NATARAJAN J


These two appeals nave been preferred against the common order of Varadarajan, J. as he then was, in two writ petitions, W.P. Nos. 152 and 455 of 1977 filed by the Madras Fertilizers Limited, the respondent herein, for the issue of a Writ of Certiorari and another writ of Mandamus. Aggrieved by the issue of a rule by the learned Judge in the two Writ petitions, the respondents therein have preferred these two writ appeals.


2.The appeals lie within a narrow compass. What the respondent would contend is that an order passed by the Government of India in its order No. 276/76 dated 18.2.1976 has clinched the controversy in favour of the respondent and consequently, the appellants are not entitled to reopen the file and demand payment of excise duty or refuse to refund the excise duty already collected.


3.The facts relating to the matter in debate between the parties are as follows:-


The respondent-company is a Government Company within the meaning of Section 617 of the Companies Act, 1956. The Company has erected a plant at Manali for the manufacture of fertilizers. The plant consists of three units, which are respectively designed to produce Ammonia, UREA AND COMPLEX fertilizers. Central Excise Duty is levied on fertilizers at 15% ad valorem under item 14 HH of the First Schedule to the Central Excises and Salt Act. By means of Notification No. 25/70-C.X dated 1-3-1970, by the Government of India, Ministry of Finance (Department of Revenue and Insurance), the Central Government exempted the whole of duty of excise leviable on mixed fertilizers falling under this item, which are manufactured with the aid of power from two or more fertilizers, on all of which appropriate amount of duty of excise, or, as the case may be, countervailing duty, under Section 2-A of the Indian Tariff Act, 1934, has already been paid. The reason for the grant of this exemption, as has been pointed out inCoromandal Fertilizers Ltd.v.Union of India(W.P. 1400 to 1403/76 order dated 24-9-1976 by Andhra Pradesh High Court) - 1979E.L.T.(J 501) (A.P.) is that if excise duty is to be imposed on mixed fertilizers manufactured from two or more fertilizers, on all of which duty has already been paid, then it would amount to double taxation.


4.In order to avail the benefit of exemption granted under the notification, the respondent applied to the Central Excise authorities for the grant of exemption from payment of excise duty to the complex fertilizers manufactured by it viz. NPK 14-28-14 and NPK 17-17-17. These complex fertilizers are manufactured from out of urea manufactured by the respondent and subject to excise duty at 15% and muriate of potash imported from abroad on payment of countervailing duty.


5.The Assistant Collector refused to grant exemption under the notification on the ground that in the process of manufacture of the two Varieties of NPK, Ammonium Phosphate, which is an independent fertilizer and an excisable item, also becomes a component of the mixed fertilizer and as such, the respondent cannot claim exemption from payment of excise duty on the complex fertilizers.


6.The respondent filed an appeal to the Appellate Collector under Section 35 of the Central Excises and Salt Act. The Appellate Collector dismissed the appeal holding that only such mixed fertilizers are exempt, which are produced by blending, mixing or granulating duty paid fertilizers (2 or more) with any substance wherein such mixture are produced by physical actions and without chemical reactions. But, as in this case, the mixed fertilizer was produced by chemical reaction involving in the process, the presence of another duty payable fertilizer for which excise duty has not been paid, the benefit of exemption cannot be claimed.


7.The respondent then filed a revision to the Central Government under Section 36 of the Act. The Central Government passed an order in Order No. 276 of 1976 dated 18-2-1976 in the following terms :-



"The Order in appeal is based on the contention that the mixture of two or more fertilizers, envisaged in the relevant notification should be by physical action and without chemical reaction and the fertilizers, manufactured by the petitioners are definitely complex fertilizers obtained by chemical reaction and hence they cannot be considered as simply mixtures to attract the exemption in the notification. The said notification does not lay down any such condition and only requires that the mixture can be obtained with the aid of power and the mixed fertilizers should contain not more than one nutrient. Thus, the order in appeal is not a proper speaking order on the issue involved and is set aside, the exemption under the said notification is allowed if the conditions thereof are fulfilled." *


