judgement:
ivil Appeal Nos.
1506 1507 of 1974.
From the Judgment and Order dated 4.8.1972 of the Guja rat High Court in Special Civil Appln.
No. 121 of 1972 and 1187 of 1970.
248 G.A. Shah and M.N. Shroff for the Appellants.
V.V. Vaze, Ms. Gitanjali, P.H. Parekh (N.P.), Vimal Dave (N.P.) and M. Mudgal (N.P.) for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
These appeals by special leave are directed against the judgment of the Gujarat High Court dated 4.8.1972 quashing the declaration under section 6 of the Land Acquisition Act, Act 1 of 1894, on the ground that the same made on 18th of January, 1969, was issued beyond rea sonable time.
The short facts are: The preliminary notification under section 4(1) of the Act was made on 26.7.1963.
On 16/18, 1,J969, the declaration under section 6 was duly notified.
On 17.1.1972 a writ petition was filed in the High Court challenging the declaration.
The High Court took notice of the Land Acquisi tion (Amendment & Validation) Act of 1967 but relying upon a Division Bench judgment of the same High Court in Valji Mulji vs State, held that the period of 5 1/2 years from the date of the preliminary notification was unreasonable delay for making of the declaration under section 6 of the Act.
The validation provision came into force on 20th Janu ary, 1967.
Two judgments of this Court dealing with this aspect being Gujarat State Transport Corporation vs Valji Mulji Soneji & Ors., ; and State of Gujarat & Anr.
vs Punjabai Nathubhai & Ors., have now concluded the position with reference to the provisions of the Validation Act and on the ratio of these judgments the decision of the Gujarat High Court on which reliance was placed by the High Court in disposing of these matters cannot be sustained.
We accordingly allow the appeals, set aside the decision of the High Court and sustain the decla ration under section 6 of the Land Acquisition Act dated 18.1.
There shall be no order as to costs.
G.N. Appeals allowed.

summary:
A preliminary notification under Section 4(1) of the Land Acquisition Act, 1894 was made on 26.7.1963.
The decla ration under Section 6 was duly notified on 16/18.1.1969.
A Writ Petition was filed in the High Court challenging the declaration.
The High Court took notice of the Land Acquisi tion (Amendment & Validation) Act, 1967, but held that the delay of 5 1/2 years from the date of the preliminary noti fication was unreasonable, and quashed the said declaration, relying on its own decision in Valji Mulji vs State, These appeals, by special leave, are against the High Court 's judgment.
Allowing the appeals, HELD: 1.
The validation provision came into force on 20th January, 1967.
The position is now concluded and the reliance placed by the High Court on its decision cannot be sustained.
[248E] Gujarat State Transport Corporation vs Valji Mulji Soneji & Ors., ; and State of Gujarat & Anr.
vs Punjabhai Mathubai & Ors., , followed.
The decision of the High Court is set aside and the declaration under section 6 of the Land Acquisition Act is sus tained.
[248F]


judgement:
ivil Appeal No. 3544 of 1989.
From the Judgment and Order No. 131/89 D dated 9.5.
1989 of the Central Excises & Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/1176/88 D. Rajiv Dutta, Nimish Kothare and K.K. Patel for the Appel lant.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal under section 35L of the Central Excise & Salt Act, 1944 (hereinafter referred to as 'the Act ').
The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., falling under Heading No. 1902.10 of the Central Excise Tariff Act.
The appellant filed classification list effec tive from 1st March, 1987 claiming that their pre budget stocks of non excisable goods, namely, various types of food products declared in the classification list as aforesaid were entitled to duty free clearance being pre budget stocks.
The Assistant Collector of Central Excise, however, held that the question of clearing pre budget stocks duty free did not arise because the products in question were excisable though exempted from the duty.
There was an appeal from the said order of the Assistant Collector before the Collector of Central Excise (Appeals), Bombay.
He dismissed the appeal.
The appellant went up in appeal before the Tribunal.
It was contended before the Tribunal on behalf of the appellant that the goods in question were not leviable to duty under the aforesaid head until 28th February, 1987 and the said goods had been made dutiable only by the 313 Finance Bill, 1987 88 with effect from 1st March, 1987.
It was submitted further that on 27th February, 1987, the appellant had in their factory a stock of the said product which were fully manufactured, packed and ready for sale and the inventory of the said stock was prepared by the Supdt.
of Central Excise on 1st March, 1987.
Reliance was placed on several decisions of the different High Courts, namely, decision of the Madhya Pradesh High Court in Kirloskar Brothers Ltd. vs Union of India, ; Union of India vs Kirloskar Brothers Ltd., , decision of the Bombay High Court in Synthetic Chemicals Pvt.
Ltd. vs
S.C. Coutinho, , decision of the Bombay High Court in New Chemicals Ltd. vs Union of India, decision of the Madras High Court in Sundaram Textiles Ltd. vs Asstt.
Collector of Central Excise, , decision of the Allahabad High Court in Union of India vs Delhi Cloth & General Mills, On the other hand, the revenue contended that the goods forming the pre budget stocks were very much excisable goods and that for the purpose of collecting duty, date of manufacture was not material under the scheme of the Act even though the taxable event is the manufacture.
It was, therefore, contended that at the time of manufacture of the goods in question, the goods were excisable goods and in view of rule 9A of the Central Excise Rules, 1944, though the taxable event is the manufacture and production, the payment of duty is related to and postponed to the date of removal of articles from the manufactury.
The Tribunal accepted the said contention.
We are of the opinion that the Tribunal was right.
It is well settled by the scheme of the Act as clarified by sever al decisions that even though the taxable event is the manufacture or production of an excisable article, the duty can be levied and collected at a later stage for administra tive convenience.
The Scheme of the said Act read with the relevant rules framed under the Act particularly rule 9A of the said rules, reveals that the taxable event is the fact of manufacture or production of an excisable article, the payment of duty is related to the date of removal of such article from the factory.
In that view of the matter, the Tribunal dismissed the appeal and rejected the assessee 's contention.
