1975 (1) TMI 34 - HC - Central Excise

Invalidation of Censor Certificate Length for Excise Duty: Court rules directive void, film length not excisable.

The directive dated 10th February 1969, mandating the inclusion of the Censor Certificate length of the film for excise duty purposes, was deemed invalid ... Censor Certificate length of films - Classification - Boards' directions - Validity - Supplementary instructions Issues Involved:1. Validity of directive dated 10th February 1969.2. Whether the Censor Certificate length of the film is 'excisable goods' under the Central Excises and Salt Act, 1944.Issue-Wise Detailed Analysis:1. Validity of Directive Dated 10th February 1969:The Petitioners challenged the directive issued by the Central Board of Excise and Customs on 10th February 1969, which mandated the inclusion of the Censor Certificate length of the film for the purpose of excise duty under Item No. 37 of the Central Excise Tariff. The Petitioners contended that the directive fettered the quasi-judicial powers of the Respondents, rendering their decisions a nullity. The argument was based on the principle that quasi-judicial authorities must act independently and impartially, without being controlled by external directives.The Court referred to the Supreme Court's decision in Oriental Paper Mills v. Union of India, which held that quasi-judicial powers cannot be controlled by directions issued by the Board. The Court emphasized that the directive was not merely administrative but went to the root of the matter, leaving no discretion to the authorities. The directive was thus deemed invalid, and its reliance by the Respondents vitiated the proceedings, making the orders and demand notices issued pursuant to it without jurisdiction.2. Whether the Censor Certificate Length of the Film is 'Excisable Goods':The second contention was whether the Censor Certificate length of the film constituted 'excisable goods' under the Central Excises and Salt Act, 1944. The Petitioners argued that the Censor Certificate length did not fall within the purview of 'goods' as it had no market value and was not bought or sold independently. The Court referred to the Supreme Court's judgment in Union of India & Anr. v. Delhi Cloth and General Mills Co. Ltd., which established that excise duty is levied on 'goods' that can ordinarily come to the market to be bought and sold.The Court noted that the Censor Certificate length of the film, although processed and printed, did not have independent market value and was not an article of commerce. It was merely affixed to the main feature film for compliance with statutory requirements and did not affect the market value of the main feature film. Consequently, the Censor Certificate length of the film was not 'goods' within the meaning of the Act, and thus, not subject to excise duty.Conclusion:The Court concluded that the directive dated 10th February 1969, was invalid and vitiated the proceedings. Additionally, the Censor Certificate length of the film was not 'excisable goods' under the Central Excises and Salt Act, 1944. As a result, the impugned orders and demand notices were quashed and set aside. The Petitioners were awarded the costs of the Petition.