This writ petition coming on for hearing on Tuesday the 8th, Monday the 15th, Tuesday the 16th, Thursday the 17th, Wednesday the 23rd, Monday the 28th and Wednesday the 30th days of April, 1986 and Friday 2nd day of May, 1986 upon perusing the petition and the affidavit filed in support thereof the order of the High Court dated 19-3-1986 and made herein, and the counter and Reply affidavits filed herein and the records relating to the prayer aforesaid comprised in the return of respondent to the Writ made by the High Court, and upon hearing the arguments of Mr. U.N.R. Rao for M/s. C. David, R. Vijayandran and Miss Sathya Rao, Advocates for the petitioner, and of Mr. K. Jothi, Additional Central Government Standing Counsel on behalf of the respondent, the Court made the following order :-


The petitioner is a partnership firm carrying on business under the name and style of S.P.S. Jayaram & Company manufacturing 'Gopal Tooth Powder'. It has come forward with this proceeding under Article 226 of the Constitution of India for the issue of a writ of mandamus or any other order or direction in the nature of a writ of mandamus directing the respondent not to apply any of the provisions of Act 1 of 1944 and Act 5 of 1986.


2.To sustain the relief claimed in this petition, Mr. U.N.R. Rao, learned Senior Counsel for the petitioner urged 4 points, 2 of them touching on the maintainability of the proposed action by the respondent to assess the petitioner's products named 'GOPAL TOOTH POWDER (PACKETS), GOPAL TOOTH POWDER (TIN BOUND) and JBT TOOTH POWDER' to excise duty while the others relating to the merits. Yet another contention is that the respondent is disabled from taking any action against the petitioner by virtue of the doctrine of 'equitable estoppel'.


3.It is convenient to advert to the arguments relating to maintainability. On an earlier occasion, the petitioner approached this Court in W.P. No. 4694 of 1978 S.P.S. Jayaram & Company rep. by Managing Partner S.P.S.Salvarajv.Assistant Collector of Central Excise, Madurai-14seeking the relief of forbearing the respondent from enforcing the communication of the respondent dated 25.11.1978 issued to the petitioner. An order came to be passed in the said writ petition on 14.10.1981 granting two month time to the respondent to follow the procedure as known to the respondent for taking a decision as to the applicability or otherwise of the provisions of Act 1 of 1944 (Central Excises and Salt Act, 1944) to the petitioner's company and adjourning the proceeding to 14.12.1981. Pursuant thereto, the Additional Collector of Central Excise, Madurai-2 in his reference C.No. V/60/15/3/78CX 3/ Order No. 32/81 dated 10.12.1981 had stated as follows:


"After having considered all the evidence on record, I am satisfied that there is no case to be made out. Under the circumstances, I hereby drop all case proceedings and order the seized goods to be released to the party" *


On 14-12-1981, the writ petition was allowed by this Court. It is therefore contended by the learned Senior Counsel for the petitioner that the respondent is bound by the communication dated 10.12.1981 issued by the Additional Collector; in other words, even a quasi-judicial authority is bound by the principles of 'constructiveres judicata'. To put it differently, in the teeth of the communication dated 10.12.1981 issued by the Additional Collector, the respondent is not entitled to take up the issue once over and decide whether the products manufactured by the petitioner are subject to excise duty while on the other he is bound by the order made by him on 10.12.1981. In this connection, he relied upon the decision of the Supreme Court inOrient Paper Millsv. Union of India-1978 (2) ELT 382, 1970 AIR(SC) 1498, 1970 (3) SCC 76 : 1978 (2) ELT 382, 1970 AIR(SC) 1498, 1970 (3) SCC 76