Appearing before us in support of the appeal, Mr. Rajiv Dutta, learned counsel for the appellant contended that in several decisions it has been held, and referred us to the said decisions referred to hereinbefore, that the relevant date would be the date of manufacture and in this case the manufacture was complete before the introduction of the budget.
It was submitted that until 28th February, 1987, when, 314 according to Shri Dutta, the goods had been manufactured, the goods in question were unconditionally exempt from the duty.
Under the Finance Bill, 1987 88, the said products were made dutiable at the rate of 15% ad valorem on or from 1st March, 1987.
But the appellant had in their factory, a stock of the said products which were duly manufactured, according to Shri Dutta, packed and ready for sale prior to 28th February, 1987.
In those circumstances, the goods in question, according to Shri Dutta, would not be subjected to duty at 15% ad valorem.
Having considered the facts and the circumstances of the case, we are unable to accept this submission.
Excise is a duty on manufacture or production.
But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory.
Rule 9A of the said rules merely does that.
That is the scheme of the Act.
It does not, in our opinion, make removal be the taxable event.
The taxable event is the manufacture.
But the liability to pay the duty is postponed till the time of removal under rule 9A of the said Rules.
In this connection, reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory vs Supdt.
of Central Excise, 13, where it was decided that the words 'as being subject to a duty of ex cise ' appearing in section 2(d) of the Act are only descriptive of the goods and not to the actual levy. 'Excisable goods", it was held, do not become non excisable goods merely by the reason of the exemption given under a notification.
This view was also taken by the Madras High Court in Tamil Nadu (Madras State) Handlook Weavers Cooperative Society Ltd. vs Assistant Collector of Central Excise, [1978] ELT J 57.
On the basis of rule 9A of the said rules, the central excise authorities were within the competence to apply the rate prevailing on the date of removal.
We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article, the duty can be levied and collected at a later date for administrative conven ience.
Having regard to the facts and the circumstances of this case and having regard to the scheme of the excise law, we are of the opinion that the Tribunal was right and there are no grounds to assail the order of the Tribunal.
In the aforesaid view of the matter, the appeal must fail and, accordingly, is dismissed.
there will, however, be no order as to costs.
R.S.S. Appeal dis missed.

dataset_name: IN-Abs

summary:
The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., failing under Heading No. 1902.10 of the Central Excise Tariff Act.
The said goods had been made dutiable only by the Finance Bill 1987 88 with effect from Ist March, 1987.
The appellant claimed that their pre budget stocks of fully manufactured non excisable goods were entitled to duty free clearance.
The Assistant Collector of Central Excise, the Collector of Central Excise (Appeals) and the Tribunal rejected the claim of the appellant.
Before this Court it was contended on behalf of the appellant that the relevant date would be the date of manu facture and in this case the manufacture was complete before the introduction of the budget.
Dismissing the appeal, this Court, HELD: (1) Excise is a duty on manufacture or production.
But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory.
Rule 9A of the Central Excise Rules merely does that.
[314C] (2) The scheme of the Act read with the relevant rules framed under the Act, particularly rule 9A, reveals that the taxable even is the fact of manufacture or production of an excisable article, the 312 payment of duty is related to the date of removal of such article from the factory.
[313F] (3) On the basis of rule 9A of the Central Excise Rules, the Central Excise authorities were within the competence to apply the rate prevailing on the date of removal.
[314E] Karnataka Cement Pipe Factory vs Supdt.
of Central Excise, and Tamil Nadu (Madras State) Handloom Weavers Co operative Society Ltd. vs Assistant Collector of Central Excise, [1978] ELT J. 57, referred to.


judgement:
ivil Appeals Nos. 484 & 485 of 1987.
336 From the Judgment and Order dated 2.12.1986 of the Andhra Pradesh High Court in Election Petition Nos. 3 & 5 of 1985.
P.P. Rao, P. Krishna Rao, V.A. Babu and K.R. Nagaraja for the Appellants.
Shanti Bhushan, G. Narasimhulu and T.V.S.N. Chari for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
These two appeals arise out of the judgments in two Election Petitions in the Andhra Pradesh High Court questioning the election of respondent No. 1 as a Member of Parliament from Srikakulam No. 1 Parliamentary Constituency in the 8th General Election to the House of the People.
The points raised in these appeals are common and so are the relevant facts; and, hence, they are being disposed of by this common judgment.
We propose to take note of only the few facts which are necessary for the appreciation of the controversy before us.
The polling date for the said election along with other parliamentary elections in the State of Andhra Pradesh was December 27, 1984 but in Srikakulam No. 1 Parliamentary Constituency the polling was countermanded and the date of polling was later fixed on January 28, 1985.
In both the Election Petitions the election of respondent No. 1 was questioned mainly on the ground that Shri N.T. Rama Rao, the Chief Minister of Andhra Pradesh as well as the President of the Telugu Desam Party as well as respondent N. 1 gave certain speeches and certain advertisements were got pub lished by Shri N.T. Rama Rao through the Publicity Depart ment of the Government of Andhra Pradesh in the newspapers containing certain statements which are alleged to amount to a corrupt practice within the meaning of the said term in section 123(1)(A) of the Representation of the People Act, 1951 (hereinafter referred to as "the said Act").
The main question canvassed before us is whether the statements contained in these aforesaid advertisements amount to a corrupt practice under section 123(1)(A)(b) of the said Act.
Section 123(1)(A)(b) of the said Act runs as follows: "123.
Corrupt practices The following shall be deemed to be corrupt practices for the purposes of this Act: 337 (1) 'Bribery ', that is to say (A) any gift, offer or promise by a candidate or his agent or by any other person with the consent of a candidate or his election agent of any gratification, to any person whomsoev er, with the object, directly or indirectly of inducing (a) x x (b) an elector to vote or refrain from voting at an election, or as a reward to (i) a person for having so stood or not stood, or for having withdrawn or not having with drawn his candidature; or (ii) an elector for having voted or refrained from voting.
" The advertisements very shortly stated, refer to the auspicious gifts made by the Government of Andhra Pradesh to the poor people on the eve of New Year and Sankranti.
