2003 (3) TMI 128 - HC - Central Excise

Summary

Issues:
Determining the point of liability for excise duty payment when transporting raw materials for explosives manufacturing to the mine site or after manufacturing at the mine site.

Analysis:
The petitioners, public limited companies dealing with industrial explosives, raised the issue of excise duty payment timing. They argued that under the bulk explosive system, manufacturing occurs at the mine site, not at the support plant. The process involves transporting raw materials in pump trucks to the mine site for on-site production. The petitioners emphasized that the point of manufacture, and thus excise duty liability, should be at the mine site, not when the pump truck leaves the support plant.

The respondents contended that excise duty should be paid when goods are removed from the factory premises, not at the mine site. They highlighted the prescribed procedures under Central Excise Rules for recording production, paying duty, and clearing goods before removal from the factory. The respondents accused the petitioners of bypassing duty payment by claiming to pay only after goods are consumed at the mine site, leading to revenue loss and security risks.

The petitioners' counsel argued for a uniform taxing procedure across states, citing a circular allowing flexibility in duty payment for certain goods. The respondents' counsel supported the current assessment method but suggested the petitioners approach the Central Board of Excise and Customs for any representation under Section 37B of the Central Excise Act, 1944.

The judgment directed the petitioners to submit representations to the Central Board of Excise and Customs for uniformity in excise duty assessment. The court refrained from expressing an opinion on the case's merits, maintaining status quo on duty recovery during the representation process. The writ petitions were disposed of without costs, with any deposited security to be refunded to the petitioners.