1992 (12) TMI 46 - HC - Central Excise

Summary

Issues:
1. Quashing of order and refund of duty paid
2. Challenge to excise duty imposition on molasses
3. Validity of amending Notification and Finance Act

Analysis:
1. The petitioner sought to quash an order and refund duty paid for the period February 1981 to June 1981. Additionally, the petitioner requested to prohibit the collection of excise duty under Item 15CC of the Central Excises and Salt Act, 1944. The challenge included the declaration of the amending Notification No. 20/82 and Section 51 of the Finance Act as ultra vires of the Constitution. The petitioner, a sugar manufacturing company, was affected by the imposition of excise duty on molasses, a by-product, which was previously non-excisable. The Central Government levied excise duty on molasses, leading to the amendment of Rules 9 and 49 of the Central Excise Rules, requiring duty payment at every intermediate stage.

2. The case involved the contention of the petitioner that waste molasses, being non-marketable, should not be subject to excise duty. The petitioner cited precedents to support this argument. However, the court noted that the petitioner did not raise the plea that molasses was not marketable in the writ petition. The court highlighted that the petitioner had requested permission to store molasses, indicating its potential marketability. The court emphasized that the marketability of molasses was a factual question and could not be addressed in writ jurisdiction. Despite arguments that molasses was a waste product, the court referenced a Supreme Court decision to establish that even if a product is considered waste, it may still be excisable.

3. The court referenced previous judgments and the Supreme Court's decision upholding the validity of Rules 9 and 49, along with the retrospective effect of Section 51 of the Finance Act, 1982. The court concluded that the petitioner's case was covered by established legal precedents and declined to interfere in the matter under Article 226 of the Constitution of India. Consequently, the writ petition was dismissed, and the stay order was vacated.