However, he conceded that if there is a change in the circumstances or in the law, then, the principle of 'constructiveres judicata'will not stand in the way of the respondent taking any action. Indeed, such is the principle settled by the above decision. The same principle was reiterated by the Delhi High Courtin J.K. Synthetics Ltd. and Anotherv.Union of India and Others, 1981 ELT 328) and it is worthwhile to refer to the principle, namely, an authority can depart from his earlier stand only for cogent reasons, such as fresh facts are brought on record or the process of manufacture has changed or the relevant Tariff entry has undergone modification or subsequent to the earlier decision, there has been a pronouncement of a High Court or the Supreme Court which necessitates the reconsideration of the issue. In this case, as rightly pointed out by Mr. Jothi, learned Additional Central Government Standing Counsel, there is a change in the principle of law. In the supplemental affidavit filed on behalf of the petitioner in W.P. No. 4894 of 1978 S.P.S. Jayaram and Company rep. by Managing Partner/S.P.S.Salvarajv.Assistant Collector of Central Excise, Madurai-14, the petitioner has referred to the definition of Section 2(m) of the Factories Act and submitted that the petitioner's premises where the manufacturing process is carried on will not fall under the said definition. The case of the respondent herein is that proceeding as could be seen from his counter is that the petitioner's premises is a factory manufacturing goods and is not exempted from the levy of excise duty because its clearance in the year 1976-77 had exceeded Rs.30 lakhs. It is further stated in the said counter that the petitioner will have opportunity to prove its contentions about the number of persons employed through the attendance register. Thus, one of the points urged by the petitioner is that its premises is not a factory within the meaning of section 2(m) of the Factories Act, 1948 and therefore the products manufactured by it are not subject to excise duty. It may not be out of place to refer to the petitioner's letter dated 20.11.1980 addressed to the Assistant Collector of Central Excise, Madurai-2 wherein it is stated :


"Ours is not a 'Factory' conforming to the definition of factory under Section 2(m) of the Factories Act'.


It is common ground that the factory concept has no relevance now in determining whether the petitioner's products are subject to excise duty or not. Thus, it is factually established that there is a change in the application of law and therefore the petitioner is not entitled to call to its aid the principle of 'constructiveres judicata'.


4.In the view I am taking it is unnecessary for me to advert to the argument advanced by the learned Counsel for the respondent that the order dated 10.12.1981 passed by the Additional Collector is not an order passed by the adjudicating authority and therefore, it is not open to the petitioner to plead the principle of 'constructiveres judicata'. In any event, I find that such a contention is hardly tenable because, ultimately this Court allowed W.P. No. 4694 of 1978. So too, it is unnecessary to examine whether the order dated 10-12-1981 can be treated as an order passed by quasi-judicial authority because, according to the learned Counsel for the respondent, what was communicated to the petitioner is that the action was dropped.


5.The other point advanced by the learned Senior Counsel for the petitioner is that unless the petitioner's products satisfy the Indian Standard specifications and the Drugs and Cosmetics Act, 1940


6.Let me now turn to the argument relating to 'equitable estoppel'. I hasten to add that the basic ingredient necessary to sustain the principle of equitable estoppel is wholly absent in this case. It is too difficult to find from the averments in the affidavit of the petitioner or from the documents produced by it that there was any representation either in words or by conduct of the respondent which was acted upon by the petitioner. Unless this basic ingredient is established there is no scope for the application of the doctrine of equitable estoppel. Hence, this point also fails.


7.The law is well settled that so far as fiscal statutes are concerned, their application depends entirely upon the language found in the enactment and should there be any ambiguity in the language employed, it has to be interpreted in favour of a citizen and against the Revenue. So too, there can be no presumption as to a tax. In other words, the right to tax has to be found in the enactment itself and not elsewhere. If any authority is needed, reference may be made to the judgment of a Division Bench of this Court in W.A. No. 41 of 1980 dated 29.4.1986. This requires reference to the particulars as to how and from what ingredient, the petitioner's products, namely, 'Gopal Tooth Powder (Packets), Gopal Tooth Powder (Tin Bound) and Jet Tooth Powder' are manufactured. According to the petitioner, the products are composed of (i) Sacred ash (Vibuthi) 07.5%; (ii) Calcium Carbonate 1.00% and (iii) Sodium Bicarbonate 1.00% plus sweetening agent, colouring agent and flavours. It is submitted by the petitioner that this ash or Vibuthi is cleaned, coloured and medicated. It is seen from the supporting affidavit of Dr. Jacob Groves Denial filed by the petitioner that ash (Vibuthi) undergoes the following different mechanical processes. According to him, the following are the processes in respect of a bag of 50 kgs. of Vibuthi-ash.(i) The ash is sieved manually. There is machinery for mechanical sieving as well. Mud, sand and bigger particles of ash are separated from the finer grains of ash.