In the said advertisements, it is stated that the said Government which was formed by the Telugu Desam Party was giving to the poor people whose income was below Rs.6,000 per year, a kilo of rice at Rs.2 per Kg.
and the said advertisements referred to a new scheme of selling sarees and dhoties at half prices to the poor people in the State of Andhra Pradesh having Green cards.
Green cards were directed to be issued to all the persons whose annual income was below Rs.6,000.
The supply of the rice at subsidised rates as aforesaid was also to be made to the Green card holders only.
The scheme to sell sarees and dhoties at subsidised rates was to be opera tive from January 26, 1985 to March 31, 1985.
In considering the question whether the said advertise ment and the said speeches amount to a corrupt practice, we are of the view that the provisions of section 123 of the said Act which deal with corrupt practices have to be inter preted, keeping in mind that dictates of commonsense require that they never could have been intended to treat normal election promises made in election manifestoes or usual election speeches by members of various political parties aspiring to power and by different candidates aspiring to get elected to legislative bodies concerned as corrupt practices.
We are of the view that these advertisements and speeches amount to nothing more than statements extolling the achievements of the Government of the State of Andhra 338 Pradesh under the Telugu Desam Party headed By N.T. Rama Rao, the Chief Minister and contain normal election promises and these statements do not amount to corrupt practices falling within the scope of sub clause (b) of clause (A) of sub section (1) of section 123 of the said Act.
It was urged by Mr. Rao, learned counsel for the appel lants that in the impugned judgments, the High Court has incorrectly taken the view that in order to amount to brib ery within the meaning of the said term in section 123(1)(A), the transaction must amount to a bargain by the candidate with a view to get votes.
It was pointed out by him that the said view has been taken in the impugned judg ments, relying upon the decision of a Bench comprising two learned Judges of this Court in Ghasi Ram vs Dal Singh and Others, ; at pp 109 110.
We have gone through to the relevant portion of that judgment (at page 109 and 110 of the said report).
A careful perusal of the said judgment shows that what has been really held in that case is that if the promises given or made amount to a bargain entered into by a candidate for a vote or votes, that would amount to a corrupt practice; but it has not been held there that unless the act alleged amounts to such a bargain, it could not amount to a corrupt practice.
In our view, that judgment does not lay down that in order to amount to a corrupt practice, the transaction must amount to a bargain for getting a vote.
It was pointed out by Mr. Rao, however, that such a view seems to have been taken in two other decisions rendered by two Benches, each comprising two learned Judges of this Court in Bhanu Kumar Shastri vs Mohan Lal Sukhadia and Others, ; at p. 543 and Harjit Singh Mann vs section Umrao Singh and Others, ; at p. 5 10 and these judgments need to be overruled.
We do not propose to go into the correctness or otherwise of this view because, even on the footing that in order to amount to a corrupt practice under the aforesaid provision the alleged acts need not constitute a bargain, the acts established in the present case, in our opinion, do not amount to a corrupt practice.
Our attention was drawn by Mr. Rao to the fact that in this case the said advertisements and the speeches had to be viewed in the context of the fact that the advertisements were issued and the speeches were made after respondent No. 1 filed his nomination papers on January 4, 1985, for the election and before the election was held in the aforesaid constituency.
It was further pointed out that the offer made for the sale of sarees and dhoties at subsidised rates was limited to the period from January 26, 1985 to March 31, 1985.
It 339 cannot be denied that these factors are relevant factors.
We cannot, however, lose sight of the fact that this offer was made not only in this constituency but throughout the State where the elections to the House of the People were sched uled to be held, and were, in fact, held on December 27, 1984.
It was only in case of this constituency that the election to be held on the scheduled date was countermanded and later held on January 28, 1985.
We cannot lose sight of the fact that, as far as the said speeches and the said advertisements, which were issued by the Publicity Depart ment of the State, are concerned, they deal in the main with the achievements of the Government of Andhra Pradesh which, of course, was being run by Ministers belonging to Telugu Desam Party to which respondent No. 1 also belonged.
More over, the offer in the advertisements for the sale of dhoties and sarees at discount rates was in the nature of a benefit offered to poor persons in that State.
When a Gov ernment announces the measures which are intended for the benefit of any of the classes for whose the Government can normally be expected to work like the poor or the economical backward classes, it is only in rare circumstances that such a promise can be said to amount to a corrupt practice within the meaning of section 123(1)(A) even though such a promise might be made on the eve of elections.
Keeping this in mind, in our opinion, although the offer to sell dhoties and sarees at discount rates was of a limited duration as afore stated, it cannot be regarded as a corrupt practice.
Such an offer was bound to have financial repercussions and it is quite possible the duration of the offer was limited to enable the Government to study the financial repercussions rather than from any improper motive.
We find support for this view from the decision of this Court in H.V. Kamath vs Ch.
Nitiraj Singh, that case an Ordi nance was passed by the Government of Madhya Pradesh as a result of which a large number of agriculturists, namely, those holdings of plots of land of less than 7.5 acres area of paying land revenue not exceeding Rs.5 were exempted from the payment of the land revenue.
It was held that such a concession does not amount to a gift, offer or promise of any gratification within the meaning of section 123(1)(A) of the said Act nor does the announcement of the declaration made at a meeting shortly before the election or the issue of a pamphlet containing that declaration at that time carry the matter any further.
It was held that neither Shri D.P. Misra who was the Chief Minister nor Shri S.K. Dixit who acted as his agent were guilty of any corrupt practice within the meaning of the aforesaid provision.
It was next contended by Mr. Rao, although very faintly, that the High Court was in error as it had not decided all other issues which 340 were raised in the election petition.
In this regard we cannot lose sight of the fact that the term of the present Lok Sabha is likely to be over within a few months and fresh elections are likely to be held and it would, therefore, be an exercise in futility to remand the matter to the High Court for deciding the remaining issues.
In the result, the appeals fail and are dismissed.
Looking to the facts and circumstances of the case, there will be no order as to costs.
R.N .J.
Appeals dis missed.

summary:
These two appeals arise out of the judgments in two Election Petitions before the Andhra Pradesh High Court questioning the election of respondent No. 1 as a Member of Parliament from Srikakulam No. 1 Parliamentary constituency in the 8th General Election to the House of the People on the ground that Shri N .T.
