1984 (7) TMI 357 - AT - Central Excise

Summary

Issues:
1. Interpretation of levy of special excise duty on petroleum products held in bond by the appellant company.

Analysis:
The appeal before the Appellate Tribunal CEGAT New Delhi involved the determination of whether stocks of petroleum products held in bond by the appellant company, as of a specific date, would attract the levy of special excise duty upon their clearance from bonded warehouses on or after a certain date. The issue revolved around the imposition of special excise duty for the first time on a particular date by Section 37 of the Finance Act, 1978. The Assistant Collector initially decided that special excise duty was payable on such stocks cleared after a specific date, leading to the rejection of the claim for refund of the special excise duty paid by the appellants. The Appellate Collector upheld this decision, stating that the rate of duty applicable to bonded goods would be based on the date of actual removal from the warehouse, as per Central Excise Rule 9-A (1) (ii).

During the hearing, the appellant argued that excise duty should be levied based on the date of manufacture, contending that goods not attracting excise duty at the time of manufacture should not be charged upon clearance. The appellant cited judicial pronouncements to support their stance, emphasizing that special excise duty was a new levy applicable only to goods manufactured after the imposition of the levy. The appellant also highlighted the distinction between basic excise duty and special excise duty, asserting that the latter was not in force at the time of manufacture of the goods in question. The respondent, on the other hand, relied on a previous decision by the Tribunal and contended that special excise duty was chargeable upon the removal of goods, irrespective of its imposition at the time of manufacture.

In its analysis, the Tribunal referred to its previous decision in the Sirpur Paper Mills case, where it held that special excise duty applied to all excisable goods subject to basic excise duty upon their removal from the factory or warehouse. The Tribunal emphasized that the date of removal determined the levy of special excise duty, not the date of manufacture. The Tribunal rejected the appellant's argument that special excise duty was not covered under the definition of duty as per the Central Excises & Salt Act, emphasizing that Rule 9-A applied to both basic and special excise duties. The Tribunal distinguished a Delhi High Court decision, highlighting that the context was different and had no relevance to the present case.

Ultimately, the Tribunal dismissed the appeal, aligning with its previous decision in the Sirpur Paper Mills case and affirming that special excise duty was applicable to goods subject to basic excise duty upon their removal, irrespective of the duty's imposition at the time of manufacture.