8.Interpreting the Central Government's Order to be in favour of the respondent, the Assistant Collector, Central Excise, wrote to So respondent on 5-3-1976 giving it the benefit of exemption, subject to certain procedural conditions. On the basis of this order, respondent claimed refund of duty paid under protest before 5th March, 1976 after making the necessary adjustments for duty payable on the urea consumed in the manufacture of complex fertilisers and the credit taken for countervailing duty on imported muriate of potash used in the manufacture of the fertilizers. From 5-3-1976 onwards, the respondent started Paying duty on the urea consumed in the manufacture of the complex fertilizers and did not avail the credit for the countervailing duty paid on the imported muriate of potash used in the manufacture of complex fertilizers.


8A.On 7-6-1976, the Assistant Collector of Central Excise, issued another notice and asked the respondent to show cause why the exemption granted should not be withdrawn. The respondent sent a reply and also made oral representations to the effect that its right to claim exemption has already been conceded by the Central Government and as such, it is not open to the Assistant Collector to reopen the matter. The Assistant Collector over-ruled the objections of the respondent and passed an order on 7-1-1977 holding that the NPK complex fertilizers manufactured by the respondent are not eligible for exemption, once again holding that Ammonium Phosphate which is formed with the Chemical reaction of Ammonia and phospheric acid, has not suffered duty and that only urea and nutriate of potash alone had so suffered.


9.It is the correctness of this order, which was challenged before the learned single Judge in W.P. No. 152 of 1977, wherein the respondent sought the issue of a Writ of Certiorari to quash the order of the Assistant Collector. Concurrently, another Petition W.P. No. 455 of 1977 was also filed for the issue of a Writ of Mandamus to the Central Excise authorities to refund the duty paid on complex fertilizers by it on NPK mixtures upto 5-3-1977 after making the necessary adjustments in the duty payable on the urea used in the manufacture and the credit taken for the countervailing duty paid on the imported muriate of potash used in the mixtures.


10.The learned single Judge allowed both the petitions and issued appropriate rules in favour of the respondent. In W.P. No. 152 of 1977, the learned Judge conceded the stand of the appellants that the respondents will not be entitled to claim the benefit of exemption from excise duty for the complex fertilizers manufactured by it; but nevertheless held that the order passed by the Central Government on 18-2-1976 in the revision preferred before it had become final and the said order had been acted upon by the Assistant Collector of Central Excise when he issued the order of exemption dated 5-3-1976 and as such, it was not open to the Assistant Collector to subsequently go back on the order and deny the benefit of exemption of the notification to the respondent. In the other petition, W.P. No. 455 of 1977, the learned Judge held that since the order of the Assistant Collector had been passed without jurisdiction, the respondent is entitled to the refund of the excise duty collected from it and that the availability of an alternate remedy by filing an appeal and a revision to the Appellate Authority and the Central Government, respectively, would not preclude the respondent from invoking the extra-ordinary jurisdiction of the High Court under Article 226 of the Constitution.