Rama Rao the Chief Minister of Andhra Pradesh as well as respondent No. 1 gave certain speeches and certain advertisements were got published by Shri N.T. Rama Rao through the Publicity Department of the Govt.
of Andhra Pradesh in the newspapers containing certain statements which are alleged to amount to a corrupt practice within the meaning of Section 123(1)(A) of the Representa tion of the People Act 1951.
Dismissing the appeals, this Court, HELD: That these advertisements and speeches amount to nothing more than statements extorting the achievements of the Government of the State of Andhra Pradesh under the Telegu Desham party headed by N.T. Rama Rao, Chief Minister and contain normal election promises and these advertise ments donot amount to corrupt practices falling within the scope of sub clause (b) of clause (A) of sub section (1) of Section 123 of the said Act.
[337H; 338A] Ghasi Ram vs Dal Singh & Ors., ; at pp.
109 110; Bhanu Kumar Shastri vs Mohal Lal Sukhadia & Ors., ; at p. 543 and Harjit Singh Mann vs section Umrao Singh & Ors., ; at p. 510, referred to.


judgement:
ivil Appeal No. 2882 of 1989.
From the Judgment and Order dated 2.12.1988 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/1351 of 1988 C. C. Shirappa Adv.
General for State of Karnataka, A.K. Ganguli, K. Swami and Mrs. Sushma Sun, Advs.
with them for the Appellant.
326 Soli J. Sorabji, O.P. Malhotra, Ms. Indu Malhotra, Ms. Auesha Zaidi and Mrs. Nisha Bagchi for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
This appeal, under Section 35 L(b) of the Central Excise and Salt Act, 1944, arises out of and is directed against the Order No. E/1351/88 C dated 2.12.1988, by the Customs, Excise and Gold (Control) Appellate Tribu nal, (Tribunal) New Delhi, allowing the appeal preferred by the Respondent and holding that Respondent was entitled to certain proforma credits of the duty paid on "Sodium Sul phate" used in the manufacture of paper and paper boards in which respondent is engaged.
The short point for consideration in this appeal is whether the Respondent Manufacturer, The Ballarpur Indus tries Ltd., was entitled to the benefit of Central Govern ment 's Notification No. 105/ 82 CE dated 28.2.1982 a ques tion which in turn, depends on whether Sodium Sulphate could be said to have been used as "Raw Material" in the manufac ture of 'paper ' and 'paper board '.
In the proceedings before the authorities, the dispute initially concerned six other inputs.
But the controversy before us was limited, as it should rightly be, only to Sodium Sulphate inasmuch as even in the appeal before the Collector (Appeals), the depart ment 's grievance, apparently, was confined to the Proforma Credits of duty earlier paid on Sodium Sulphate [See Col. 6 of the Assistant Collector 's Memorandum Appeal dated 15.7.1987 before the Collector (Appeals)].
Respondent is a manufacturer of paper and paper boards in the processes relating to which "Sodium Sulphate" is used "in the chemical recovery cycle of Sodium Sulphate which forms an essential constituent of Sulphate cooking liquor used in the digestion operation.
" The notification dated 28.2.1982 under which the credit is claimed reads: "In exercise of the power conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the Noti fication of the Government of India in the Ministry of Finance (Department of Revenue) No. 178/77 Central Excise, Dated 18 June, 1977, the Central Government hereby exempts all excisable goods (hereinafter referred as "the said goods") on which the duty of excise is leviable and in the manufacture of which any goods failing under 327 Item No. 68 of the First Schedule to the (1 of 1944) (hereinafter referred as "the inputs") have been used as raw material or component parts (hereinafter referred to as "the inputs") from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the " 'inputs".
(Emphasis Supplied) The Superintendent of Central Excise, Range 2, Yamunana gar, declined the Proforma Credit to the duty paid on "Sodium Sulphate" on the ground that Sodium Sulphate "was burnt up in the process of manufacture and was not retained in the paper" and that, therefore, it could not be consid ered "Raw Material" in the manufacture of paper.
According ly, he caused a notice dated 18.1.1983 to be issued requit ing respondent to show cause why the amounts of Proforma Credit availed of by the respondent for the period between 28.2.1982 and 31.10.1982 should not be recovered.
The reason why "Sodium Sulphate" could not be held to be a "raw materi al" in the manufacture of paper was set out in the notice thus: " . .
The Proforma Credit claimed and granted in respect of the above mentioned items from 28.2.82 to 31.10.82 is not admissi ble because these Chemicals are burn out and do not remain in the finished product.
The amount of proforma credit availed is, there fore, liable to be recovered . . " (Emphasis supplied) However, the Assistant Collector of Central Excise, Ambala, by his order dated 27.6.1986 took a different view and held that Sodium Sulphate, even as the other inputs referred to in the said notice, was an essential raw materi al in the manufacture of paper and attracted the benefit of the notification.
The show cause notice dated 18.1.1983 was, accordingly, set aside.
But, the Collector of Central Excise (Appeals) set aside the order of the Assistant Collector and remitted the matter to Assistant Collector for a readjudication.
The respondent manufacturer challenged this order before the Tribunal.
The Tribunal upheld the contention of the Respond ent Manufacturer, set aside the order of the Collector (Appeals) and restored the order of the Assistant Collector.
The Tribunal adopted the reasoning in its earlier decision in Seshasayee Paper and Boards Ltd. vs Collector of Central Excise, [1985] 22 in which the Tribunal had held: " . . the term "raw material" has to be interpreted in the circumstances of each case in the absence of any acceptable or useful definition of the term either in the diction ary or in the technical literature . . " " . . sodium sulphide lye, Sodium Sul phate, Daicol (Gaur Gums) and Fluo solid lime used for the bleaching of pulp should be considered as raw materials in the manufacture of paper; they serve a distinct and definitive purpose in the normal and recognised process of manufacture of paper and are essential for the process of manufacture . . " In this appeal, the Collector challenges the correctness of the decision of the Tribunal.
