Writ jurisdiction and excise exemption: end-use conditions cannot be implied where the notification is silent on ultimate use.

The Bombay High Court noted that the existence of an appellate remedy does not automatically bar writ jurisdiction under Article 226; on the special facts, the objection based on alternative remedy was rejected because further appellate proceedings would prolong litigation unnecessarily. It also held that exemption under the excise notification could not be conditioned on proof of the purchaser's or ultimate user's end-use of citric acid, since excise liability arises on manufacture and an end-use requirement cannot be implied unless the notification expressly says so. The tribunal's direction for end-use verification was therefore quashed.

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Issues: (i) Whether the writ petition under Article 226 of the Constitution of India was maintainable despite the availability of an appeal to the Supreme Court under the excise law. (ii) Whether exemption under the notification depended on proof of the end-use of citric acid by the purchaser or ultimate user.

Issue (i): Whether the writ petition under Article 226 of the Constitution of India was maintainable despite the availability of an appeal to the Supreme Court under the excise law.

Analysis: The existence of an appellate remedy does not by itself bar writ jurisdiction in every case. The dispute had remained pending for several years, and forcing the parties to pursue another round of appellate proceedings would have multiplied litigation and increased expense. In the special facts of the case, the objection based on alternative remedy was not accepted.

Conclusion: The writ petition was maintainable and the preliminary objection was rejected.

Issue (ii): Whether exemption under the notification depended on proof of the end-use of citric acid by the purchaser or ultimate user.

Analysis: Excise duty is attracted on manufacture, and liability ordinarily arises when the manufactured article comes into existence. Unless the exemption notification itself imposes an end-use condition, the benefit cannot be denied by importing such a requirement. Where the product is found to be a drug, drug-intermediate, or pharmaceutical, the exemption is available on that basis, and the department cannot insist on proof that the goods were actually used in the manufacture of drugs or pharmaceuticals. The contrary view in the tribunal order was inconsistent with the applicable interpretation of the exemption notification.

Conclusion: Exemption could not be made contingent on proof of end-use, and the department was not entitled to enquire into or insist upon such end-use.

Final Conclusion: The tribunal's direction requiring end-use verification was quashed, and the petitioners were held entitled to the exemption in respect of manufacture of citric acid.

Ratio Decidendi: A tax exemption notification must be construed on its express terms, and an end-use condition cannot be implied where the levy is on manufacture and the notification does not require proof of ultimate use.

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