(ii) The above is mixed with a mixture of Calcium Carbonate and Sodium Bicarbonate weighing 1/2 Kg. (1%).


(iii) The above mixture is further mixed with pink food colour plus saccharin weighing 100 gms. Ratio is 1:500. Mixing is done by hand.


(iv) To the above is added 358 ml. of a flavouring mixture consisting of camphor (Karpooram), Thymol (Sms Uppu), Manthol (Puthia Uppu). This is highly volatile. The mixing is done manually and the product is hand-seived once again Resultant product is packed in callaphane/Kraft paper packets of 20 gms. each'.


8.Immediately it is necessary to notice that the excise duty is leviable on the manufacture of goods but not on the sale. The immediate question, therefore, is whether the transformation of ash into tooth powder is a manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944. Section 2(f) reads :" *


Manufacture includes any process incidental or ancillary to the completion of a manufactured product".


I am excluding the other sub-sections as they are not relevant for my present purpose. As rightly pointed out by the Rajasthan High Court inRamnugar Cane and Sugar Company Ltd. Jaipur and Othersv.Union of India and others, 1983 ELT 6) the definition of 'manufacture' is inclusive and the eight clauses appended to the definition are merely illustrative and not exhaustive. In my interpretation the ingredients of a manufacture as visualised by Section 2(f) are : (a) There must be a transformation; (b) From such transformation, a new and different article must emerge, and (c) Such new article must have a distinct name as a commercial commodity of its character or use should be different from its component part or parts.


9.Before I proceed further, it is convenient at this stage to advert to the argument advanced by the learned Senior Counsel for the petitioner to the effect that unless tooth powder is 'dentifrice' it will not come under Tariff 33.06. According to Tariff 33.06, any preparation for oral or dental hygiene, including dentifrices (for example tooth paste and tooth powder) and denture fixative pastes and powders is subject to excise duty at 15%. According to the learned Senior Counsel for the petitioner, 'dentifrice' is not described in the Act and he had taken much pains, in this connection to refer to a book called 'A Textbook of Preventive Dentistry' by Richard E. Stallord, D.D.S., Ph.D., Adjuct Professor, School of Public Health, University of Minnesots, Minnespolis, Minnasota and the affidavit of Dr. Jacob Graves Daniel, he had referred to 10 text books of different authors and had stated that as a result of his study of the said books on the subject of dentifrice, he is persuaded to conclude that ash of any kind cannot be used as an ingredient of a dentifrice. It is, therefore, contended by the learned Senior Counsel for the petitioner that ash will never be a dentifrice and therefore tooth powder made out of ash will never be dentifrice and hence will fall outside the purview of Tariff Item No. .33.06. There are several fallacies in this argument. Taxable item is not dentifrice; on the other hand, any preparation for oral or dental hygiene including dentifrices (for example, tooth paste and tooth powder) and denture fixative pastes and powders is made 'taxable. The genus, therefore, is a preparation of oral or dental hygiene while the species are dentifrices. In turn, dentifrices include tooth paste, tooth powder etc. When the taxable item itself should indicate what is meant by dentifrices, it is wholly unnecessary to look for its meaning especially when the meaning can be understood from the examples indicated in the said item. According to the said item, toothpaste and tooth powder are examples for dentifrices in other words, tooth paste and tooth powder fall under the category of 'dentifrices'. Indeed, according to Webster's Dictionary 'dentifrices' means tooth powder. Even according to Chambers 20th Century Dictionary of 1983 Edition, the meaning of dentifrice is given as 'a substance used in rubbing or cleaning the teeth - tooth paste or tooth powder. Therefore, the argument that the petitioner's products are not dentifrices and therefore they will not fall under Tariff Item 33.06 carries no merit.


