2003 (4) TMI 423 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 224(2A) regarding the levy of duty at enhanced rates on clearances made after a specified time on Budget day.
2. Conflict in decisions regarding the effective date of duty rate revisions in the context of clearances on Budget day.

Analysis:
1. The case involves the appellant company, engaged in manufacturing rubber products falling under Chapter 40 of the Central Excise Tariff Act, 1985, which despatched goods on Budget day, 29th February 2000, after 11 AM, paying duty at the rate of BED 24% + SED 6%. Subsequently, a notification revised the duty rates to 16% for Basic Excise Duty and 16% for Special Duty of Excise from 1st March 2000. The appellant debited the differential duty amount and filed a refund claim, which was rejected by the Assistant Commissioner citing the suspension of Self-Removal Procedure on Budget day and the duty payment at the enhanced rate being in order.

2. The Tribunal considered Rule 224(2A), which allows for the removal of goods after 11 AM on Budget day by submitting an undertaking to pay duty at the enhanced rate applicable from the next day. The Revenue relied on previous decisions emphasizing the undertaking's importance, while the appellant cited cases supporting the applicability of earlier duty rates to clearances made on Budget day until midnight. Noting the conflicting views, the Tribunal decided to refer the matter to a Larger Bench to resolve the interpretation of the undertaking under Rule 224(2A) and Rule 9A(1) of the Central Excise Rules, 1944.

3. The Tribunal directed the Registry to present the issue before a Larger Bench to determine whether the undertaking under Rule 224(2A) would lead to the levy of duty at enhanced rates based on a notification dated 1st March 2000, for clearances made on 29th February 2000 after 11 AM but before 5 PM. This decision aims to address the conflicting interpretations and provide clarity on the effective date of duty rate revisions concerning clearances on Budget day, thereby resolving the apparent conflict in the Tribunal's previous decisions.

This detailed analysis highlights the key legal points and the Tribunal's decision to refer the matter to a Larger Bench for a conclusive resolution of the issues raised in the case.