim of the petitioner allowed and all the three claims were rejected after due inquiry and proper hearing. The counter-affidavits filed on behalf of the respondents also set out that the refinery or the manufacturing unit of the petitioner is the specified place of manufacture under Rule 9 of the Excise Rules and that Tanks 110 and of are outside the manufacturing unit which are not within the control of the Excise Authorities. Considerable stress is laid on the petitioner's own conduct in filing necessary declarations on what are called A.R. 1 forms that the oil question was Furnace Oil which attracted levy of excise duty
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14. Mr Soli Sorabjee who opened the case for the petitioner formulated the 7 propositions which, according to him, arose for consideration in this case. Mr Palkhiwala who took over, however, primarily pressed only propositions 2 and 3 on behalf of the petitioner which we have already set out earlier. The points for determination, therefore, are : Whether the consumption of the oil in question is by way of an uninterrupted integrated continuous processor manufacture, and whether there is any removal of it from the place of manufacture under Rules 9 and 49 ?
15. Keeping in mind the definitions of the terms "excisable goods", "manufacture" and "factory" in Section 2 of the Excise Act it has first to be noted that Section 3 of the Act is the charging section under which excisable goods which are produced or manufactured become liable as attracting excise duty at the rates set out in the First Schedule to the Act. The duty is levied and collected in the manner set in the Excise Rules. The basic point for decision in this case, therefore, is whether this product which is claimed by the petitioner to be Burner Fuel Oil and which, according to the respondents was Furnace Oil, is a product "manufactured" in the "factory" of the petitioner as a manufactured product so as to become "excisable goods" attracting the levy of excise duty and if so whether payment of duty was required in respect of this product by virtue of the same being "issued out of the place or premises specified under Rule 9" or on being "removed from a store room or other place of storage approved by the Collector under Rule 47" in terms of Rule 49 of the Excise Rules.
16. Mr Palkhiwala's contention is that the product in question (described by the petitioner as Burner Fuel Oil) is an intermediate product in the process of manufacture of finished petroleum product. It is not marketable as such without further processing and blending with cutter stock, and so, excise duty is not attracted in the case of this product as the duty is on production and not on stages of production. According to him if a product, even if attracting excise duty by itself, is obtained but is not removed or issued out as such and is utilised for obtaining another product, the first product does not attract levy of excise duty and it is only the end product which may attract excise duty. The intermediate non-marketable fuel oil which is the subject-matter of the present petition, according to the petitioner, remains in the pipeline throughout and is never removed or issued out. It is a part of a continuous uninterrupted integrated process of manufacture of the end product. It is not obtained by a distinct or independent process which comes to an end when this product is produced. There cannot be any duty levied at stages of a single process and the duty is leviable or can be collected only on the end product. Even if duty becomes leviable the stage for collecting the duty is not reached or, in other words, no assessment of duty takes place till a product is removed. Thus, though duty may be leviable it cannot be collected till the product is removed. Therefore, what has to be seen is whether the commodity in the present case attracts the levy of excise duty and even if it does whether there was removal within the meaning of the Excise Act and the Excise Rules for collecting excise duty or what may be called assessment of duty which becomes payable by the manufacturer.