10.Let me now revert to the point whether there is a manufacture when the ash is transformed into tooth powder as contemplated by Section 2(f) of the Act. In this case, there is a transformation when ash is converted into tooth-powder. In other words, a new and different article emerges and such new article has a distinct name as a commercial commodity, i.e., what was ash originally is turned into tooth powder. It is needless to state that these are two different commercial commodities commonly or popularly known. After ash, Vibuthi is transformed into tooth powder, its use as well as its character become different. In other words, there is such a transformation as to produce a different article which bears by itself a commercial name quite different from its component part and is put to use different from its component part. The learned Senior Counsel for the petitioner would point out that even now ash is being used for cleaning teeth. I must immediately state that such use is only out of necessity. To put it differently, when the user has no means to buy tooth powder or when the tooth powder is not readily available, resort is made to the use of ash. It may not be out of place to point out that even the charcoal powder or brick powder is being used by the people at lower rungs and this is also out of necessity. Such users never call neither ash nor charcoal powder nor brick powder as tooth powder. Therefore, such use by itself will not be a decisive factor in determining whether a transformed product has a distinct use quite different from its component part. As a matter of fact, the petitioner does not market its product as medicated or scented ash. On the other hand, it takes care in naming the transformed product as 'tooth powder'. Therefore, it is too late in the day to doubt that ash-Vibuthi and tooth powder are two different and distinct commercial commodities. If, after transformation, Vibuthi is turned into tooth powder and is sold as such, it is no more open to the petitioner to contend that there is no change either in the use of ash-Vibuthi or in the transformed product tooth powder by the process employed by the petitioner, ash is transformed into tooth powder. By such process, there is a completion of a manufactured product. In other words, at the completion of such process, we have a new end product namely, 'tooth-powder'. To put it differently, but for the above process, there would not be a new end-product, namely, 'tooth powder'. Thus, the process is not only incidental or ancillary but is essential to the completion of a manufactured product, namely, 'tooth powder'.


11.Indeed in the decision in theDivisional Commissioner, Sales Tax, Ernakulamv.M/s. PIO Food Packers 1980 AIR(SC) 1227, 1981 ECR 47, 1980 (6) ELT 343, 1980 (46) STC 63, 1980 (S) SCC 174, 1980 (3) SCR 1271, 1980 TaxLR 1706, 1980 SSCC 174, 1981 UPTC 667, 1980 Suppl(SCC) 174, 1980 E(LT) 343, 1980 Supp(SCC) 174, 1980 SCC(Tax) 319 at 1229 1980 (45) STC 58, 1980 (1) SCC 142, 1980 (1) SCR 938, 1980 UJ 210, 1980 AIR(SC) 611, 1980 TaxLR 1603, 1980 UPTC 524, 1980 ELT 343, 1979 KLT 871, 1980 SCC(Tax) 70 (SC)] and inEmpire Industries Ltd.v.Union of India- 1986 AIR(SC) 662, 1985 (S1) SCR 292, 1985 (3) SCC 314, 1985 (1) SCALE 1269, 1985 (20) ELT 179, 1986 (162) ITR 846, 1986 (81) TAXATION 265, 1985 ECR 1169, 1985 SCC(Tax) 416, 1987 (64) STC 42 (SC) 1986 AIR(SC) 662, 1985 (S1) SCR 292, 1985 (3) SCC 314, 1985 (1) SCALE 1269, 1985 (20) ELT 179, 1986 (162) ITR 846, 1986 (81) TAXATION 265, 1985 ECR 1169, 1985 SCC(Tax) 416, 1987 (64) STC 42] a passage from American decision is quoted with approval and it is worthwhile to reproduce the same and it is as follows :" *


Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge, having a distinctive name, character or use [1907 52 L.Ed., 336 at 338]'.


