1987 (3) TMI 118 - HC - Central Excise

Summary

Issues Involved
1. Eligibility for exemption under Central Excise Notifications.
2. Interpretation of the terms "specified goods" and "excisable goods."
3. Applicability of alternative remedy.

Detailed Analysis

1. Eligibility for Exemption under Central Excise Notifications
The core issue was whether the Respondents were entitled to the exemption under Notification Nos. 71/78-C.E., 80/80-C.E., and 50/81-C.E. The Respondents claimed that they were eligible for the exemption as their total clearance of excisable goods did not exceed Rs. 20 lakhs in the preceding financial year. They argued that since they manufactured more than one excisable good, they fell under the category of manufacturers eligible for exemptions up to Rs. 20 lakhs, as per clause 2(ii) of Notification No. 80/80-C.E.

The Central Excise Authorities, however, contended that the Respondents were not eligible for the exemption because the value of their clearances of "specified goods" under Tariff Item No. 15C exceeded Rs. 15 lakhs during the preceding financial year. The authorities argued that the Respondents were hit by clause 2(ii) of Notification No. 80/80-C.E., which limited the exemption for specified goods to Rs. 15 lakhs.

2. Interpretation of the Terms "Specified Goods" and "Excisable Goods"
The learned Single Judge interpreted the notifications to mean that "excisable goods" are meant to be exempted up to a limit of Rs. 20 lakhs, irrespective of the number of items. In contrast, for "specified goods," the exemption limit was rigidly set at Rs. 15 lakhs. The Judge concluded that if a manufacturer produces both specified and non-specified excisable goods, the total exemption available would be up to Rs. 20 lakhs. This interpretation was based on the premise that "specified goods" do not cease to be "excisable goods," and thus, should be covered under the broader exemption limit of Rs. 20 lakhs.

The Appellants argued that the learned Judge erred in his interpretation, contending that the exemption should be calculated by taking into consideration the total turnover of specified goods and other excisable goods separately. They maintained that if the total turnover of specified goods exceeded Rs. 15 lakhs, the exemption would not be available, even if the total turnover of all excisable goods was below Rs. 20 lakhs.

3. Applicability of Alternative Remedy
The Appellants did not argue the point of alternative remedy before the appellate court. The learned Single Judge had already determined that the availability of an alternative remedy would not bar the writ petition, especially when the petitioner had established a case on merits. The Judge also noted that unless an alternative remedy could provide full and effective relief, it would not preclude the petitioner from seeking relief under Article 226 of the Constitution.

Conclusion
The appellate court upheld the learned Single Judge's judgment, agreeing that the Respondents were entitled to the exemption as claimed. The court found that the interpretation of the notifications by the learned Judge was correct, ensuring that "specified goods" and "excisable goods" both fall under the broader exemption limit of Rs. 20 lakhs. The appeal was dismissed without any order as to costs, and the court refused the prayer for a stay of operation of the order.