We have heard Sri A.K. Ganguly, learned Senior Coun sel for the Appellant and Sri Soli Sorabjee, learned Senior Counsel for the Respondent Manufacturer.
The thrust of Sri Ganguly 's arguments is that the amplitude of the expression "Raw material" in the Notification has to be ascertained with reference to and in the context of the purpose in substituting that expression in place of the words obtaining in the earlier Notification No. 79/CE dated 4.6.1979, in which credit was given to duty paid on "goods" which have been "used" in the manufacture of excisable goods.
Sri Ganguly says that the Tribunal has, virtually and in effect, ignored the essential and important distinction between goods being "used" in the manufacture on the one hand and "goods" used as "Raw Material" on the other, ignoring the conscious change intended by the substitution of the expres sion "Raw Material" in the later notification dated 28.2.1982 which was clearly intended to cut down the bene fit.
Sri Ganguly referred to the following observations of this Court in Collector of Central Excise vs Eastend Paper Industries Ltd., SC: In J.K. Cotton Spinning and Weaving Mills Co. Ltd. vs Sales Tax Officer, [1965] 16 STC 563 SC, this Court while construing the expression 'in the manufacture or processing of goods for sale ' in the context of Sales Tax Law, though the concept is different under the Excise Law, has held that manufacture of goods should normally encompass the entire 329 process carried on by the dealer of convert ing raw materials into finished goods . . " (P. 204) (Emphasis Supplied) and contended that the import of the word "Raw Material", judicially accepted, connotes something more than what is 'used ' in the manufacture and requires that goods to become "Raw Material" must, either in their original or altered form, endure as a composite element of the end product.
Ganguly submitted that the technical literature and evidence in the case as to the part played by Sodium Sulphate in the chemical technology of paper making suggested two things: First, that Sodium Sulphate was utilised in the preparation of an anterior, intermediate product at the stage of 'diges tion ' of the pulp and did not, therefore, strictly belong to the process of manufacture of paper itself; and, Secondly, that Sodium Sulphate did not go directly into and find a place in the finished product and did not, therefore, quali fy for being "Raw Material" in the manufacture of paper.
Learned Counsel said that no satisfactory answer to the question raised in the appeal could be afforded unless a clear line of demarcation between the material merely used in the manufacture of paper on the one hand and material used as "Raw Material" on the other is drawn.
Sri Ganguly sought to substantiate this distinction in the present case with reference to certain observations of this Court in Deputy Commissioner of Sales Tax, Board of Revenue vs Thomas Stephen & Co., Ltd., JT One of the ques tions there was whether cashew shells used in the kiln by the dealer who was a manufacturer of tiles, terra cotta ware and ceramic items were exigible to purchase tax under Sec tion 5A (1)(a) of the Kerala General Sales Tax Act, 1963, on the ground that the dealer had "consumed such goods in the "The Tribunal had held that manufacture of other goods . ." cashew shells had been used only as fuel in the kiln for the manufacture of tiles and that, therefore, the condition of 5A (1)(a) of the Act was not satisfied, there having been no consumption of cashew shells in the manufacture of the ceramic goods.
This Court held: "The cashew shells in the instant case, had been used as fuel in the kiln.
The cashew shells did not get transformed into the end product.
These have not been used as raw materials in the manufacture of the goods.
These have been used only as an aid in the manufacture of the goods by 330 the assessee.
Consumption must be in the manufacture as raw material or of other compo nents which go into the making of the end product to come within the mischief of the section.
Cashew shells do not tend to the making of the end product.
Goods used for ancillary purposes like fuel in the process of the manufacture, do not fail within section 5A(1)(a) of the Act.
Cashew shells, therefore, do not attract levy of tax under the said section . . " (p. 634) (Emphasis Supplied) Sri Ganguly says that "Sodium Sulphate" in the present case must, like the cashew shells, be held to have been used as an aid in the manufacture of paper and for ancillary purposes like fuel and not as "Raw Material in the manufac ture of paper.
Sri Sorabjee, for the Respondent, sought to maintain that Sodium Sulphate was an essential chemical ingredient in the chemistry of paper technology and that the fact that the ingredient was actually burnt up or sublimated in the proc ess and did not retain its identity in the end product, will not, necessarily, detract from its being a "Raw Material".
The relevant test is how essential is the ingredient in the manufacture.
Learned counsel said that in the complexity of the chain of chemical reactions in the manufacturing proc ess, undue emphasis on the search for the identity of any individual chemical ingredient 'in the final product would be artificial and unrealistic.
Sri Sorabjee submitted that authoritative scientific treatises on the paper technology recognise that "Sodium Sulphate" is an essential raw materi al.
Sri Sorabjee referred to the publication of the Food and Agriculture Organisation of the United Nations under the caption "Guide for Planning Pulp and Paper Enterprises" in which the following statement occurs: "For any pulp and paper enterprise a variety of non fibrous raw materials are required: water, fuel, power and paper making chemicals and, for pulp mills, pulping and bleaching chemicals . . " (p. 270) "The sulphate (kraft) pulping proc ess, now the most common pulping process for both wood and nonwood fibrous raw materials, requires the purchase of salteake (sodium sulphate) and limestone (calcium carbonate).
De 331 pending on the efficiency of the recovery system, about 40 to 80 kilogrammes of salteake and 25 kilogrammes of limestone are needed per ton of pulp.
These chemicals are converted in the chemical recovery and causticizing systems to give sodium hydroxide and sodium sulphide, which are the active chemicals in the pulping liquor." (p. 275) Sri Sorabjee submitted that the Tribunal had consistent ly taken this view in several cases and that the department not having carried those matters up in appeal must be held to have accepted the correctness of that view.
As instances in point, Learned Counsel referred to two decisions, in Collector of Central Excise, Nagpur vs Ballarpur Industries Ltd., Chandrapur, and in Collector of Cen tral Excise, Bhubaneswar vs Titaghur Paper Mills, Adverting to appellant 's contention that use of Sodium Sulphate was at a stage of preparation of the Pulp which is a stage anterior to the actual manufacture of paper, Sri Sorabjee submitted that, apart from the fallacy inherent in the attempt to dissect an otherwise integrated process of manufacture, the definition of 'manufacture ' in Section 2(f) of the 'Act ' which takes with in it all ancillary and inci dental processes, should secure to render the contention insubstantial.