11.Arguing the appeals before us, Mr. Somasundaram Additional Central Government Counsel appearing for the appellants urged that the scope and effect of the notification has been considered by the Supreme Court inCoramandel Fertilizers Ltd.v.Union of India-1984 AIR(SC) 1772, 1984 (3) CompLJ 289, 1985 CrLR(SC) 132, 1984 ECR 1853, 1984 (17) ELT 607, 1984 (2) Scale 282, 1984 (S) SCC 457, 1985 (1) SCR 523, 1985 UJ 133, 1985 CRLR 132, 1984 TaxLR 2585, 1984 (3) ECC 98, 1984 SSCC 457, 1984 Supp(SCC) 457, 1984 SCC(Tax) 225 (SC) =1984 AIR(SC) 1772, 1984 (3) CompLJ 289, 1985 CrLR(SC) 132, 1984 ECR 1853, 1984 (17) ELT 607, 1984 (2) Scale 282, 1984 (S) SCC 457, 1985 (1) SCR 523, 1985 UJ 133, 1985 CRLR 132, 1984 TaxLR 2585, 1984 (3) ECC 98, 1984 SSCC 457, 1984 Supp(SCC) 457, 1984 SCC(Tax) 225 and that the very question involved in this case arose for determination before the Supreme Court and the Supreme Court has categorically held that the exemption granted under the notification will be attracted only where mixed fertilizers are produced by mixture of two or more fertilizers which have suffered excise duty and the exemption cannot be claimed where a mixed fertilizer is produced by mixture of not only duty paid items of fertilizers, but also other products viz., sulphuric acid and ammonia. The learned counsel therefore argued that the respondent is clearly in the wrong, when it says that the notification of the Central Government granting exemption to mixed fertilizers would cover the complex fertilizers manufactured by it. The further argument was that the order of the Central Government dated 18-2-1976 did not clinch the issue in favour of the respondent, but on the other hand, the order only sets out the terms of the notification and left the question of the availability of exemption of excise duty to be gone into by the excise authorities in the light of the clarification contained in its order.


12.Taking up the first question for consideration, the scope and effect of the notification of the Government of India, which is relied on by the respondent, came up for consideration inCoramandel Fertilizers Ltd.v.Union of India- 1984 AIR(SC) 1772, 1984 (3) CompLJ 289, 1985 CrLR(SC) 132, 1984 ECR 1853, 1984 (17) ELT 607, 1984 (2) Scale 282, 1984 (S) SCC 457, 1985 (1) SCR 523, 1985 UJ 133, 1985 CRLR 132, 1984 TaxLR 2585, 1984 (3) ECC 98, 1984 SSCC 457, 1984 Supp(SCC) 457, 1984 SCC(Tax) 225 (SC) =1984 AIR(SC) 1772, 1984 (3) CompLJ 289, 1985 CrLR(SC) 132, 1984 ECR 1853, 1984 (17) ELT 607, 1984 (2) Scale 282, 1984 (S) SCC 457, 1985 (1) SCR 523, 1985 UJ 133, 1985 CRLR 132, 1984 TaxLR 2585, 1984 (3) ECC 98, 1984 SSCC 457, 1984 Supp(SCC) 457, 1984 SCC(Tax) 225). In that case also, a mixed fertilizer known as Gromor N.P.K. 14-35-14, for which exemption was claimed was made out of Rock Phosphate and Muriate Potash. The manufacturing process of the fertilizer consisted in treating rock phosphate with sulphuric acid, which produced phosphoric acid. When phosphoric acid was treated with ammonia, Mono and Di-ammonium phosphate in slurry form would come into existence. To the slurry, muriate potash is added and thereafter, the mixed fertilizer comes into existence. During the process, a small quantity of ammonium phosphate is formed. Dealing with the matter, the Supreme Court quoted with approval the judgment of the Andhra Pradesh High Court rendered earlier between the parties. The relevant passage in the judgment of the High Court occurs thus :-


"Undoubtedly Sulphuric Acid is an acid that can be seen not only from the very name it has, but also from the list of acids given in Item 14-G of the First Schedule under the head 'acids' Ammonia, as can be seen from Item 14-H, which is under the heading 'gases', is a gas. Sulphuric Acid and Ammonia are independent commodities which are by themselves eligible to excise duty. In contrast, when we come to Item 14-HH in the first schedule, it deals only with 'fertilizers', it purports to deal with 'fertilizers', of all sorts excluding natural animal or vegetable fertilizers, when not chemically treated. It gives a number of commodities which are treated, under law, as fertilizers. Entry 3 of item 14 HH contains the words which the notification used. It deals with mixed fertilizers manufactured with the aid of power from two or more fertilizers. When in the Act itself this distinction between fertilizers, including mixed fertilizers, on one hand and acids like Sulphuric Acid and gases like Ammonia is pointed out and maintained, it is futile to argue that notification No. 25/70 grants exemption to mixed fertilisers which are manufactured from two or more fertilisers and acids and gases. To say that is only to introduce something which is not in the notification. We are therefore, of the view that Gromor NPK 14 : 35 : 14 is not within the exemption given under the notification.


