1983 (10) TMI 54 - HC - Central Excise

Determination of eligibility to exemption - Preceding years clearances - Taxing statute - Writ jurisdiction

Summary

Issues Involved:
1. Interpretation of exemption limits under various notifications.
2. Classification of goods as "excisable" or "specified."
3. Eligibility for exemption based on aggregate value of clearances.
4. Maintainability of the writ application despite the availability of alternative remedies.

Issue-wise Detailed Analysis:

1. Interpretation of Exemption Limits under Various Notifications:

The petitioner challenged the orders dated 30-3-1981 and 17-11-1981 on the grounds that they were contrary to the scope of the notifications issued to enlarge the scope of exemption for manufacturers producing more than one "excisable goods" under different items of the First Schedule. The petitioner argued that the aggregate value of its manufacturing starch and gum power being 17.5 lakhs, below the 20 lakh exemption limit, should have qualified for the exemption. The court examined the notifications, particularly Notification No. 71/78-C.E., Notification No. 1471/79-C.E., and Notification No. 80/80-C.E., and concluded that the exemption limit for "excisable goods" was Rs. 20,00,000, whereas for "specified goods," it was Rs. 15,00,000.

2. Classification of Goods as "Excisable" or "Specified":

The petitioner manufactured starch (classified as "specified goods") and gum power (classified as "excisable goods"). The court noted that "excisable goods" are defined under Section 2(d) of the Central Excises and Salt Act, 1944, and include "specified goods." The court found that while starch is a "specified goods," it does not cease to be "excisable." Therefore, the exemption limit of Rs. 20,00,000 should apply to the aggregate value of clearances for both types of goods, as the notification intended to exempt all "excisable goods" up to the higher limit.

3. Eligibility for Exemption Based on Aggregate Value of Clearances:

The court held that the petitioner's total clearance of 17.5 lakhs for starch and gum power combined should be considered under the general exemption limit of Rs. 20,00,000 for "excisable goods." The court rejected the excise authorities' interpretation that the petitioner was only eligible for the Rs. 15,00,000 limit for "specified goods." The court emphasized that the notification's language clearly included "specified goods" within the broader category of "excisable goods," and therefore, the petitioner was entitled to the higher exemption limit.

4. Maintainability of the Writ Application Despite Alternative Remedies:

The respondents contended that the writ application was not maintainable due to the availability of an appeal process. However, the court referred to previous judgments, including Collector of Central Excise, Calcutta & Ors. and Associated Pigment Ltd. v. Collector of Central Excise, Calcutta & Ors., which established that if an alternative remedy does not provide full and effective relief, a writ application is maintainable. The court concluded that the writ application was maintainable as the petitioner had paid excise duty under protest and the alternative remedy would not have provided effective relief.

Conclusion:

The court made the rule absolute and issued a writ of mandamus directing the respondents to rescind, recall, cancel, and withdraw the orders dated 30-3-1981 and 17-11-1981. The court also issued a writ of certiorari quashing the said orders. The respondents were directed to refund the petitioner all excise duties paid under protest, subject to scrutiny and verification. The court allowed the petitioner two months to produce necessary papers for verification, and the respondents were given four months to complete the verification and issue the refund order. No order was made as to costs.