The process of roasting, powdering, and mixing chicory with coffee powder amounts to a manufacturing process, resulting in a new substance with a distinctive name, character, and use.

B. P. JEEVAN REDDY, J.

( 1 ) BROOKE Bond India Ltd. the petitioner herein, is asking for the issuance of a Writ of Mandamus, restraining the Central Excise authorities from levying and collecting excise duty on `coffee-chicory mixture, which is one of the products marketed and sold by it.

( 2 ) THE petitioner, according to the averments in the writ petition, carries on business of packing and selling tea and coffee, under various brands and trade-marks, all over India and abroad. It sells pure coffee, as well as the blend of coffee and chicory. The petitioner says that he purchases coffee in the form of cured-seed at the auction conducted by the Indian Coffee Board, while chicory is procured directly from agriculturists.

( 3 ) THE Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act"), levies a duty, called "excise duty" on goods procured or manufactured in India. Duty is levied on the basis of values or on the weight or number, as the case may be. The rates of excise duty are those mentioned in the Tariff Schedule appended to the Act. Sixty- eight items are mentioned in the Schedule. Items 1 to 1-F, 2 and 3 are mentioned under the general heading "food and Beverages". Item 2 is "coffee". It would be appropriate to set on all the entries under Item 2:- `coffee- (1) Coffee, cured One hundred rupees per quintal. (2) Coffee commercially Twenty per cent ad valorem plus known as "instant Coffee". the duty of the time being leviable under sub-item (1) of the Item on Coffee, cured, used in the manufacture of such "instant coffee" if not already paid. Explanation I - For the purposes of sub-item (1) "coffee" means the seed of the coffee tree (Coffee), whether with or without husk, whether cured or uncured, but does not include the seed while still attached to the tree. Explanation II - For the purpose of sub-item (2) "instant Coffee" includes instant coffee containing any ingredient in addition to coffee With effect from 1-3-11975, a residuary entry, being Entry 68, was introduced in the Schedule, which Entry reads as follows :-68. All other goods, not elsewhere One percent specified manufactured in a ad valorem. factory but excluding- (a) alcohol, all sorts including alcoholic liquors for human consumption. (b) opium, India hemp and other narcotic drugs and narcotics; and (c) dutiable goods as defined in section 2 (c) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955 ). Explanation.- In this Item, the expression "factory" has the meaning assigned to it is Section 2 (m) of the Factories Act, 1948, (63 of 1948 ). . . . . . . . . . . . . The rate of duty, which was 1% ad valorem initially, has been revised upwards from time to time. I am told that at present it is 8%.

( 4 ) HAVING introduced the residuary item, the Central Government appears to have felt that certain goods ought to be exempted therefrom. Accordingly, it issued Notification No. 55/75, dated 1-3- 1975, under Rule 8 (1) of the Central Excise Rules, 1944, which is to the following effect:- In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods of the description specified in the Schedule annexed hereto and falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 from the whole of the duty of excise leviable thereon. THE SCHEDULE 1. All kinds of food products and food preparations, including :- (i) Meat and meat products; (ii) dairy products; (iii) fruit and vegetable products; (iv) fish and sea products; (v) bakery products; and (vi) grain mill products. 2. Electric light and power. . . . . . . . . . . . . "

( 5 ) FROM 1-3-1975 onwards, the petitioner was paying duty on the coffee-chicory blend,;under Item 68, without any demur. For the first time the petitioner raised an injection to the said levy, in or about January, 1978. The department, however, overruled the objections whereupon the petitioner approached t

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