' FA KHRuDD1N G. EBRAHIM, J.-The petitioner is a manufacturer of essences and synthetic essential oils which products are supplied by him to manufacturers of perfumery, cosmetics and beverages.
In July, 1963 the petitioner was called upon by the Superintendent, Central Excise, the respondent No, 2 herein, to pay excise duty and sales tax "on the perfumery" before clearance and to obtain a licence for manufacture of excisable goods for the year 1963-64 on the ground that the essences and synthetic essential oils manufactured by the petitioner fell within item 29 of the First Schedule to the Central Excises and Salt Act, 1944, which read as follows : "29. Cosmetics, Toilet Preparations and Perfumery.-Cosmetics, toilet preparations and perfumery, all 20% ad val. Sorts, excluding soap assessable under item 23."
2. The petitioner represented that the aforesaid goods, manufactured by him were not excisable goods inasmuch as they were the raw materials from which were made or manufactured excisable goods but they in themselves were not excisable goods as essences and synthetic essential oils manufactured by him cannot be said to be cosmetics, toilet preparations or perfumery. The Department, however, took up the position that "the concentrates manufactured by the petitioner are capable of being used as perfume and are being disposed of as such".
3. In paragraph 3 of the petition the petitioner specifically alleged that "after manufacturing the Synthetic Essential oil and Essence the petitioner supplies his products to different parties who are manufacturers of perfumery and cosmetic and beverages" and "these manufacturers make use of the products of the petitioner in manufacturing beverages and cosmetics as the case may be." In counter-affidavit filed on behalf of the respondents contents of paragraph 3 of the affidavit is not denied though it was added that "the products of the petitioner are utilized as perfumes".
4. The short question, therefore, that arises for consideration in this case is whether the essences and synthetic essential oils manufactured by the petitioner falls within the aforesaid item 29 of the Third Schedule to the Central Excises and Salt Act, 1944. It may be noted here that the respondents' case, prior to the filing of the petition, was that the goods manufactured by the petitioner were "capable of being used as perfumes". In the counter-affidavit this case is sought to be improved upon by alleging that these products are "utilised as perfumes".
5. Mr. Pesh Imam, the learned counsel for the petitioner invited our attention to a Booklet published by the Government of Pakistan, Central Statistical Office, entitled "Products and Raw Material List".
On page, 9 of this book among the basic raw materials required for the manufacture of non- alcoholic beverages are mentioned essences and essential oils Again, at page 25 of this Book one of the basic raw materials required- for the manufacture of perfumes, cosmetics soaps and other toilet preparation, is shown to be essential oils. Thus it is apparent that a relevant publication of the Government of Pakistan does not regard essences and essential oils as perfumery but as raw materials in the manufacture of perfumes. As aforesaid, it is not even the case of the Department that the goods manufactured by the petitioner, namely, essential oils and essences are either cosmetics, toilet preparation or perfumery but that they were capable of being used as perfumes.
The learned counsel for the petitioner invited our attention to a judgment in Constitutional Petition No, 242 of 1969 in which the question before this Court was whether Prickly Heat Powder is a medical preparation or comes under perfumery, cosmetics and toilet preparations. The Court came to the conclusion that the nature of a product is to be determined by reference to its primary use and, accordingly, the Court had no hesitation in holding that the primary use of the Prickly Heat Powder is as a medical preparation and not as a perfumery, cosmetics and toilet preparation, though the latter use may be subsidiary use of this product and that this subsidiary use will not take away the medical character of the Prickly Heat Powder. I am in respectful agreement. With these observations which equally apply to the present case. The essences and synthetic essential oils are not primarily used or even understood as perfumes and the contention that these products are capable of being used as perfumes or utilized as perfumes will not make them perfumery as such. If the reasoning of the Department is accepted then in an excisable item of "readymade clothing" the Department may as well include cloth since it is capable of being used as a Dhoti or a Sari, or in an excisable item "stationery", paper as it is capable of being used as stationery. What has, therefore, to be looked into is the primary use of the product and since it is not even A the case of the respondents that the primary use of the products manufactured by the petitioner is perfumery it is obvious to me that the petitioner' goods did not fall within item 29 of the First Schedule to Central Excises and Salt Act, 1944 and therefore, not excisable.
6. The result is that this petition succeeds and the petitioner is entitled to a declaration that the demand for excise duty made by the respondents o essences and synthetic essential oils is illegal and without lawful authority and the petitioner was not required to take out licence for the manufacture of the said products. The petitioner will also be entitled to cost of this petition.