Excise duty on destroyed warehouse goods and writ maintainability despite onerous pre-deposit conditions were upheld as legal principles.

Excise duty cannot be demanded on tobacco destroyed by fire or rendered unfit for consumption in the warehouse where the goods fall within the remission and destruction provisions, and the remission power must be exercised judicially on proper inquiry rather than arbitrarily. The text also states that a writ petition under Article 226 is not barred merely because a statutory appeal exists when that remedy is conditioned on prior deposit of the demanded amount and is therefore onerous, especially where the demand is said to infringe fundamental rights. On that basis, the impugned excise demand was quashed and relief granted.

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Issues: (i) Whether excise duty could be lawfully demanded on tobacco destroyed by fire or rendered unfit for consumption in the warehouse, having regard to the remission and destruction provisions of the Central Excise Manual; (ii) whether the existence of an alternative appellate remedy barred the writ petition under Article 226 of the Constitution of India.

Issue (i): Whether excise duty could be lawfully demanded on tobacco destroyed by fire or rendered unfit for consumption in the warehouse, having regard to the remission and destruction provisions of the Central Excise Manual.

Analysis: The warehouse goods were found to have been partly destroyed by fire and partly rendered unfit for use and disposed of in the presence of the Central Excise . The demand could not stand where the material showed that the goods fell within the scope of the remission and destruction provisions. The discretion to remit duty on goods lost or destroyed by unavoidable accident had to be exercised judicially and not arbitrarily, and the record did not rebut the petitioners' case that no proper inquiry was made into whether the fire was accidental. The notice for duty was therefore inconsistent with the applicable excise rules.

Conclusion: The duty demand was unlawful and the petitioners were entitled to relief.

Issue (ii): Whether the existence of an alternative appellate remedy barred the writ petition under Article 226 of the Constitution of India.

Analysis: The Court held that the mere availability of an appeal requiring prior deposit of the demanded amount was not an adequate alternative remedy where the impugned demand was said to infringe fundamental rights. The existence of a statutory remedy did not oust writ jurisdiction in such circumstances, and the prior decisions relied upon by the Revenue did not displace the governing principle that an onerous deposit condition could make the remedy inadequate.

Conclusion: The writ petition was maintainable despite the alternative remedy.

Final Conclusion: The impugned excise demand was quashed and the petitioners obtained relief under the writ jurisdiction of the High Court.

Ratio Decidendi: Where excise goods are shown to have been destroyed by accident or lawfully destroyed as unfit for consumption in the presence of the excise , duty cannot be demanded contrary to the remission provisions, and a writ under Article 226 remains available when the statutory alternative remedy is burdened by an onerous pre-deposit condition and the demand itself is alleged to infringe fundamental rights.

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