1971 (4) TMI 40 - HC - Central Excise

Court rules aluminium cans not subject to excise duty under Central Excise and Salt Act.

The court held that the 'aluminium cans or torch bodies' produced by the petitioner are not considered 'goods' under the Central Excise and Salt Act, ... Aluminium cans or torch bodies Issues Involved:1. Levy of excise duty on 'aluminium cans or torch bodies' under Item No. 27(e) of the First Schedule of the Central Excise and Salt Act, 1944.2. Whether 'aluminium cans or torch bodies' are considered 'goods' and thus subject to excise duty.3. Whether the petitioner should have exhausted alternative remedies of appeal and revision before filing the writ petition.Issue-wise Detailed Analysis:1. Levy of Excise Duty on 'Aluminium Cans or Torch Bodies' under Item No. 27(e)The petitioner, a manufacturer of Eveready Flashlights, argued that the 'aluminium cans or torch bodies' produced were not covered by Item No. 27(e) and were not liable to excise duty. The court examined Section 3 of the Central Excise and Salt Act, 1944, which provides for the levy of excise duty on all excisable goods set forth in the First Schedule. Item No. 27(e) includes 'extruded shapes and sections including extruded pipes and tubes.' The court found that the 'aluminium cans or torch bodies' prepared by the petitioner are indeed extruded shapes of aluminium and thus fall under Item No. 27(e).2. Whether 'Aluminium Cans or Torch Bodies' are Considered 'Goods' and Thus Subject to Excise DutyThe petitioner contended that the 'aluminium cans or torch bodies' are intermediate products, not finished goods, and are neither known in the market nor marketable. The court referred to several Supreme Court decisions to determine whether the products qualify as 'goods.' The court noted that excise duty is levied on the manufacture of goods, which must be known to the market and capable of being bought and sold. The court found that the 'aluminium cans or torch bodies' produced by the petitioner are not marketable and have no distinctive use except as intermediate products in the manufacture of flashlights. Therefore, they do not satisfy the description of 'goods' as contemplated by the Act and are not subject to excise duty.3. Whether the Petitioner Should Have Exhausted Alternative Remedies of Appeal and Revision Before Filing the Writ PetitionThe respondents raised a preliminary objection that the writ petition should not be entertained as the petitioner had not exhausted the alternative remedies of appeal and revision provided by the Act. The court acknowledged that normally it does not entertain a writ petition unless the aggrieved person has first availed of the remedies provided by the Act. However, the court decided to entertain the writ petition as it had already been admitted and pending for some time, and the petitioner argued that their product was outside the purview of the Act.ConclusionThe court concluded that the 'aluminium cans or torch bodies' produced by the petitioner are not 'goods' as contemplated by the Central Excise and Salt Act, 1944, and are not subject to excise duty. The writ petition was allowed, and a writ of mandamus was issued to the respondents, restraining them from levying or collecting excise duty on the 'aluminium cans or torch bodies.' Any excise duty already collected on this product would either be refunded to the petitioner or adjusted against the levy of excise duty in respect of other excisable goods produced by the petitioner. The respondents were also ordered to pay the costs of the petition to the petitioner.