' This judgment will dispose of W.P. No, 1526 of 1972, W.P. No, 1246 of 1975 and W.P. No, 1994 of 1975 as the question involved in all of them is one and the same, i,e, whether or not 'waste', 'dirt', or 'mel' obtained while manufacturing the oil is subject to excise duty?
2. Subsection (1) of section 3 of the Central Excises and Salt Act, 1944 provides that: "There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods, produced or manufactured, and on all excisable services provided or rendered, in Pakistan, as, and at the rates, set forth in the First Schedule."
3. By item No,4 of Section II (relating to the "Vegetable Fats and Oils") of Part I of the First Schedule, the excise duty has been levied on the 'vegetable non-essential oils' as follows:- Item No, Description of goods Rate of duty
4. Vegetable non-essential oils, all sorts, excluding vegetable product covered by item 5. Rs,7 per Cwt.
' In exercise of powers conferred under subsection (1) of section 12-A of the Central Excises and Salt Act, 1944 the Ministry of Finance, Government of Pakistan, vide its Notification No,S.R.O. 136 (I)/70 dated 29-6-1970, exempted various goods specified in a Table given therein, on which the excise duty had been levied under the First Schedule, from so much of the excise duty as was specified in column 4 of the Table aforesaid. Item No,4 (e) of the said Table mentioned the following exemption from the levy of excise duty with respect to item noted below:- "(e) Vegetable non-essential oil waste or 'met' that is to say the residual non-essential oil which is semi-solid and black or brown in colour and .Which cannot be used for any edible purposes either exclusively or in admixture with other oils not exceeding 3 per cent. Of the total quantity of oil produced in a factory during a year and used in the manufacture of any kind of soap or other non- edible products."
' The vegetable non-essential oil `waste' or mel' exceeding 3 per cent. Was, thus, subjected to the levy of excise duty in the same manner as vegetable nonessential oil had been subjected.
4. The contention raised on behalf of the petitioners is that item No,4 of the First Schedule of the Act of 1944 makes provision for the levy of excise duty at the rate of Rs,7 per Cwt. On vegetable non- essential oil, and, therefore, is legitimately subjected to the levy of excise duty. However, oil waste, dirt or met cannot be considered to be included in the category of vegetable nonessential oil, hence no provision exists for levy of excise duty on oil waste, dirt or mel. Under the law, levy of duty is envisaged on the end-product of the oil and not extraneous matters like oil waste, dirt or mel obtained while semirefming the crude oil. The effect of the exemption granted by the Central Government (respondent No,1) in respect of oil waste, dirt or mel from the levy of excise duty up to 3 per cent. Is that excise duty has also become leviable on oil waste, dirt or mel exceeding 3 per cent. Notification No, S.R.O. 136 (I)/70 dated 2-9-6-1970 whereby this has been done is, accordingly, ultra vires of the Act.
5. In reply, the respondent has submitted that the so-called oil waste, dirt or mel is a part of the end-product i,e, vegetable non-essential oil and is included in the item "Vegetable non-essential oils, all sorts" and is, accordingly, assessable to duty under item No,4 of the First Schedule of the Central Excises and Salt Act, 1944. However, vegetable non-essential oil waste or mel, that is to say, the residual non-essential oil, not exceeding 3 per cent. Of the total quantity of the oil produced in a factory during a year, which is semi-solid and black or brown in colour, has been exempted from the whole of excise duty leviable thereon as a concession, vide Notification No, S.R.O. 136 (I)/70 dated 2')-8-1972.
6. After hearing the learned counsel for the parties. I have come to the conclusion that the contention raised on behalf of the petitioners must prevail. Item No,4 of Section II of Part I of the First Schedule makes it clear that excise duty is to be levied on "vegetable non-essential oils", all sorts. It is, therefore, necessary that for an item to be subjected to the charge of excise duty, it must fall under the category of "oils". Waste, dirt or mel of oil cannot fairly be described as part of the end- product viz. Vegetable non-essential oil because it is extraneous to it. It is an accepted principle of interpretation that Statutes imposing burdens are to be strictly construed and doubts, if any, are to be resolved in favour of citizen rather than the State. In the instant case, the waste obtained in the process of manufacturing vegetable oils does not come within the ambit of even "non-essential oils". It cannot therefore be subjected to excise duty. In granting exemption, respondent No,1, vide Notification No, S.R.O. 136 (I)/70 dated 29-6-1970, has made the oil waste, `mel' liable to excise duty in the same manner as duty is leviable on the non-essential oils itself. This is not warranted by law.
Hence the impugned notification is ultra vires of the Act of 1944. It is, therefore, liable to be declared to be without lawful authority and of no legal effect.
7. The result is that the impugned notification is declared to be without I lawful authority and of no effect and the demands raised in pursuance of it are hereby set aside. The writ petitions succeed but in view of the intricate question of law involved, the parties are left to bear their own costs.
Petitions