17. The legislative intent for levy and collection of excise duty, on a reading of the Excise Act and the Excise Rules, appears to be that no duty is payable on intermediate products if the intermediate products by themselves are not the end products being manufactured by a particular factory provided, however, the intermediate products and the end products are obtained by one continuous uninterrupted integrated process as opposed to distinct or independent processes. We find force in Mr Palkhiwala's contention that the concept of making assessment only at the stage of removal supports this legislative intent. Indeed though a particular article produced may attract levy pf excise duty, as contemplated by Section 3 of the Act, which is the charging section, removal is the essence of the crystalisation of the charge as would be apparent from a reading of Section 4 of the Act and Rule 49 of the Excise Rules. The quantum of the charge is on the value at the time of removal and the value, at the time of removal is the yard-stick for quantifying the charge. Though levy is attracted on production the power to collect duty is only on removal. There may be circumstances where production may take place and yet the product may not be issued out utilised, or marketed in which case the scheme of the Act and the Rules teed to show that no excise duty would be collected on the product. For example the glut of a particular article in the market may make it expedient for a manufacturer to hold back his product or financial circumstances may prevent the finished product to be marketed. It is in this context, therefore that the provisions of Section 3 of the Act and Rules 9 and 49 of the Excise Rules have to be harmonised. Indeed, these provisions complement each other. Section 3 lays down the legislative policy on what products excise duty may be levied. Rule 9 is an injunction on the manufacturer that he has not to remove any excisable goods from the place of manufacture or any specified premises appurtenant thereto, whether for consumption, export or manufacture of any other commodity in or outside such place unless he first pays the excise duty leviable on those goods. Rule 49 is a direction to the excise authorities that the payment of excise duty shall not be demanded until excisable goods are about to be issued out of place or premises specified under Rule 9 or are about to be removed from a tore room or other place or storage approved by the Collector under Rule 47. Thus, the point of time when duty must be paid or may be collected is clearly given. Similarly, it is provided that there must be removal from the specified place to attract the payment of duty. If there is no removal there would be no question pf payment. Removal is a positive act and cannot have any reference to disappearance of the product. For example evaporation would not be removal for that takes place by natural causes in the process of manufacture or even afterwards. Similarly, waste of product while in the pipe-line or in storage may take place on account of natural causes or otherwise. We have, therefore, to see whether in the present case the product in question is (a) only an intermediate product obtained in the process of manufacturing of any other finished petroleum product, (b) whether this product is treated as an end product or only an intermediate product by processing of which any other product is to be obtained, and (c) whether this product can be regarded as having been removed at any stage for any of the purposes mentioned in Rule 9 of the Excise Rules.
18. We have already noticed earlier how the product in question is obtained from crude oil. There can be no doubt that if this type of oil is first sent to the P.D. Unit and from there to the Fluid Catalytic Cracking Unit and on being blended with cutter stock is marketed as Marketable Fuel. Oil, it will be a part of a continuous uninterrupted process of manufacture and will not attract the levy or assessment of excise duty by itself and the product which will be subject to duty will be the end product, namely, the Marketable Fuel Oil. As long as the oil in question is in this manner in the pipeline of the petitioner's refinery it continues to be the intermediate product being utilised in one single process for the manufacture of another product and would be the product to fit in with the type of product about which Mr. Palkhiwala has addressed us There is no dispute between the parties about this aspect. The difference of opinion is only about this type of oil which comes into the Tanks 170 and 171 from the three sources which we have already noticed, namely, either directly from the Crude Oil Unit, or from the P.D. Unit, or from the Bonded Tanks, and after coming into Tanks 170 and 171 either goes to Crude Unit Furnaces or the P.D. Unit Furnaces.
19. From what we have been told about the process of manufacture and even in accordance with the contention of the petitioner there can be no manner of doubt that the oil coming into Tanks 170 and 171, even if non-marketable, is utilised for the purposes of heating the furnaces of the various units in the refinery of the petitioner. It has not been shown to us that the oil coming out from tanks 170 and 171 is further processed to be converted into any other product. As already noticed earlier, this very oil if it goes from the Crude Unit to the P.D. Unit and further on to the Fluid Catalytic Cracking Unit and thence for addition of cutter stock or blending with cutter stock the oil is being utilised for being converted into some other product but if it comes into tanks 170 and 171 either directly from the Crude Unit or Via the P.D. Unit or the Bonded Tank it is not being utilised for being converted into another product but is thereafter utilised for heating purposes. Oil thus obtained for use as a heating medium either by separating it from Crude Oil and other base stocks in the Crude Unit or when this very type of oil goes from the Crude Unit to the P.D. Unit or blending unit to tanks 170 and 171. it is only for one purpose and is to use it as fuel. Therefore, it must be held that the oil which comes into tanks 170 and 171 is really an end product and distinct from an intermediately product utilised in an uninterrupted process of manufacture for obtaining another product.
