1986 (1) TMI 321 - AT - Central Excise

Summary

Issues:
1. Whether duty is leviable on hard coke stock on 1-3-1978 under T.I. 11-D of the Central Excise Tariff.
2. Whether the exemption under Notification No. 176/77 applies to the hard coke stock.
3. Whether the goods were excisable but exempt from duty before 1-3-1978.

Detailed Analysis:
1. The case involves a demand for duty on hard coke stock on 1-3-1978 under T.I. 11-D. The respondents claimed the stock was "pre-budget stocks" fully manufactured before 1-3-1978, thus exempt from duty. The Appellate Collector accepted this plea, but the Central Government initiated proceedings. The Tribunal found the goods were excisable but exempt before 1-3-1978 and not liable to duty under T.I. 11-D post that date, citing the Kirloskar Bros. Ltd. case principle.

2. The respondents argued for exemption under Notification No. 176/77, applicable if clearances were up to Rs. 30 lakhs annually with plant and machinery investment not exceeding Rs. 10 lakhs. The Tribunal agreed that the goods were excisable but exempt before 1-3-1978, thus not liable to the new duty under T.I. 11-D post that date. The Tribunal relied on the Kirloskar Bros. Ltd. case, where goods were exempt before a specific date and liable to duty thereafter.

3. The Tribunal considered the exemption under Notification No. 176/77 and the Kirloskar Bros. Ltd. case, concluding that the goods were excisable but exempt before 1-3-1978. The Tribunal discharged the show cause notice and confirmed the Appellate Collector's order in favor of the respondents. The judgment emphasizes the importance of the date of clearance in determining the applicable duty rate, rather than the date of manufacture.

Additional Judgment:
- Member H.R. Syiem highlighted the significance of excise duty attachment to goods based on the provisions of the Central Excises and Salt Act, emphasizing the relevance of the day of clearance in determining the applicable duty rate. The judgment reinforced the principle that the rate of duty is tied to the day of clearance, not the date of manufacture, as per Section 4 and Rule 9A of the Central Excise Rules. The judgment aligned with the majority decision in the Vazir Sultan Tobacco Co. case, supporting the discharge of the show cause notice and confirming the Appellate Collector's order.