Excise exemption for malt and malt extract upheld on manufactured character, with refund allowed despite protest payment.

Alternative departmental remedies did not bar the writ because the impugned tariff advice itself foreclosed relief below. On classification, malt and malt extract were treated by their manufactured character, not end use, and were held to fall within the exemption for food products and food preparations under Notification No. 55/75-CE. They were also accepted as drug intermediates for exemption purposes because the record showed suitability for pharmaceutical use. Duty paid under protest was held refundable, and the plea of unjust enrichment was rejected.

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Issues: (i) Whether the petition was maintainable notwithstanding the availability of departmental remedies; (ii) whether malt and malt extract were entitled to exemption as food products or food preparations under Notification No. 55/75-CE; (iii) whether the products also qualified as drug intermediates under the same notification; and (iv) whether duty paid under protest was refundable or barred by unjust enrichment.

Issue (i): Whether the petition was maintainable notwithstanding the availability of departmental remedies.

Analysis: The existence of an alternative departmental remedy did not bar the writ petition where the impugned tariff advice bound the authority below and effectively foreclosed relief at the departmental stage. The challenge was not limited to the assessment order but extended to the tariff advice itself.

Conclusion: The petition was maintainable.

Issue (ii): Whether malt and malt extract were entitled to exemption as food products or food preparations under Notification No. 55/75-CE.

Analysis: Excise classification turns on the nature of the goods as manufactured and not on their end use. Malt is derived from barley, a grain-mill product, and malt extract is obtained by further processing of malt. On that basis, the products fall within the broad description of food products and food preparations in the exemption notification.

Conclusion: Malt and malt extract were held to fall within Entry 1 of the notification and were exempt.

Issue (iii): Whether the products also qualified as drug intermediates under the same notification.

Analysis: Although malt and malt extract are not drugs, the notification also exempts drug intermediates. The materials on record showed that these products could be used in pharmaceutical preparations and were capable of conforming to relevant standards for such use. The tariff advice treating them otherwise was therefore unsustainable.

Conclusion: Malt and malt extract were also held to qualify as drug intermediates for exemption purposes.

Issue (iv): Whether duty paid under protest was refundable or barred by unjust enrichment.

Analysis: Duty paid under protest was held to be refundable without the ordinary limitation bar. The court declined to deny refund on the ground of unjust enrichment, finding no undue delay or laches and holding that unauthorised duty collected by the State must be refunded.

Conclusion: Refund of duty paid under protest was allowed and the plea of unjust enrichment was rejected.

Final Conclusion: The tariff advice and the consequential assessment action were quashed, the exemption claim succeeded, and the petitioners were held entitled to refund of duty paid under protest.

Ratio Decidendi: For excise purposes, classification depends on the character of the goods as manufactured, not their end use; where duty has been paid under protest on an unlawful levy, refund is not barred merely because the burden may have been passed on.

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