1975 (7) TMI 73 - HC - Central Excise

Exemption notification - Effect of withdrawal - Change in rate of duty - Taxing statute - Canons of interpretation

Summary

Issues:
Whether excisable goods were liable to pay excise duty at the date of removal after the exemption was withdrawn.

Analysis:
The judgment revolves around the question of whether excisable goods were liable to pay excise duty at the date of removal after the exemption was withdrawn. The petitioner had manufactured goods before March 1, 1970, and upon removal after that date, excise duty was imposed due to the withdrawal of exemption. The court referred to various legal precedents to establish that the duty payable on excisable goods is determined by the rate in force at the time of removal. The essence of excise duty lies in its imposition on the manufacturer or producer, with the ultimate incidence on the consumer. The method of collection does not alter the nature of the duty, as long as it is charged on the manufacture or production of goods. The judgment emphasizes that the measure of tax may be determined at any convenient stage, including the removal of goods, without affecting the essence of the duty as an excise duty.

The judgment further addresses the argument that the Act and excise notification should be read as an integrated scheme, considering both the levy and exemptions granted. The court rejected the contention that the withdrawal of exemption rendered the goods non-excisable, emphasizing that excisability remained despite the exemption. The withdrawal of exemption led to the imposition of full excisability on the goods, attracting duty as per the relevant rules. The court distinguished a previous case where goods became excisable only upon a new tariff entry, highlighting that in the present case, the goods were already excisable, and the exemption was merely a concession under the rules. The withdrawal of this concession led to the imposition of full duty as per Rule 9A, without rendering the tax unconstitutional.

In conclusion, the court dismissed the petition, stating that the argument based on a misconception between the method of collection and the essence of the duty was unfounded. The judgment reaffirmed that excisable goods were liable to pay duty at the rate in force at the time of removal after the exemption was withdrawn, in accordance with the relevant legal provisions and precedents cited.