20. It was urged that oil used for heating purposes it really self-generating fuel obtained in the process of manufacture of various petroleum products and even if it is consumed for heating, it is part of an integrated uninterrupted continuous process of manufacture, for the self-generating fuel is a necessity for the running of the plant in order to make an end product the process of manufacture must come to an end if the entry of this oil in tanks 170 and 171 amounts to a stage of production coming loan end it would mean that one process terminates and another has to start. This, according to Mr Palkhiwala, does not happen or the oil in question is consumed for manufacture of the same commodity and not any other commodity. Production, according to him, must be given the commercial meaning of the term or as in Cost Accountancy net produce has to be taken into account and not what all is produced for part of the product may be utilised for production of the product which can qualify for being called a product commercially produced. There may be something in what the learned counsel says but excise duty is attracted on all excisable goods which ire produced as and when the same are removed within the meaning of Rules 9 and 49 of the Excise Rules. Further as we have already observed earlier the product which is not excisable is the product which itself gets converted into another product which may be excisable in a single continuous process. In the present case we do not find such to be the case.
21. Our attention was invited to an unreported judgment of the Bombay High Court (Coram : Tulzapurkar, J.) in miscellaneous case No. 491 of 1964, Nirlon Synthetic Fibres and Chemicals Limited v. Shri R.K. Audim, Assistant Collector and Ors., rendered on 30-4-1970. In that case the contention of Mr S.J. Sorabjee who appeared for the petitioner was that since the petitioner-company had employed a continuous and integrated process for the manufacture of Nylon yarn and since the Polymer Chips that are obtained at an intermediate stage are used or consumed in the further manufacture of the said Nylon yarn without the said Chips being taken out of the equipment, the Polymer Chips did not attract levy of excise duty as the same were utilised in a continuous and integrated process for the manufacture of Nylon yarn and also there was no removal within the meaning of Rule 49 read with Rule 9 of the Excise Rules. After noticing the various provisions of the Act and the Rules and the process of manufacture in that particular case the 1earned Judge repelled the contention of the Counsel for the Respondents that the Polymer Chips attracted duty and held that inasmuch as the Polymer Chips that were obtained by the petitioner-company did not go out of the manufacturing equipment until the final product of Nylon yarn was obtained the said Polymer Chips formed part of an uninterrupted integrated process of manufacturing Nylon yarn and there was no removal or issuing out of the Polymer Chips within the meaning of Rule 49 read with Rule 9 of the Excise Rules. The decision is not helpful in the circumstances of the present case for there can be no dispute with the proposition that an intermediately product used for obtaining an end product in a single uninterrupted process would not attract duty. The intermediate product would, however, attract duty if it is obtained by one process and is used for being converted into another product by a separate distinct process. In the present case, as we have already held, the oil in question itself was not converted into any other product and its production come to an end once it reached tanks 170 and
171. Whether there would be a removal in this case is a different matter to which we shall presently advert but it cannot be said that the oil in question can be equated to Polymer Chips in the Bombay case.
