1990 (3) TMI 83 - HC - Central Excise

Summary

Issues Involved:
1. Whether partly skimmed milk powder is a separate marketable commodity as compared to skimmed milk powder.
2. Whether both commodities are subject to levy of excise duty u/s 0401.13 of Chapter 4 of the Central Excise Tariff.
3. Jurisdiction of the respondents to levy central excise on partly skimmed milk powder.
4. Refund of the excise duty collected from the petitioner.

Summary:

1. Separate Marketable Commodity:
The court examined whether partly skimmed milk powder is distinct from skimmed milk powder. It was noted that the Central Excise Tariff, ISI standards, PFA Rules, and International Standards all recognize partly skimmed milk powder as a separate commodity. The court concluded that partly skimmed milk powder is commercially known as a separate marketable commodity.

2. Levy of Excise Duty:
The court analyzed the relevant sub-headings of the Central Excise Tariff. Skimmed milk powder is subject to excise duty u/s 0401.13, but there is no specific sub-clause for partly skimmed milk powder. The petitioner argued that partly skimmed milk powder should fall under the residuary sub-heading 0401.19, which is duty-free. The court agreed, stating that partly skimmed milk powder is not covered by sub-heading 0401.13 and should be classified under sub-heading 0401.19.

3. Jurisdiction to Levy Excise:
The court addressed the jurisdiction of the respondents to levy excise duty on partly skimmed milk powder. It was determined that the collection of excise duty on partly skimmed milk powder under sub-heading 0401.13 was without jurisdiction, as it should be classified under the duty-free sub-heading 0401.19.

4. Refund of Excise Duty:
The court ordered the respondents to refund the excise duty collected from the petitioner on partly skimmed milk powder from 1-3-1989. The refund is to be made within six months, failing which the petitioner would be entitled to interest at the rate of 12% per annum.

Conclusion:
The writ petition was allowed, and a writ of prohibition was issued restraining the respondents from collecting excise duty on partly skimmed milk powder. The court held that under the existing Tariff, no excise duty is leviable on the commodity in dispute.