13.We entirely agree with the views expressed by the High Court. We may also note that the High Court has further aptly pointed out :-


The process of manufacture of NPK 14 : 35 : 14 bringing into existence several other substances, and once again utilising them in the process, treating one substance with the other cannot be" *


said to be mixture of fertilisers as postulated by the notification. So, it will have to be held that NPK 14 : 35 : 14 is not entitled to exemption under Notification No. 25/70."


14.In view of this authoritative pronouncement of the Supreme Court, there is no scope whatever for the respondent to contend that the complex fertilisers manufactured by the respondent are manufactured only from out of urea and muriate of potash and that other ingredients, which are also subject to excise duty, are not involved and they do not constitute components.


15.Mr. Uthama Reddy, learned counsel for the respondent however contended that the sole question for consideration in these appeals is not, whether the respondent is entitled to claim exemption from excise duty on the basis of the notification No. 25/75-CX dated 1-3-1970; but whether the appellants are entitled to call upon the respondents to pay excise duty in spite of the order passed by the Central Government in the revision proceedings. The learned counsel argued that the order of the Central Government was passed before the Andhra Pradesh High Court rendered its judgment in W.P. Nos. 1400 to 1403 of 1976 dated 24-9-1976. [Reported in 1979E.L.T.(J 501) (A.P.)] He would, therefore, say that on the materials before it, the Central Government was satisfied that the complex fertilisers manufactured by the respondent are exempt under the notification. In fact, he went to the extent of saying that the order of the Central Government had been implemented by the Assistant Collector when he passed an order on 5-3-1976 granting exemption to the respondent and thereafter, the Central Excise authorities had becomefunctus officioand had no power under law to reopen the matter and countermand the exemption granted earlier to the respondent. In support of such a contention, Mr. Uthama Reddy citedCollector of Central Excisev.Palappa Nadar ). It has been held in that case that after the appellate Tribunal had passed an order, the original Tribunal stood deprived of its jurisdiction to pass further orders and that without an order of remand, the original Tribunal will have no power to initiatede novoproceedings. The proposition of law enunciated by Mr. Uthama Reddy is undoubtedly a sound one; but what needs consideration is whether the order of the Central Government is a final one and whether the said order has clinchingly held that the respondent is entitled to exemption from payment of excise duty on the complex fertilizers manufactured by it. To determine this question, it is necessary that the order of Government is subjected to scrutiny, as found extracted above. On a close study of the order, it is seen that what the Central Government had done is to lay down that the views of the Appellate Collector on certain matters are not correct and further more, the order 'is not a proper speaking order on the issue involved.' The Appellate Collector had held that only mixed fertilizers, which are produced by physical action and without chemical reaction would be entitled to claim the benefit of exemption. It is this portion of the order, that has been set aside by the Central Government by pointing out that the notification does not lay down any such conditions and that the notification only required the mixture to be obtained with the aid of power and the mixed fertiliser contained not more than one nutrient. The order does not say that by reason of the setting aside of the Appellate Collector's order, the exemption under the notification is readily available to the respondent and as such, it is entitled to the benefit of the notification. On the other hand, the Government's order states that the exemption under the notification would be available to the respondent, if the conditions attached thereto are fulfilled. The last line of the order has to be read harmoniously. The first part of the sentence "the exemption under the said notification is allowed" cannot be read disjunctively without the latter portion of the sentence viz., if the conditions thereof are fulfilled'. We are therefore unable to sustain the contention of Mr. Uthama Reddy in this behalf. For the same reason, we are clearly of the view that the learned single Judge was not right in taking the view that the question has been finally decided by the Central Government in their order dated 18-2-1976 and it is not open to fresh consideration by the Assistant Collector at any subsequent stage.


