1982 (9) TMI 62 - HC - Central Excise

Summary

Issues: Interpretation of exemption provision for skimmed milk powder under Central Excises and Salt Act, 1944.

In this judgment by the High Court of Gujarat at Ahmedabad, the central issue revolves around the interpretation of an exemption provision for skimmed milk powder under the Central Excises and Salt Act, 1944. The exemption notification exempts skimmed milk powder from excise duty if it is intended for use in regenerating liquid milk. The court examines whether the petitioners, who manufacture ice-cream from skimmed milk powder, are eligible for this exemption when the powder is liquified at an intermediary stage for ice-cream production, rather than for regenerating liquid milk as intended by the notification. The court emphasizes the purpose of the exemption is to augment the supply of liquid milk for societal benefit, highlighting the requirement for regeneration on the premises of the factory or with the Assistant Collector's satisfaction for use in liquid milk regeneration. The judgment clarifies that skimmed milk powder must be reborn as liquid milk for consumption to qualify for the exemption, not if it is ultimately transformed into ice-cream, even if liquified incidentally during the process.

Furthermore, the judgment addresses a grievance regarding the issuance of a Tariff advice and a Circular provided by the learned counsel. The Circular states that quasi-judicial authorities are free to differ with the Tariff advice, indicating that Excise authorities have the flexibility to consider matters independently. The court finds no merit in the contention that Excise authorities will not approach the issue with an open mind. As the court does not uphold the petitioners' interpretation of the exemption provision on merits, the petition is rejected. The judgment also notes that the interim relief granted will be maintained until December 31, 1982, as assured by the Learned Standing Counsel, regardless of the petition's outcome. Ultimately, the petition is dismissed based on the court's interpretation of the exemption provision and the lack of merit in the petitioners' contentions.