1993 (9) TMI 128 - HC - Central Excise

Summary

Issues:
1. Whether the petitioners are manufacturing pipes from bars and are liable to pay excise duty.
2. Can this question be determined in a writ petition?

Analysis:
The judgment revolves around the dispute between the petitioners and the respondents regarding the manufacturing process of pipes and the liability to pay excise duty. The petitioners claim they manufacture pipes from strips and flats, not bars, and are thus exempt from excise duty. On the other hand, the respondents argue that the petitioners use bars in the manufacturing process and are liable to pay excise duty. The central issue is whether the petitioners are using bars or strips/flats to manufacture pipes and if this determination can be made in a writ petition.

The petitioners, a private Limited Company, set up a unit for manufacturing conduit pipes using Hot Rolled Strips/flats purchased from mills. They claim to use strips/flats below 3 mm thickness and a width of 75-182 mm to produce conduit pipes through a welding process. The dispute arose when the excise department ordered the petitioners to obtain a license and pay excise duty, alleging the use of bars in the manufacturing process.

The respondents argue that the petitioners are not exempt from excise duty as they are using bars below 3 mm thickness, not strips/flats as claimed. The respondents rely on gate-passes showing the purchase of bars by the petitioners. The petitioners counter this by reiterating their manufacturing process using strips/flats and denying the use of bars.

The court delves into the legal framework of excise duty under the Central Excises and Salt Act, 1944, emphasizing the requirement for manufacturers of excisable goods to obtain a license. The court analyzes the relevant exemption notification and the conditions for claiming exemption based on the type of raw materials used in manufacturing.

The court concludes that the determination of whether the petitioners use bars or strips/flats in the manufacturing process cannot be decided in a writ petition. It highlights that such technical questions require expert examination and are beyond the scope of the court's jurisdiction under Article 226 of the Constitution. The court dismisses the petitions, stating that the appropriate authority must resolve the factual dispute, and the petitioners had an alternative remedy through an appeal, which they did not pursue.