1985 (7) TMI 100 - HC - Central Excise

Summary

Issues Involved:
1. Classification of "Barley Malt" and "Malt Extract" as "Food Products" or "Food Preparations" u/s Notification No. 55/75-CE.
2. Entitlement to exemption from excise duty under sub-item 19 of Notification No. 55/75-CE.
3. Maintainability of the writ petition in the context of non-availing statutory remedies.
4. Claim for refund of excise duty paid under protest from March 1, 1978.
5. Validity of Tariff Advice No. 23/79 dated July 9, 1979.

Summary:

1. Classification of "Barley Malt" and "Malt Extract" as "Food Products" or "Food Preparations" u/s Notification No. 55/75-CE:
The petitioners challenged an order by the Assistant Collector, Central Excise, Rohtak, which was based on Tariff Advice No. 23/79, denying them exemptions on "Barley Malt" and "Malt Extract" under Notification No. 55/75-CE. The court determined that "Barley Malt" and "Malt Extract" are indeed "food products" and "food preparations" as per Notification No. 55/75-CE. The court noted that barley is a grain mill product and its processing into malt and malt extract does not change its classification as food.

2. Entitlement to exemption from excise duty under sub-item 19 of Notification No. 55/75-CE:
The court also considered whether "Malt Extract" qualifies as a "drug, medicine, pharmaceuticals and drug intermediates" under sub-item 19 of the Schedule to Notification No. 55/75-CE. It was concluded that malt extract, when used in pharmaceutical products and conforming to pharmacopea specifications, qualifies for exemption under this sub-item.

3. Maintainability of the writ petition in the context of non-availing statutory remedies:
The respondents contended that the petitioners should have availed statutory or departmental remedies before approaching the court. However, the court held that the writ petition was maintainable because the Assistant Collector was bound by the Tariff Advice, and the petitioners had little chance of success in a rehearing before him.

4. Claim for refund of excise duty paid under protest from March 1, 1978:
The court addressed the petitioners' claim for a refund of excise duty paid under protest from March 1, 1978. It rejected the respondents' argument of unjust enrichment, stating that the petitioners had protested the duty payment and approached the court without delay. The court held that the petitioners were entitled to a refund of excise duty paid under protest.

5. Validity of Tariff Advice No. 23/79 dated July 9, 1979:
The court quashed Tariff Advice No. 23/79 and the subsequent assessment proceedings based on it. The Assistant Collector was directed to dispose of the matter in accordance with the law laid down by the court.

Conclusion:
The court quashed the impugned Tariff Advice No. 23/79 and the Assistant Collector's order dated October 7, 1980. The petitioners were entitled to a refund of excise duty paid under protest from March 1, 1978. The petition was accepted, and the rule was made absolute with costs awarded to the petitioners.