D C W LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner in all the cases is the same. THE petitioner-company manufactures caustic soda by electrolysis of sodium chloride brine by BASF type high amperage mercury cells. During this process in the primary cell a mixture of gases consisting of Hydrogen, oxygen, nitrogen water vapour and a substantial percentage of chlorine content are produced. This mixture of gases is fed through pipe line and diverted into two branches. One branch goes to the liquid chlorine plant, with which we are not concerned. THE other branch is taken to a furnace where it is burnt with Hydrogen resulting in Hydro chloric acid fumes which are absorbed in water to make commercial grade Hydro chloric acid. THE bone of contention between the parties is whether the mixture of gases liberated in the primary and taken through pipe lines for manufacture of Hydrochloric acid, otherwise called wet chlorine, is goods within the meaning of Section 3 of Central Excises and Salt Act, 1944 and whether it is classifiable under sub-heading 2801.10 of the Central Excise Tariff Act, 1985. THE subsidiary question is whether in that form, it is marketable even though the petitioner does not actually market it and captively consumes the same for the manufacture of Hydro chloric acid. W.P. 8647 of 1988 concerns the order of the Assistant Collector of Central Excise dated 25-4-1988 imposing a duty of Rs. 8, 00, 839. 80 for the total quantity of wet chlorine manufactured and removed without payment of duty for the period from 1-5-1987 to 31-10-1987. W.P. No. 12177 of 1988 is against a similar order dated 8-7-1988 for the period from 1-11-1987 to 30-4-1988 imposing a duty of Rs. 8, 41, 204. 44. W.P. No. 13838 of 1988 is against a show cause notice proposing to levy Rs. 8, 20, 421.78 for the period from 1-5-1988 till 30-9-1988. It is not disputed that the petitioner-company has an alternative remedy of filing an appeal under Section 35-A to the Collector of Central Excise (Appeals). Similarly in W.P. No. 13838 of 1988, the petitioner-company can submit its explanation and if an order is passed against it, an appeal can be filed.

(2.) LET me at the outset deal with the preliminary objection of Mr. A.S. Venkatachala Moorthy, counsel for the respondents. The submission is that this Court should not interfere with the impugned orders on the short ground of availability of adequate alternative remedy. In support of the contention, the following judgments are relied upon: (1)Assistant Collector of Central Excise, Chandran Nagarv. Dunlop India Ltd., 1985 (19) ELT 22, 1985 AIR(SC) 330, 1985 (58) CC 145, 1985 (1) CCC 622, 1985 ECR 4, 1985 (154) ITR 172, 1984 (2) Scale 819, 1985 (1) SCC 260, 1985 (2) SCR 190, 1985 UJ 368, 1984 (2) SCALE 819, 1985 (4) ECC 103, 1985 AIR(SCage) 330, 1985 SCC(Tax) 75), (2)Titaghur Paper Mills Co. Ltd.v. State of Orissa 1983 AIR(SC) 603, 1983 (142) ITR 663, 1983 (53) STC 315, 1983 (1) Scale 437, 1983 (2) SCC 433, 1983 (2) SCR 743, 1983 UJ 503, 1983 (34) CTR 393, 1983 TaxLR 2905, 1971 AIR(Calcutta) 112, 1983 (34) CTR(SC) 393) and S. Jagadeesan v. Ayya Nadar Janaki Animal College & Another 1984 AIR(SC) 1512, 1983 LIC 867, 1983 (2) LLJ 190, 1983 (2) LLN 340, 1983 (1) Scale 721, 1984 (1) SCC 158, 1983 UJ 186, 1983 (1) SLR 776, 1984 SCC(L&S) 98, 1984 SCC(L&S) 98, 1984 SCC(L&S) 98, 1984 SCC(L&S) 98, 1984 SCC(L&S) 98, 1984 SCC(L&S) 98). Reliance is also placed upon the unreported judgments in M/s. Z. Raja Beedi Factoryv. The Collector of Central Excise, Madras-34 (W.A. No. 257 of 1988 dated 2-3-1988), W.A. No. 1730 of 1987 dated 25-10-1988 and M/s. Southern Engineering Industries, Coimbatorev. The Superintendent of Central Excise, Coimbatore I Division, Coimbatore-1991 (52) ELT 373 (Mad.) (W.A. Nos. 865 to 875 of 1989 dated 30-10-1989). The principles are too well known. For more than one reason Courts should not take upon the duty of correcting every illegal order especially when it involves assessment of factual material or technical questions with which the prescribed authorities are more conversant and have expert knowledge. Equally, there is one other well accepted principle that when a writ petition has been admitted and is pending for some time, it will be improper to drive the party to an alternative remedy. Having all these principles in mind, it is for the Court to exercise its discretion in a judicious manner with the interest of both parties in mind. No doubt, the Division Bench in W.A. Nos. 865 to 875 of 1989 (cited supra) has considered this very aspect and still directed the party to invoke the alternative remedy. I have myself considered this aspect inMadura Coats Ltd.v. Asstt. Collector of C.E. 1990 (48) ELT 321]. There is also the judgment of the Supreme Court inRaj Soniv. AIR Officer Incharge Adnm. 1990 AIR(SC) 1305, 1990 (61) FLR 5, 1990 (2) JT 173, 1990 LIC 1161, 1990 (4) SLR 240, 1990 (1) Scale 711, 1990 (3) SCC 261, 1990 (2) SCR 412, 1990 (1) UJ 683, 1990 SCC(L&S) 466, 1990 SCC(L&S) 466, 1990 SCC(L&S) 466, 1990 SCC(L&S) 466, 1990 SCC(L&S) 466, 1990 SCC(L&S) 466, 1990 SCC(L&S) 466]. I, therefore, feel, it would be more appropriate to decide the issue after examining the merits of the case especially because the writ petitions are pending from 1988. If, while examining the merits of the case, it is felt that it would be more appropriate to relegate the petitioners to the remedy of appeal, it can always be done.

(3.) IN reply to the show cause notice, the petitioner-company contended that the wet chlorine which is taken through special pipe lines to the adjacent plant for manufacturing hydro chloric acid is not excisable goods. The petitioner-company relied on the order in Revision No. 1842/77 dated 30-7-1977 passed by the Government of INdia. That order of the Government was based on two grounds. (1) Wet chlorine did not satisfy the Technical meaning of compressed gas which alone could be brought under erstwhile Tariff Item 14 H. Compression as contemplated under 14 H should be compression as understood in the trade. Therefore, going by ISI standards wet chlorine did not satisfy the entry 14 H which related to compressed chlorine. (2) Following DCM'scase (1977 (1)E.L.T.J 199), the Government also held that the gas under consideration is not brought to the market, nor is it capable of being brought in the wet condition in which it is produced to be brought and sold. The Government proceeded to say that being violently reactive the wet chlorine in question will attack steel pipes or metal containers if stored as such. They went on to say that the 'wet chlorine' in question does not fulfil the requirements of being "goods" within the meaning of Section 3 of the Act. It was also pointed out that the very fact the Department had to work out the quantity of chlorine on the basis of Hydro chloric acid produced and converting the wet chlorine into dry chlorine on the basis of arithmetic formula goes to prove the inherent difficulty in holding the goods as excisable.