16.Once such a position is reached, then it follows that the initial order of exemption granted by the Assistant Collector under his order dated 5-2-1976 was a wrong one. The Assistant Collector had not carried out the order of the Central Government, but, on the other hand, he had proceeded on the wrong assumption that the Government's order conferred the benefit of exemption on the respondent's product and that no further examination of the matter was necessary. The mistake committed by the Assistant Collector was soon noticed and hence, a fresh show cause notice was issued on 7-6-1976 and in pursuance of that notice, the impugned order has been passed. We are, therefore, of the view that the impugned order, apart from being in conformity with the decision of the Supreme Court inCoromandel Fertilizers Limitedv.Union of India 1984 AIR(SC) 1772, 1984 (3) CompLJ 289, 1985 CrLR(SC) 132, 1984 ECR 1853, 1984 (17) ELT 607, 1984 (2) Scale 282, 1984 (S) SCC 457, 1985 (1) SCR 523, 1985 UJ 133, 1985 CRLR 132, 1984 TaxLR 2585, 1984 (3) ECC 98, 1984 SSCC 457, 1984 Supp(SCC) 457, 1984 SCC(Tax) 225 is not in contravention of the order of the Government of India in No. 25/70 C.X. dated 1-3-1970 in any manner. Consequently, writ appeal No. 508 of 1980 has to succeed.


17.Taking up writ app. No. 507 of 1980 for consideration Mr. Soma-sundaram argued that the decision in the earlier appeal, will govern the rights of parties in this appeal also. Independent of this argument he also submitted that in any event, the respondent cannot claim th

e benefit of refund because it would lead to unjust enrichment of the respondent. In support of this argument Mr. Somasundaram cited the following authorities:Ogale Glass Works Ltd.v.Union of India, 1979 E.L.T. J 468;Shiv Sankar Dal Millsv.Haryana, 1980-1-S.C.R.1170;Madras Aluminium Co. Ltd.v.Union of India, 1981 ELT 478 (Madras); andUnion of Indiav.New India Industries Ltd.Baroda, 1983 ELT 1763 (Gujarat). In all these cases, it has been held that an assessee should not be allowed to derive unjust enrichment by having the benefit of collection of excise duty from the consumers and also the benefit of refund from the Government. 18.Mr. Utham Reddy cited two decisions, viz.Patel India (P) Ltd.v.Union of India 1973 (2) CTR 242, 1973 AIR(SC) 1300, 1990 (29) ECR 283, 1983 (13) ELT 1495, 1973 (1) SCC 745, 1973 (3) SCR 811, 1973 TaxLR 2146, 1973 (2) CTR(SC) 242, 1973 (2) CTR 2421973 (2) CTR 242, 1973 AIR(SC) 1300, 1990 (29) ECR 283, 1983 (13) ELT 1495, 1973 (1) SCC 745, 1973 (3) SCR 811, 1973 TaxLR 2146, 1973 (2) CTR(SC) 242, 1973 (2) CTR 242- 1973-3-SCR 811 andMaharashtra Vegetable Products P. Ltd.v.Union of India, 1981 ELT 468 (Bombay) taking a contrary view. But though these two decisions take the view that if excise is not collectible then the duty collected should be refunded to the assessee notwithstanding the principle of unjust enrichment being offended, we find the preponderance of judicial opinion to be against the contention of the respondent. The learned single Judge has not considered this aspect of the matter at all; but, on the other hand, the major portion of his discussion is devoted to the right of the respondent to seek remedy under Art. 226 of the Constitution, instead of availing the alternative remedy available to it under the Act. We are therefore, of the view that this appeal too has to be allowed, both on the ground that the respondent is not entitled to claim the benefits under the notification as well as on the ground that unjust enrichment would ensue if refund of excise is ordered. 19.In the result, both writ appeals are allowed and W.Ps. Nos. 152 and 455 of 1977 will stand dismissed. There will however be no order as to costs.