1991 (2) TMI 124 - HC - Central Excise

Summary

Issues:
Classification of mixture of gases for manufacturing Hydrochloric acid under Central Excises and Salt Act, 1944 and Central Excise Tariff Act, 1985; Availability of alternative remedy under Section 35-A to the Collector of Central Excise (Appeals); Interference by High Court in impugned orders based on availability of alternative remedy.

Analysis:
The judgment pertains to a case where the petitioner manufactures caustic soda by electrolysis and uses a mixture of gases to produce Hydrochloric acid. The primary issue is the classification of this mixture of gases under the Central Excises and Salt Act, 1944, and the Central Excise Tariff Act, 1985. The petitioner contends that the gases are not excisable goods, relying on a Government order and arguing that the gases do not meet the technical definition of compressed gas. The second respondent, however, argues that the gases fall under sub-heading 2801.10 of the Central Excise Tariff Act, 1985, as chlorine. The disagreement arises on the marketability of the gases and whether they are goods within the meaning of the Acts.

The judgment also addresses the availability of alternative remedy under Section 35-A to the Collector of Central Excise (Appeals). The respondents argue for the dismissal of the writ petitions based on the principle that courts should not interfere with orders when an alternative remedy is available. However, the court exercises discretion considering the pending writ petitions since 1988 and decides to examine the merits of the case before potentially reassigning the petitioners to the remedy of appeal.

Furthermore, the judgment discusses relevant case laws such as Union Carbide India Ltd. v. Union of India, Bhor Industries Ltd. v. Collector of Central Excise, and Collector of Central Excise v. Ambalal Sarabhai Enterprises, emphasizing the importance of marketability in determining excisability. The court ultimately quashes the impugned orders and the show cause notice, ruling in favor of the petitioner. The judgment underscores the need to consider each case's merits and the discretion of the court in deciding on alternative remedies, highlighting the principle of marketability in excise duty determinations.

In conclusion, the High Court quashes the impugned orders and the show cause notice, allowing the writ petitions and making the rule nisi absolute, with no order as to costs. The judgment emphasizes the court's responsibility to ensure justice and considers the specific circumstances of the case in determining the appropriate course of action.