The production of fertilizer is complete upon manufacture and the subsequent packing and stitching are not relevant for determining the liability to excise duty.

P. A. CHOUDARY, J.

( 1 ) THIS is a Writ Appeal filed against the judgment of a learned single Judge allowing W. P. 4815 of 1977 and directing the Assistant Collector, Central Excise, Guntur, to refund to the writ petitioner-company an amount of Rs, 3,59,113-68 which was collected as excise duty from the writ petitioner-company for the period of March 1969. The quantity of fertilizer which is the subject matter of this writ litigation was manufactured by the petitioner-company by that date. But the fertilizer so produced was packed and was not made ready by then for marketing. On that basis the department demanded on that quantity if fertilizer payment of excise duty by taking the position that although the fertilizer was produced prior to the above crucial date, the production could not be considered complete because the fertilizer was not marketable. The department held that only when the fertilizer so produced was loaded into bags and was made marketable, its production should be deemed to be complete. Till then fertilizer should be deemed to have been produced. As the loading of the fertilizer into the bags had taken place subsequent to 1-3-1969, the department had demanded and collected the excise duty. The petitioner-company had paid the demanded amount under protest during the period of March 196 9/07/1969.

( 2 ) IT appears that the excise authorities, according to this view of the matter, had collected excise duty from the fertilizer manufactures of the State of Tamilnadu also. The validity of such imposition of excise duty and collection of the same by the department on the basis of the test of marketability was successfully challenged in the Madras High Court by E. I. D. Parry Limited and Shaw Wallace and Co. Ltd. The Madras High Court, in W. P. Nos. 1746 and 1453 and 1676 of 1973 - 1978 ELT (J18) held that the production was complete the moment the fertilizer was produced without waiting for the date of marketability. In Tamilnadu fertilizer produced prior to 1-3-1969 was, therefore, held not liable to any excise duty. Accordingly, those writs have been allowed by the Madras High Court by its judgment dated 11th of March, 1977. A few days thereafter, on 9-9-1977, the present writ petition has been filed in this court for the grant of similar reliefs. It is represented that the judgment of the Madras High Court in the above batch of writ petitions delivered on 11th of March, 1977, was allowed by the department to become final and it was never challenged in appeal.

( 3 ) WHEN this Writ Petition had come up before the learned single Judge, the only point that has been seriously argued was the point of limitation. The contention of the department that the Writ Petition was barred by limitation was rejected by the learned single Judge and the learned single Judge directed the refund of the above mentioned excise duty collected by the department from the petitioner. It is against the above order of the learned single Judge that this writ appeal has been filed by the Excise Department.

( 4 ) THREE submissions have been made by the learned counsel for the appellant-department, Sri Jagannadha Rao. His contention is that the Writ Petition ought to have been dismissed by holding that the claim for refund had been made after a lapse of unconscionably long number of years. The argument of the appellant is that this is not a case where the Company was unaware of the legal position. It had paid the amount of excise duty under protest, which would show the awareness on the part of the Company that the levy of excise duty is illegal. It is, therefore argued that the petitioner-company, which has allowed about seven years to lapse from the date of the collection of excise duty, should have been non-suited. The second contention of the appellant is that, inasmuch as the Writ Petition was filed in September 1977, the learned Judge ought to have dismissed the Writ Petition applying Article 226 (3) of the Constitution as it stood then den

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