Strict construction of fiscal exemptions led to exclusion of duty-free Maida from turnover computation and invalidation of the demand.

A writ petition was held entertainable despite available statutory appeal and revision remedies, because the alternative-remedy objection did not bar High Court review once the matter had been admitted and heard on merits. On the exemption issue, the proviso to the central excise notification was construed strictly as a fiscal exemption provision, so only duty-paid cleared goods counted toward the turnover threshold. Exempt Maida was therefore excluded from the preceding year's turnover computation, the demand based on its inclusion was unsustainable, and ambiguity in the notification was resolved in favour of the assessee.

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Issues: (i) Whether the writ petition was not maintainable for failure to pursue the statutory appeal and revision remedies under the Central Excises and Salt Act, 1944. (ii) Whether, under the exemption notification issued under Rule 8(1) of the Central Excise Rules, 1944, the phrase "all excisable goods cleared" in the proviso included the value of Maida, which had itself been exempted from duty, for computing the preceding financial year turnover.

Issue (i): Whether the writ petition was not maintainable for failure to pursue the statutory appeal and revision remedies under the Central Excises and Salt Act, 1944.

Analysis: The existence of appeal and revision remedies did not bar the High Court from entertaining the writ petition, especially where the petition had already been admitted and heard on merits. The objection based on alternative remedy was therefore not accepted.

Conclusion: The preliminary objection to maintainability was rejected.

Issue (ii): Whether, under the exemption notification issued under Rule 8(1) of the Central Excise Rules, 1944, the phrase "all excisable goods cleared" in the proviso included the value of Maida, which had itself been exempted from duty, for computing the preceding financial year turnover.

Analysis: The proviso had to be construed strictly as a fiscal exemption provision. On that construction, only goods on which excise duty had actually been paid were to be counted for the turnover threshold. Since Maida was exempted from duty, its value could not be included in computing the limit of thirty lakhs. Ambiguity in the notification was resolved in favour of the assessee.

Conclusion: Maida was excluded from the turnover computation, and the impugned demand order was unsustainable.

Final Conclusion: The writ petition succeeded because the exemption condition was interpreted narrowly in favour of the assessee, resulting in quashing of the demand based on inclusion of exempt Maida in the turnover calculation.

Ratio Decidendi: A fiscal exemption notification must be strictly construed, and where the language is ambiguous, the interpretation favourable to the assessee prevails; for the relevant proviso, only duty-paid cleared goods were to be counted for turnover purposes.

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