1975 (7) TMI 71 - HC - Central Excise

Summary

Issues:
1. Petition for a certificate of fitness for leave to appeal to the Supreme Court.
2. Interpretation of excise duty liability on power driven pumps.
3. Application of Section 3 and Section 4 of the Central Excises and Salt Act, 1944.
4. Exemption period and duty imposition date.
5. Comparison with relevant Supreme Court judgments.
6. Liability for excise duty concerning the time of manufacture or removal.
7. Relevance of rules for duty payment and rate determination.
8. Dismissal of the petition without notice to the other side.

Analysis:

The case involves a petition seeking a certificate of fitness for leave to appeal to the Supreme Court against a Division Bench decision regarding the liability of excise duty on power driven pumps. The respondent company had a branch manufacturing these pumps and benefited from an exemption until 16-3-1972, after which a 10% ad valorem duty was imposed. The Court referred to the Central Excises and Salt Act, 1944, particularly Section 3, which levies duty on the production or manufacture of excisable articles. It was held that excise duty liability arises at the time of manufacture, exempting goods produced before 16-3-1972 from duty but making goods manufactured after that date liable for the 10% duty.

The petitioner relied on a Supreme Court judgment stating that excise duty is payable at the time of removal, emphasizing the importance of Section 4 and relevant rules for duty calculation. However, the Court distinguished this case, asserting that under Section 3, the liability for excise duty is tied to the time of manufacture or production. The notification imposing duty from 17-3-1972 was deemed prospective, making goods produced on or after that date subject to duty. The Court highlighted the distinction between the time of manufacture and removal in determining excise duty liability, emphasizing the significance of Section 3 over Section 4 and related rules.

Further, the Court discussed the provisions of Section 4 of the Act and relevant rules governing duty payment time and rate determination. While acknowledging the relevance of prevailing rates at the time of goods removal, the Court reiterated that excise duty liability is rooted in production or manufacture completion, not removal from storage. As the case did not involve a substantial question of law of general importance, the petition for leave to appeal to the Supreme Court was dismissed summarily without notice to the other party.