Even the decision inEmpire Industries Ltd. v.Union of India- 1986 AIR(SC) 662, 1985 (S1) SCR 292, 1985 (3) SCC 314, 1985 (1) SCALE 1269, 1985 (20) ELT 179, 1986 (162) ITR 846, 1986 (81) TAXATION 265, 1985 ECR 1169, 1985 SCC(Tax) 416, 1987 (64) STC 42 (SC) which preferred to the decision inUnion of India and Anotherv.Delhi Cloth and General Mills Co. Ltd. and Others 1963 AIR(SC) 791, 1990 (27) ECR 151, 1963 (S1) SCR 586, 1977 (1) ELT 199, 1946 AIR(Cal) 317, 1971 AIR(Mys) 365) = 1977E.L.T.(J 199) quoted with approval the following passage inUnion of Indiav.R. Mansukhrai, EBWARI - 1978 (2) SCC 472 at 477).


"The word 'manufacture' is defined in Section 2(f) of the Act as including any process incidental or ancillary to the completion of a manufactured product. The rolling of a billet into a circle is certainly a process in the course of completion of the manufactured product, viz., circles. In the present case, as we have already indicated earlier, the product, that is sought to be subjected to duty, is a circle within the meaning of that word used in Item 26-A(2). In the other two cases which came before this Court, the articles mentioned in the relevant items of the First Schedule were never hold to have come into existence, so that the completed product, which was liable to excise duty under the First Schedule, was never produced by any process. In the case before us, circles in any form are envisaged as the completed product produced by manufacture which are subjected to excise duty. The process of conversion of billets into circles was described by the Legislature itself as manufacture of circles" *


12.As a matter of fact, I had the benefit of a recent ruling of a Division Bench of this Court to which I was also a party in W.A. No. 411 of 1980. The processes involved in that case are: drilling, trimming and tailoring to suit the requirements and conveniences of the customers. Except drilling, trimming and tailoring, the brake linings suffered no change. Yet, the Division Bench held that the product which the petitioners before it purchased from M/s. Rane Brake Linings Ltd., Madras and other manufacturers of brake linings are obviously unfinished products and they cannot be put to the utility for which they are meant unless the processes which the petitioners adopted or resorted to are completed and therefore, certainly the mischief of 'manufacture' as defined in Section 2(f) of the Act is attracted. Till the unfinished brake lining is trimmed, drilled and tailored, it cannot be used by the customer for the purpose for which it is meant. Drilling, trimming and chamfering lead to the completion of a manufactured product, namely, brake lining adaptable to the use in a particular vehicle. The facts in this case stand on a stronger footing than those in the case in W.A. No. 411 of 1980. After ash is transformed into tooth-powder, it loses not only its identity but also its commercial name, character and use. It might be that if the tooth powder is put into the water, the ash can be obtained. But this is wholly irrelevant in the teeth of the definition of 'manufacture' occurring in Section 2(f) of the Act. I have already pointed out that by the process adopted by the petitioner, what was originally ash was turned into tooth powder which has a distinct and different name as a commercial commodity and which has a character and use quite different from its component part, namely, ash-Vibuthi. To reiterate, the process had led to the completion of a manufactured product namely, tooth powder. Thus, there is no escape from the conclusion that the process adopted by the petitioner is a manufacture within the meaning of Section 2(f) of the Act and therefore, its products 'Gopal Tooth Powder (Packets), Gopal Tooth Powder (Tin Bound) and Jet Tooth Powder' are subject to excise duty.


13.The Division Bench in W.A. No. 411 of 1980 = 1980 ELT 775 (Mad.) TheBrakes India Ltd. Padiv.The Superintendent of Central Excise & 2 Othershad noticed several decisions such asUnion of India and Anotherv.Delhi Cloth and General Mills Co. Ltd. and Others 1963 AIR(SC) 791, 1990 (27) ECR 151, 1963 (S1) SCR 586, 1977 (1) ELT 199, 1946 AIR(Cal) 317, 1971 AIR(Mys) 365 = 1977E.L.T.(J 199);South Bihar Sugar Mills Ltd. and Anotherv.Union of India and Another 1968 AIR(SC) 922, 1989 (25) ECR 447, 1968 (3) SCR 21, 1978 (2) ELT 336, 1968 (2) SCJ 433) = 1978E.L.T.J 336 (SC);Union of Indiav.Hindu Undivided Family Business known as Kamla Mansukhrai Redari and Another 1971 AIR(SC) 2333, 1970 (2) SCC 472, 1971 (1) SCR 936, 1978 (2) ELT 389) = 1978E.L.T.(J 389) (SC);Allenbury Engineers Pvt. Ltd.v.Shri Ram Krishna Dalmia and Others 1973 AIR(SC) 425, 1990 (28) ECR 139, 1974 RCJ 24, 1973 RCR 300, 1973 (1) SCC 7, 1973 (2) SCR 257, 1973 UJ 398), E

