Kali Aerated Water Works vs Union of India (UOI)

In all these writ appeals, the questions arise for consideration are one and the same and hence, by consent of all the counsels, the writ appeals

are taken up for joint final disposal.

The appellants herein filed the writ petitions challenging the validity of Clause (4) of the Notification No. 59 of 1994 Central Excise dated 1-3-

1994. The learned Single Judge upheld the validity of the said Clause. Both the learned Counsels agreed that the validity of the said Clause has

also been upheld by the Apex Court. Hence, there is no need to traverse the validity of the said Clause.

The question for consideration is as to whether the appellants are entitled for the exemption of excise duty as per the said Clause of the

exemption Notification. Before any adjudication proceedings were initiated, the appellants approached this Court questioning the validity of the

Clause (4) of the said Notification. Incidentally, they also claimed that they are entitled for the benefit of exemption. While the learned Single Judge

upholding the validity of the said Clause, had also gone into the question of entitlement of the appellants for the exemption. In our view, to consider

the claim of the appellants regarding the exemption from excise duty, it is necessary to have some evidence on material factors. The said Clause

had been interpreted and the claim of the appellants had been negatived on the short ground that they are using the brand name of others for their

commodities and as such, the appellants are not entitled for the exemption.

Before us, it is claimed that the each appellant is separate entity and having separate manufacturing units; some are manufacturing identical goods

and others are manufacturing different specified goods.

It is the contention of the learned Counsel for the appellants that the Clause (4) of the said Notification can be made applicable only if the users

of the same brand name manufacture the identical goods and not otherwise. We are of the opinion that this is a matter to be decided only by the

adjudicating authority. As stated already, since the adjudicating authority had not decided this issue, it is for him to take up the issue after giving an

opportunity to the appellants herein. On this short ground, we are of the opinion that the matter has to go back to the adjudicating authority the

Assistant Collector of Customs to determine the classification of the goods manufactured by the appellants as well as their claim regarding the

exemption of excise duty.

Though the learned Single Judge had decided the issue on merits, and had given a finding, since the adjudicating authority had not applied his

mind, and decided the question, and also we having found that the matter has to go back to the adjudicating authority for proper consideration as

to the disputed question of facts, it is necessary that the findings of the learned Single Judge on this aspect alone have to be set aside.

Accordingly, the findings of the learned Single Judge in this regard on merits of the claim of the appellants are vacated. The appeals are ordered

accordingly and the matter is remitted back to the Assistant Collector of Customs for the purpose of proceeding with the adjudication process

afresh. No costs. Consequently, the above C.M.Ps. are dismissed as unnecessary.