22. Reference was then made to the decision of a learned Single Judge of this Court in Civil Writ No. 115-D of 1963, J.K. Synthetics Ltd., Kota v. The Collector of Central Excise, Delhi, Central Revenue Buildings, Mathura Road, Delhi, decided on 28th August, 1979. This was a case in which the petitioner-company which has a factory at Kota for manufacturing Nylon-6 Yarn was assessed to duty on the import of 'Caprolactum' under Item No. 28 of the I.C.T. and the end product i.e. Nylon-6 Yarn was again assessed to Central Excise Duty. The imported Carprolactum has to be first ploymerised and from the polymerised chips thus obtained the Nylon yarn is manufactured. The Polymer Chips are not sold as such in the market and the petitioner used the same entirely in the process of manufacture of Nylon yarn. It was contended that the Polymer Chips could not be regarded as plastics not other-vise specified under Item No 15A(iii) of Schedule I of the Excise Act and so, no duty was payable on Polymer Chips. The question in the case was whether the Polymer Chips fell under Item No. 15A (iii) i.e. "Plastics not otherwise specified". It was also urged that in the process of manufacture of Nylon yarn adopted by the petitioner-company there was no removal of the Polymer Chips and so, in any case, duty cannot be levied on the same in view of the provisions of Rule 49 read with Rule 9, Rajindar Sachar, J. held that Polymer Chips produced by the petitioner-company were not covered by Item No. 15A(iii) of the First Schedule to the Excise Act and on this ground allowed the petition. The learned Judge, however, observed that it was not necessary to give any decision on the point of removal but did notice the judgment of Tulzapurkar, J. of the Bombay High Court to which reference has been made earlier and observed that judgment proceeded on the basis that the Excise Act did not contemplate the imposition of excise levy on a continuous and integrated process until the Rules were amended by the introduction of Rule 173A and 173K. in May, 1969. Therefore the judgment in Civil writ No. 155-D of 1963 is also of no avail to the petitioner.
23. We may now advert to the question of removal which is pertinent in view of Rule 9 of the Excise Rules for collection of Excise Duty.
24. Rule 9, which we have read earlier, in terms lays down that no excisable goods shall be removed from any place where they are produced, or any specified premises appurtenant thereto, whether for consumption, export or manufacture of any other commodity in or outside such place until the excise duty leviable has been paid. The Rule thus contemplates the city on manufacture as the place from where removal has to take place whether for consumption, export or manufacture of any other commodity. It obviously makes no reference to the plant or equipment. But where there are two distinct plants within the same factory premises removal can take place either outside the factory premises or within the factory premises if the product obtained by working of one plant is sent to another plant for obtaining another product. There can be no removal of a product within the plant itself so long as the product is in the process of manufacture. There can be removal only if the product goes out of one stream of production into another stream of production or if the product is issued out of or taken out or consumed if no further processing of that product is to be done. The Rule also contemplates that consumption within the place of manufacture would also amount to removal. The consumption of the product contemplated by Rule 9 is consumption of the product by itself and not for converting it into another product, as in the case of Polymer Chips. The integrated continuous process content plated by Rule 9 read with Rules in Chapter 7A comes to an end when no further processing is to be done of that particular product and thereafter If such product is utilised for consumption or what in excise parlance is known as "home consumption" or exported or used for manufacture of any other commodity in or outside the place of manufacture the excise levy is attracted. We cannot persuade ourselves to agree with the contention raised on behalf Of the petitioner that the consumption of this oil for heating purposes is part of the process of manufacture and no removal takes places from the plant. The moment oil goes out of the pipe-line for consumption as fuel for furnaces and not for being converted into any other product whether within or out of the factory it amounts to removal within the meaning Rule 49 read with Of Rule 9. The continuous process of manufacture comes to an end or as Mr. Mukerjee, the learned counsel for Union of India contended, it snaps. There is no putting back of this oil into the process of manufacture if it is consumed for lighting furnaces or for heating the equipment. It is no longer in the line of production like part of the oil going from the Crude Unit to the P.D. Unit and thereafter to the bonded tanks after being blended with cutter stock. In that view of the matter whether this oil is described as furnace oil or Burner Fuel Oil is immaterial and is the question of its marketability. Accordingly, the meaning to be given to the word "production" as commercial production has also no relevance. It is not in dispute that in the present case the entire refinery was "the place" within the meaning of Rule 9. Tanks 170 and 171 are obviously storage tanks and not a pipe or plant or equipment in which any processing is done. We, are, therefore, of the view that the oil in question was not only a finished product, it not only went out of the continuous integrated process of manufacture of other petroleum products but also that when it was removed to or from tanks 170 and 171 "excisable goods" would be removed for consumption within the factory or the place of manufacture : but this very oil when it goes to the Blending Unit via the P.D. Unit is not being removed within the meaning of Rule 49 read with Rule 9 and continues to be in the pipe-line for manufacture of an end product. Where, however, such oil, whether blended or not blended with cuter stock flows into tanks 170 and 171 from the Bonded Tank, it again attracts the levy, for the flow into tasks 170 and 171 is not for the purposes of congesting the oil into any other product but only for being stored to be consumed in the furnace.