The question, in the ultimate analysis, is whether the input of Sodium Sulphate in the manufacture of paper would cease to be a "Raw Material" by reason alone of the fact that in the course of the chemical reactions this ingredient is consumed and burnt up.
The expression "Raw Material" is not a defined term.
The meaning to be given to it is the ordinary and well accepted connotation in the common parlance of those who deal with the matter.
The ingredients used in the chemical technology of manufacture of any end product might comprise, amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end product; those which as a result of interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end product; those which, like cata lytic agents, while influencing and accelerating the chemi cal reactions, however, may themselves remain uninfluenced and unaltered and remain independent of and outside the end products and those, as here, which might be burnt up or consumed in the chemical reactions.
The ques 332 tion in the present case is whether the ingredients of the last mentioned class qualify themselves as and are eligible to be called "Raw Material" for the end product.
One of the valid tests, in our opinion, could be that the ingredient should be so essential for the chemical processes culminat ing in the emergence of the desired end product, that having regard to its importance in and indispensability for the process, it could be said that its very consumption on burning up is its quality and value as raw material.
In such a case, the relevant test is not its absence in the end product, but the dependance of the endproduct for its essen tial presence at the delivery and of the process.
The ingre dient goes into the making of the end product in the sense that without its absence the presence of the end product, as such, is rendered impossible.
This quality should coalesce with the requirement that its utilisation is in the manufac turing process as distinct from the manufacturing apparatus.
The decision of this Court in Deputy Commissioner of Sales Tax, Board of Revenue vs Thomas Stephen & Co. Ltd., relied upon by Sri Ganguly, does not really advance the appellant 's case.
The observations therein to the effect that "consumption must be in the manufacture of raw material or of other component which go into the making of end product" were made to emphasise the distinction between the "fuel" used for the kiln to impart the heat treatment to ceramics and what actually went into the manufacture of such ceramics.
The observations, correctly apprehended, do not lend themselves to the understanding that for something to qualify itself as "Raw Material" it must necessarily and in all cases go into, and be found, in the end product.
We also find no substance in the contention of Sri Ganguly that the process in which the Sodium Sulphate was used, was anterior to and at one stage removed from the actual manufacture of paper.
Sri Sorabjee 's answer to this contention is, in our view, appropriate.
That apart the following observations in Collector of Central Excise vs Eastend Paper Industries Ltd., cited by Sri Ganguly himself is a complete answer: " . .
Where any particular process, this Court further emphasised, is so integrally connected with the ultimate production of goods that, but for that process, manufacture or processing of goods would be commercially inexpedient, articles required in that proc ess, would fall within the expression 'in the manufacture of goods ' . . " 333 8.
On a consideration of the matter, we are persuaded to the view that the Tribunal was right in its conclusion that Sodium Sulphate was used in the manufacture of paper as "Raw Material ' within the meaning of the Notification No. 105/82 CE dated 28.2.1982.
Now a word about Sri Ganguly 's insistence on drawing a line of strict demarcation between what can be said to be 'goods ' merely "used" in the manufacture and what constitute goods used as "Raw Material" for the purpose.
We are afraid, in the infinite variety of ways in which these problems present themselves it is neither necessary nor wise to enunciate principles of any general validity intended to cover all cases.
The matter must rest upon the facts of each case.
Though in many cases it might be diffi cult to draw a line of demarcation, it is easy to discern on which side of the border line a particular case fails.
Sri Ganguly 's insistence, however, serves to recall the pertinent observations of an eminent author on the point.
It was said: " . .
A common form of argument used by counsel in legal cases is to suggest that if the court decides in favour of the opposing counsel 's arguments, it will become necessary to draw lines which may be very difficult or impossible to draw.
"Where will you draw the line"? 1s, of course, a question which must be faced by a legislator who is actually propos ing to lay down lines for all future cases, but it is not a question which needs in gener al to be faced by common law courts who pro ceed in slow stages, moving from case to case . . ' ' [See: "Pragmatism and Theory in English Law:; page 75; Hamlyn Lectures of 1987] The learned author recalls Lord Lindley 's "robust answer" to the question: Where will you draw the line? "Nothing is more common in life than to be unable to draw the line between two things.
Who can draw the line between plants and animals? And yet who has any difficulty in saying that an oak tree is a plant and not an animal?" [See: Att.
Gen vs Brighton & Hove Co operative Assoc., at p. 282] 334 Again, Lord Coleridge in Mayor of Southport vs Morris, at 361 said: "The Attorney General has asked where we are to draw the line.
The answer is that it is not necessary to draw it at any precise point.
It is enough for us to say that the present case is on the right side of any line that could reasonably be drawn.
In the result for the foregoing reasons, we find no merit in this appeal which is, accordingly, dismissed.
G.N. Appeal dis missed.

summary:
Respondent has been using Sodium Sulphate in the process of manufacture of paper and paper boards, and by virtue of Notification No. 105/82 CE dated 28.2.1982 claimed pro forma credits.
The Superintendent of Central Excise de clined the claim on the ground that Sodium Sulphate was burnt up in the process of manufacture and was not retained in the paper, and therefore, could not be considered .as raw material in the manufacture of paper.
He also issued a show cause notice for the recovery of proforma credits already availed of by the respondent.
On appeal, however, the Assistant Collector set aside the show cause notice holding that Sodium Sulphate was an essential raw material in the manufacture of paper and as such attracted the benefit of the notification.
But, the Collector of Central Excise (Appeals) set aside the order of the Assistant Collector and remitted it back to him for readjudication.
Respondent challenged this order before the Customs, Excise and Gold (Control) Appellate Tribunal.
Adopting the reasoning in its earlier decision in Seshasayee Paper and Boards Ltd. vs Collector of Central Excise, , the Tribunal allowed the appeal and restored the order of the Assistant Collector.
This appeal under Section 35 L(b) of the is against the Tribunal 's order.
