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Issues: (i) whether lead suboxide and lead monoxide manufactured from lead supplied by customers as job work were entitled to exemption under Notification No. 119/75-C.E., dated 30th April, 1975; (ii) whether excise duty collected in breach of the notification could be quashed and refunded in writ jurisdiction despite the statutory refund mechanism and objections based on alternative remedy and delay.
Issue (i): whether lead suboxide and lead monoxide manufactured from lead supplied by customers as job work were entitled to exemption under Notification No. 119/75-C.E., dated 30th April, 1975.
Analysis: The exemption applied to goods falling under Tariff Item No. 68 manufactured in a factory as job work. Manufacture is complete when the original commodity is processed into a commercially different or distinct commodity. The notification did not require that the same or identical article received from the customer must be returned unchanged. A process can remain job work even though it results in a new product, provided the article is processed from material supplied by the customer and charges are confined to the work done. The decision was consistent with earlier authorities on the nature of manufacture and the scope of job work exemption.
Conclusion: The exemption was available, and the levy of excise duty on the processed goods was unlawful.
Issue (ii): whether excise duty collected in breach of the notification could be quashed and refunded in writ jurisdiction despite the statutory refund mechanism and objections based on alternative remedy and delay.
Analysis: Section 11B contemplated refund claims, but duty paid under protest was not barred by limitation. The Court also treated the discretionary writ remedy as appropriate where duty had been illegally recovered in disregard of a valid exemption. The objections based on failure to pursue further statutory remedies and alleged delay were rejected in light of the facts that the petitioner had paid under protest and the authorities had already altered their stance and demanded duty. In such circumstances, relegating the petitioner to a fresh proceeding would be unjust.
Conclusion: The assessment, levy, demands, and appellate orders were liable to be quashed, and refund of the duty paid under protest was directed.
Final Conclusion: The petitioner succeeded on the merits, obtained quashing of the impugned excise demands and appellate orders, and secured refund relief for duty paid under protest together with protection of the exemption during the relevant period.
Ratio Decidendi: A job-work exemption for excise applies where the customer-supplied article is processed into a commercially different or distinct commodity, and duty collected contrary to that exemption may be refunded in writ jurisdiction when paid under protest.
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