25. Mr. Palkhiwala mentioned by way of illustration the use of bagasse in sugar mills which is obtained as a by-product in crushing sugarcane. Bagasse, as is commonly known, is used as fuel for heating the boilers in sugar mills. It has not been shown to us whether bagasse attracts excise levy but even if it did, it will make no difference to the proposition of law for if in a particular plant use of bagasse forms an integrated process, it would attract levy.
26. We may mention one other point which was urged on behalf of the petitioner and that is that claim 1A having been allowed by the order dated 14th June, 1965 the same could not be rejected by the order of another Assistant Collector passed on 3rd September, 1965. The contention is that the statute gives no power of review to any officer and so the order of 3rd September, 1965 was without jurisdiction inasmuch as this order could not review the earlier order dated 14th June, 1965. In this behalf our attention was invited to the decision of the Supreme Court in Harbhajan Singh v. Karam Singh and Ors., A.I.R. 1966 Supreme Court 641. It was held in construing the scheme of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 that inasmuch as no court or authority has power of setting aside an order which has been properly made unless it is given by statute, an order once made by an authority cannot be reviewed unless there is a specific provision giving the power of review. If the order of 3rd September, 1965 amounts to a review of the order dated 14th June, 1965 as far as it relates to claim 1A then no doubt it must be set aside but in our view the order of 14th June, 1965 makes it clear that Claims 1B and 2 were specifically rejected and against that the petitioner could file an appeal, as it did. Regarding claim 1A it is in terms stated that the claim was being sent for pre-audit and the petitioner would hear about it again. The contention that claim 1A was with regard to undisputed items which were separated at the instance of the excise authorities from the disputed items comprised in claims 1B and 2 has no force for as would be evident claim 1A relates to the oil received in tanks 170 and 171 direct from the Crude Unit and which did not undergo any other or further process of manufacture as could be claimed for oil coming into tanks 170 and 171 either from the P.p. Unit or through the Bonded Tank via the P.D. Unit and the Blending Unit. It is the oil covered by claims 1B and 2 about which there was some dispute of further processing and this dispute not being there in respect of oil coming direct from the Crude Unit to tanks 170 and 171 the same was separated from the consolidated claims earlier made by the petitioner. The very fact that this claim 1A was sent for pre-audit shows that the claim was not admitted till pre-audit was done as was required under the various financial regulations. Indeed, as would be clear on a reading of Rule 136 of the Treasury Rules of the Central Government no claims against the Government, other than those by one department against another or by a State Government, not preferred within a year of their becoming due can be presented without an authority from the Accountant-General with certain exceptions. The petitioner's claim undoubtedly was more than one year old and before any sanction for payment of the same could be issued the authority of the Accountant-General was necessary and that is what is meant by pre-audit. Therefore, the claim could not have been admitted by the Assistant Collector on 14th June, 1965 and the fact of his sending the claim for pre-audit shows that in order to entertain that claim or make that claim the excise authorities had first to send that claim for pre-audit and thereafter pass orders sanctioning or refusing the claim. No question of review, therefore, arises and the order of 3rd September, 1965 cannot be regarded as one passed reviewing the order dated 14th June, 1965. Indeed, no such point was ever taken by the petitioner either before the Appellate Authority or the Revisional .Authority.
27. Mr G.L. Sanghi, who appeared for the Collector of Excise raised some technical objections to any relief being granted to the petitioner. These are not very relevant in the view that we have taken but all the same we may briefly notice the same.
