Excise duty on captive consumption upheld, while writ challenge to marketability and amended rules was declined.

Excise duty was discussed in relation to molasses used for captive consumption within the factory, with the settled position applied that removal of excisable goods includes such internal use and duty can still arise. The validity of amended excise rules and retrospective validation was treated as already upheld by the Supreme Court, so the writ court declined interference under Article 226. The court also noted that marketability had not been pleaded in the writ petition, and therefore that factual challenge could not be examined in writ proceedings. The challenge to the levy and the request to collection or obtain refund were rejected.

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Issues: Whether excise duty could be levied on molasses used within the factory, and whether the challenge to the amended excise rules and retrospective validation could be entertained under writ jurisdiction.

Analysis: The levy was examined in the light of the settled position that removal of excisable goods includes removal for captive consumption within the factory, and that the validity of the amended rules had already been upheld by the Supreme Court. The Court also noted that the petitioner had not pleaded in the writ petition that molasses was not marketable, so the factual question of marketability could not be investigated in writ proceedings. In any event, the Court treated the matter as covered by the governing Supreme Court decisions and declined to interfere under Article 226 of the Constitution of India.

Conclusion: The challenge to the levy and to the amended rules failed, and the demand for refund or prohibition on collection of excise duty was rejected.

Ratio Decidendi: Where excisable goods are removed for captive consumption within the factory, excise duty is attracted, and a writ court will not entertain a factual challenge to marketability that was not pleaded and is covered by binding precedent.

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