xtrusion Processors Pvt. Ltd.v.N.R. Jadhav, Superintendent of Central Excise and Others- 1974 TaxLR 1655);Metro Readywear Companyv.Collector of Customs 1976 KLT 642) = 1978E.L.T.(J 520) (Ker.);The Deputy Commissioner Sales Tax, Ernakulamv.M/s. PIO Food Packers 1980 AIR(SC) 1227, 1981 ECR 47, 1980 (6) ELT 343, 1980 (46) STC 63, 1980 (S) SCC 174, 1980 (3) SCR 1271, 1980 TaxLR 1706, 1980 SSCC 174, 1981 UPTC 667, 1980 Suppl(SCC) 174, 1980 E(LT) 343, 1980 Supp(SCC) 174, 1980 SCC(Tax) 319 : 1980 (45) STC 58, 1980 (1) SCC 142, 1980 (1) SCR 938, 1980 UJ 210, 1980 AIR(SC) 611, 1980 TaxLR 1603, 1980 UPTC 524, 1980 ELT 343, 1979 KLT 871, 1980 SCC(Tax) 70 (SC);Empire Industries Ltd. & Othersv.Union of India and Others 1986 AIR(SC) 662, 1985 (S1) SCR 292, 1985 (3) SCC 314, 1985 (1) SCALE 1269, 1985 (20) ELT 179, 1986 (162) ITR 846, 1986 (81) TAXATION 265, 1985 ECR 1169, 1985 SCC(Tax) 416, 1987 (64) STC 42 (SC)] and as I am bound by the decision of the Division Bench, I am avoiding referring to several citations brought to my notice by the learned Senior Counsel for the petitioners. They are :Commissioner Sales Taxv.Dechu Ram Kishorilal 1976 (38) STC 236);Colgate Palmolive (India) Ltd.v.Union of India and Others 1980 ELT 268 (Bombay)];State of Tamil Naduv. Natarajan 1981 (48) STC 315Mad.);Deputy Commissioner of Sales Taxv.PIO Food Packers 1980 AIR(SC) 1227, 1981 ECR 47, 1980 (6) ELT 343, 1980 (46) STC 63, 1980 (S) SCC 174, 1980 (3) SCR 1271, 1980 TaxLR 1706, 1980 SSCC 174, 1981 UPTC 667, 1980 Suppl(SCC) 174, 1980 E(LT) 343, 1980 Supp(SCC) 174, 1980 SCC(Tax) 319);Commissioner of Sales Taxv.Dunken Coffee Mfg. Co. 1975 (35) STC 493);State of Gujaratv.Sukhram Jagannath 1982 (50) STC 76 );B. Dar Laboratoriesv.State of Gujarat 1968 (22) STC 160 (Guj.)] andState of Maharashtrav.C.P. Manganese Ore 1977 AIR(SC) 879, 1977 (1) SCR 1002, 1977 (1) SCC 643, 1977 (39) STC 340, 1977 (6) CTR 56, 1977 TaxLR 1861, 1977 SCC(Tax) 211. 14.In the result, the writ petition fails and is dismissed with costs. Order :-This petition coming on further orders on this day in the presence of Mr. C. Daniel, Advocate for the petitioner and of Mr. R. Joshi, Additional Central Government Standing Counsel on behalf of the respondent the court made the following order :The writ petition was dismissed with costs by my order dated 2.5.1986. However, I did not fix the costs and therefore, the matter is posted before me. Taking into consideration the points involved, I fix the advocate's fee at Rs. 500 (Rupees Five hundred only).