On behalf of the Appellant, it was contended that the word "raw material" connotes something more than what is 'used ' in the manufacture and requires that goods to become "raw material" must either in their original or altered form, endure as a composite element of the end product.
324 The Respondent contended that Sodium Sulphate was an essential chemical ingredient in the chemistry of paper technology and the fact that the ingredient was actually burnt up or sublimated in the process; and did not retain its identity in the end product, will not detract from its being a raw material.
Dismissing the appeal, HELD: 1.1.
The Tribunal was right in its conclusion that Sodium Sulphate was used in the manufacture of paper as "Raw Material" within the meaning of the Notification No. 105/82/CE dated 28.2.1982.
[333A] 1.2.
The expression "Raw Material" is not a defined term.
The meaning to be given to it is the ordinary and well accepted connotation in the common parlance of those who deal with the matter.
The ingredients used in the chemi cal technology of manufacture of any end product might com prise, amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end product; those which, as a result of interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end product; those which, like catalytic agents, while influencing and accelerating the chemical reaction, however, may themselves remain uninfluenced and unaltered and remain independent of and outside the end products and those, as here, which might be burnt up or consumed in the chemical reactions.
It could be that the ingredient should be so essential for the chemi cal processes culminating in the emergence of the desired end product, that having regard to its importance in the indispensability for the process, it could be said that its very consumption on burning up is its quality and value as raw material.
In such a case, the relevant test is not its absence in the end product, but the dependence of the end product for its essential presence at the delivery end of the process.
The ingredient goes into the making of the end product in the sense that without its absence, the presence of the end product, as such, is rendered impossi ble.
This quality should coalesce with the requirement that its utilisation is in the manufacturing process as distinct from the manufacturing apparatus.
[331F H; 332A C] Deputy Commissioner of Sales Tax, Board of Revenue vs Thomas Stephen & Co. Ltd., JT , distinguished.
Seshasayee Paper and Boards Ltd. vs Collector of Central Excise, 325 ; Collector of Central Excise vs Eastend Paper Industries Ltd., SC; Collector of Central Excise, Nagpur vs Ballarpur Industries Ltd., Chan drapur, and Collector of Central Excise, Bhubaneshwar vs Titaghur Paper Mills, , referred to. 2.
It cannot be gain said that Sodium Sulphate used was anterior to and at one stage removed from the actual manu facture of paper.
Section 2(1 ') of the Act defines 'manufac ture ' and it takes within it all ancillary and incidental purposes.
Where any particular process, is so integrally connected with the ultimate production of goods that, but for that process, manufacture or processing of goods would be commercially inexpedient, articles required in that process, would fail within the expression 'in the manufac ture of goods '.
[332F G, 331D] Collector of Central Excise vs Eastend Paper Industries Ltd., SC, followed.
is not always possible to draw a line of strict demarcation between what can be said to be 'goods ' merely used in the manufacture and what constitute goods used as "Raw Material" for that purpose.
In the infinite variety of ways in which these problems present themselves it is nei ther necessary nor wise to enunciate principles of any general validity intended to cover all cases.
The matter must rest upon the facts of each case Though in many cases it might be difficult to draw a line of demarcation, it is easy to discern on which side of the boarder line a particu lar case falls.
[333B C] Pragmatism and Theory in English Law, page 75, Hamlyn Lectures of 1987; Attorney General vs Brighton & Hove Co operative Association, ; Mayor of South Port vs Morris, , relied on.


judgement:
ivil Appeal No. 2472 of 1989.
From the Judgment and Order dated 23.4.1987 of the Orissa High Court in M.A. No. 332 of 1984.
A.K. Panda for the Appellant.
R.K. Sahoo for the Respondent.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave by the State of Orissa is directed against the judgment of the Orissa High Court rejecting its appeal under section 39 of the Arbitration Act.
The respondent executed certain work under a written agreement with the appellant and a dispute arose thereunder which was referred to arbitration.
The Arbitration made an award which was filed in Court.
On service of notice the appellant raised several objections which the trial court overruled.
The award was made a rule of the court.
After unsuccessfully moving the 368 High Court in appeal, the appellant has approached this Court.
Except for the objection taken by the appellant on the question of the power of the Arbitrator to grant interest, we do not find any merit in the other points decided by the impugned judgment.
The decision of the High Court is there fore affirmed on all the other points.
So far the question relating to interest is con cerned, it has been contended by the learned counsel for the appellant that the arbitrator exceeded his jurisdiction in allowing the respondent 's claim in view of the decision in Executive Engineer (irrigation), Balimela and others vs Abhaduta Jena and Others, [1988] 1 SCC 418.
It was pointed out therein that this Court had in Seth Thawardas Pherumal vs The Union of India, , held that in case of direct reference to arbitration without the intervention of a court, provisions of neither the Interest Act, 1839 nor the Civil Procedure Code applied to an arbitrator as he was not a court, and interest could, therefore, be awarded only if there was an agreement to pay interest or a usage of trade having the force of law or some other provision of the substantive law which entitled the plaintiff to receive interest.
On the coming in force of the , although the position in regard to the arbitrator 's power to award pendente lite interest continued to be the same, he was vested with the jurisdiction to allow interest pior to the proceeding in view of the definition of "court" in the Act which includes the arbitrator.
Accordingly, it was held that in cases in which the reference to arbitration was made after the commencement of the new Act, that is, August 19, 1981, the arbitrator may award prior interest, but in those cases also he cannot grant pendente lite interest.
Since the reference in the case before us was made in March 1982, no objection can be taken to that part of the award whereby the respondent has been allowed the claim of interest for the earlier period.
The learned counsel for the appellant argued that the arbitrator allowed the past interest twice over.
The award is a nonspeaking one and in paragraph 1 it says that the appellant shall pay the claimant Rs. 1,29,000 in full satis faction of the claims.
In paragraph 2 of the award it is held that the claimant is entitled to interest at the rate of 12 per cent per annum on the above principal sum of Rs. 1,29,000 from 1.10.1978 till the payment of the decree.
According to the learned counsel for the appellant the sum of Rs. 1,29,000 included the claim of interest also.
In view of the clear language of paragraph 2 of the award, we reject the argument.