28. The first contention on behalf of the Collector was based on Rule 11 of the Excise Rules which provides that no duties or charges which have been paid or have been adjusted in an account current maintained with the Collector under Rule 9 and of which repayment, wholly or in part, is claimed in consequence of the same having been paid through inadvertence error or misconstruction shall be refunded unless the claimant makes an application for such refund within three months from the date of such payment or adjustment, as the case may be. Admittedly, the various amounts claimed had been paid more than three months prior to the lodging of the claim. It was therefore, urged that inasmuch as the petitioner's case is that it paid the amount through inadvertence, error or misconstruction and the application for refund has been made more than three months from the date of payment, the duty is not refundable and there is no power to condone the delay in making the application similar to Section 5 of the Limitation Act. The contention is that reliefs contrary to a statutory provision like Rule 11 cannot be given. This plea has not been specifically taken in the affidavit filed on behalf of the Collector but in paragraph 4 of the counter-affidavit there is a mention of laches and delay. It is contended that law as such need not be pleaded and the specific provisions of the statue could always be relied upon if pleaded only generally. There being no right to claim a refund there is no legal duty cast upon the respondents which can be enforced by mandamus. To this the reply of the respondent is that .the Government itself invited claims by its letter dated 4th June, 1963 which would amount to relaxation on 3rd August, 1963 and in that very month the consolidated claim was preferred. Indeed, none of the excise authorities rejected the claim of the petitioner by invoking Rule 11.
29. On behalf of the Collector our attention was invited to a decision of the Supreme Court in Kalyan Singh v. State of Uttar Pradesh and Ors., A.I.R. 1968 Supreme Court 1183. This was a case under the Motor Vehicles Act wherein the question arose whether the rights of the appellant were extinguished by promulgation of a scheme and issue of notification cancelling the appellant's permit. It was observed that after the cancellation of his permit tee permittee appellant could not maintain a petition under Article 226 of the Constitution because the right to maintain such a petition postulates a subsisting personal right in the claim which the petitioner makes and in the protection of which he is personally interested. Inasmuch as the permit was validly terminated the appellant had no right which he could enforce when he moved the court. It may be, as provided in Section 39 of the Limitation Act that the limitation for moving such an application for refund would be three months but then we would not like to comment on this aspect. Admittedly, the petitioner was paying duty on the oil in question as furnace oil right till 1962/1963 and it was only after the relaxation was made in 1963 and claims were invited by the letter dated 3rd August, 1963, addressed to the petitioner, that the question of claiming the refund arose. On receipt of the letter dated 3rd August, 1963 the petitioner lost no time in preferring a consolidated claim. The authorities concerned also did not invoke Rule 11. In that view of the matter we cannot reject the contention of the petition outright on the basis of Rule 11 or on the ground of laches and delay. A suit for recovery of the amount may today be barred and may tend to bar the remedy under Article 226 of the Constitution also keeping with the rule laid down by the Supreme Court in Tilokchand Motichand and Ors. v. H B. Munshi and Anr., 1969 (2) S.C.R. 824 but then the circumstances of the case in which the applications for refund were invited have also to be kept in mind. Therefore we are not inclined to reject the petition on these technical objections. Indeed, as was observed by a Bench of the Patna High Court in Rohtas Industries Ltd. v. Union of India, , Section 40 Sub-section (2) of the Excise Act bars
the institution of any suit or legal proceedings only when such a suit or legal proceedings relates to or is directed against anything done or ordered to be done under the Act and Rule 11 is attracted only if there is inadvertence, error or misconstruction and may not be attracted if refund is claimed on equitable grounds. Further, as was observed in S. Kirpal Singh Duggal v. Municipal Board, Ghaziabad, , the rule may only be a rule of procedure and not a condition precedent to the marking of a claim and the rule may only entitle the excise authorities to decline to refund the duty departmentally and relegate the claimant to a suit.
30. It was also urged on behalf of the respondents that there is no manifest error in the impugned orders which "shock the conscience of the court" so as to call for interference under writ jurisdiction. In the view that we have taken it is not necessary to dilate upon this aspect.
31. The result is that this petition fails and is dismissed with costs.