1991 (12) TMI 73 - HC - Central Excise

Summary

Issues:
- Whether additional duty of excise can be levied on products exempted from payment of excise duty?
- Whether the provisions of exemption from Central Excise duty apply to the levy of additional duty of excise?

Analysis:
1. The petitioner, a government undertaking, manufactures television sets for export. The export proceeds are payable in U.S. Dollars equivalent to Rs. 2,60,00,000. The Central Excise duty is leviable on television receivers under the Central Excises & Salt Act, 1944. Exemption notifications by the Central Government exempt Black and White Television Receivers from excise duty, while other types are chargeable. Additional duties of excise under Section 49 of the Finance Act, 1985, were introduced as a one-time levy on Television Sets at a uniform rate of Rs. 100 per set.

2. Section 49 of the Central Excise Act introduced additional duties of excise on goods manufactured in India, which are in addition to any other excise duties. Rules have been framed to enable exporters to export goods without payment of excise duties by furnishing a bond. Rule 13 allows for the export of goods without duty payment against the execution of a bond, with duty becoming payable if goods are not exported. The petitioner exported television sets to Bangladesh under this rule.

3. A notice was issued to the petitioner demanding an additional duty of excise for the export of 500 television sets. The petitioner's request to export a consignment without payment of additional duty was denied, leading to payment under protest. Subsequent requests to the Assistant Collector were unanswered, prompting the petitioner to file a writ petition challenging the levy of additional duty on exported television sets.

4. The petitioner relied on the Finance Minister's Budget Speech, stating that the additional duty of excise was levied in lieu of the license fee for television sets. The petitioner argued that if there is an exemption from excise duty, additional duty should not be levied. The court held that if there is an exemption from Central Excise, it should also apply to the levy of additional excise duty. As such, the writ petition was allowed in favor of the petitioner.

5. The court found that the exemption from Central Excise duty should also extend to the additional duty of excise levied under Section 49. The judgment was in favor of the petitioner, and orders were issued accordingly. The respondents did not file an affidavit-in-opposition, and the allegations in the petition were not admitted by them.