369 5.
The appellant, however, is entitled to relief with respect to the pendente lite interest included in the award.
The question is as to when this period commences.
According to the appellant the period began on the 20th April, 1982 when the arbitrator must be deemed to have entered on refer ence.
The respondent contends that this period must be held not to have commenced earlier than the 9th of July, 1982 when the parties filed their claim and counter claim.
The argument is that until the arbitrator applies his mind, he cannot be assumed to have entered on arbitration.
Reliance has been placed on Gujarat Water Supply and Sewerage Board vs Unique Erectors (Gujarat) (P) Ltd. and another; , 6.
Before proceeding further it will be helpful to examine the language of section 3 of the which states that in cases where the conditions mentioned in clauses (a) and (b) of sub section (1) are satisfied the Court may allow interest for the past period terminating on "the date of institution of the proceedings".
By reason of.the inclusive definition of "court" in section 2(a) the Act is applicable to arbitration.
The question, therefore, is as to when the proceeding before an arbitrator is deemed to com mence.
It has not been suggested before us that the neces sary conditions for the application of section 3 .are not satis fied in the present case and so the respondent is not enti tled to the benefit under 1978 Act; and we, therefore, proceed on the assumption that the provisions of the Act govern the case.
The arbitrator in the present case was appointed on 16.3.
He after being informed about his appointment, directed the parties to submit their statements of claim by the 20th April, 1982.
The actual date when this order was made is not known.
The contractor respondent filed his statement on 5.5. 1982 and the appellant on 9.7.1982.
Rely ing on the observation in lossifoglu vs Coumantaros, , and those of Raghubar Dayal, J. in Hari Shankar Lal vs Shambhunath Prasad and others; , at page 732, Mr. Panda, learned counsel for the appellant, contended that the arbitrator cannot be said to have entered on the reference earlier than April 20, 1982.
According to the learned counsel for the respondent it could not be before 9.7. 1982 when the arbitrator applied his mind to the cases of the parties.
Reference was made to the decisions of several High Courts.
In our view none of these cases is helpful to resolve the present controversy.
They all deal with the point as to when an arbitrator is said to enter on reference.
They were not concerned with the question as to when a proceeding before an arbitrator is deemed to com mence.
370 8.
So far an action in a court of law is concerned, it must be held that it commences on the filing of a proper claim in accordance with the prescribed procedure before the authority empowered to receive the same.
If a plaint, drawn up in accordance with the prescribed law, is filed before a civil court, the suit must be deemed to have been instituted on the date, and not on a later date when the court takes up the plaint and applies its mind.
Ordinarily the plaint is examined by the stamp reporter of the court who scrutinises whether proper court fee has been paid or not, and then makes a report.
The court generally takes up the plaint only later.
Similar is the position with respect to other appli cations and memoranda of appeals.
It must, therefore, be held that the proceeding is instituted when the claimant files his claim.
We do not see any reason to apply a differ ent approach in the case of an arbitration proceeding.
As soon as the arbitrator indicates his willingness to act as such, the proceeding must be held to have commenced.
This aspect did not arise for decision in the cases Executive Engineer (Irrigation) vs Abhaduta Jena, [1988] 1 SCC 418 or Gujarat Water Supply and Sewerage Board vs Unique Erectors (Gujarat) (P) Ltd., ; and no assistance from them can be taken in the present appeal.
The learned counsel for the appellant is, therefore, right in saying that the arbitrator in the present case, by directing on 20.4.
1982 the parties to file 'their statements of claim, clearly indicated that he accepted the offer to arbitrate.
The proceeding must, therefore, be deemed to have instituted not later than this date.
We accordingly hold that the award so far it allowed interest for the period after 20.4.
1982 is without jurisdiction and must be excluded.
The appeal is accordingly allowed in part.
The parties shall bear their own costs.
Y. Lal Appeal partly allowed.

summary:
The Respondent executed certain works under a written agreement with the appellant and a dispute arose thereunder which was referred to arbitration.
The arbitrator made an award which was filed in Court.
The appellant raised several objections which were all overruled by the Trial Court, and the award was made a rule of the Court.
The appellant there upon appealed to the High Court under section 39 of the Arbitration Act which was rejected.
Hence this appeal by the appellant.
The Court did not find any substance in the objections raised by the appellant except the one taken by him regard ing the power of the arbitrator to grant interest.
Therefore the question that arose for determination by the Court was whether the arbitrator was competent to award interest and if so in respect of which period, and further in the circum stances of the case, from which date the proceedings before the Arbitrator should be deemed to have commenced.
Partly allowing the appeal on that question, this Court, HELD: Since the reference in this case was made in March 198L no objection can be taken to that part of the award whereby the respondent has been allowed the claim of inter est for the earlier period.
[368F] See: Executive Engineer (Irrigation) Balimela and Ors.
vs Abliaduta Jena and Others, [1988] 1 SCC 418 and Seth Thawardas Pherumal vs The Union of India, The arbitrator in the present case was appointed on i6.3.1982.
He after being informed about his appointment, directed the parties to submit their statements of claim by the 20th April, 1982.
The actual 367 date when this order was made is not known.
[369E] So for as an action in a Court of law is concerned, it must be held that it commences on the filing of a proper claim in accordance with the prescribed procedure before the authority empowered to receive the same.
No reason is seen to apply a different approach in the case of arbitration proceedings.
As soon as the arbitrator indicates his will ingness to act as such, the proceeding must be held to commence.
[370A C] The arbitrator in the present case, by directing on 20.4.82 the parties to file their statements of claim, clearly indicated that he accepted the ' offer to arbitrate.
The proceeding must, therefore, be deemed to have been instituted not later than this date.
[370D] The award so far as it allowed interest for the period after 20.4.82 is without jurisdiction and must be excluded.
The appeal is accordingly allowed in part.
[370E] Gujarat Water Supply and Sewerage Board vs Unique Erec tors (Gujarat) (P) Ltd. & Anr.
, ; ; lossi foglu vs Coumantaros, and Hari Shankar Lal vs Shambhunath Prasad & Ors., ; , referred to.