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TMI Blog1987 (2) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... assis, the removal of 11 chassis will not be allowed. The Union Budget introduced 5% of the Basic Excise Duty as Special excise duty. The appellants removed in June, 1980, nine out of the eleven chassis on payment of special excise duty "UNDER PROTEST". The appellants have paid Rs. 15,836.68. The appellants requested the Assistant Collector to authorise re credit of the amount in their P.L.A. the Assistant Collector informed the appellants that special excise duty was correctly paid in Terms of Rule 9A. As order was passed to this effect on 26-9-1980. An appeal was preferred to the Collector of Central Excise (Appeals) who decided the appeal against the appellants on 24-1-1981. Hence the revision. 3. Shri V. Lakshmi Kumaran, learned Counsel for the appellants submitted that the issue is covered by the decision of the Tribunal. In 1985 (21) E.L.T. 757 (Vazir Sultan Tobacco Co. v. C.C.E., Hyderabad), the Five Member Bench of the Tribunal considered the question of Special Excise Duty and held that the :- "Special Excise Duty was not attracted to goods manufactured prior to the date of the imposition even though they were liable to Basic Excise Duty on the date of removal." Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others v. Atul Products Ltd.), the Supreme Court has observed that :- "..........under a notification exemption could be claimed only where the dyes used in the manufacture of other types were liable to payment of excise duty when they were manufactured and such duty had been paid". SDR urged that both in Amar Dyeing Chemicals and in Atul Products, the judgement of Shinde Brothers had not been cited. 5. It was urged that the judgement of the Supreme Court rejecting the special leave petition in respect of Kirloskar Bros.' case was not a judgement under Article 131 of the Constitution and no law had been laid down. In 1985 (156) I.T.R. 493 (Commissioner of Income-Tax v. Indraman Amrati Lal), the Gujarat High Court has stated as follows :- "The only effect of not granting special leave is that the legal position enunciated by the Judgment of the court sought to be appealed against is one where the Supreme Court for valid reasons declines to interfere. In any case it would be unsafe to say that the effect of not granting the special leave, even where the court has in its order refusing to grant the leave stated that special leave petition was dismissed on merits, since there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of removal should be the consideration for the purpose of attracting the levy. 7. Shri Lakshmi Kumaran, in his reply stated that the decision of Shinde Brothers has been considered by the Larger Bench in the Vazir Sultan and certainty of law was essential in such matters. He cited AIR 1980 S.C. 1762 (Ambika Prasad Mishra v. State of U.P. and others). There is no contradiction between the judgment of Shinde Brothers and the decision of the Supreme Court in the Kirloskar Brother's case. Section 37 of the Finance Act envisaged the levy of special excise duty for the first time. The Supreme Court had not dismissed the special leave application in Kirloskar's case in "limine" but dismissed the special leave petition on merits which would make all the difference. 8. The points for consideration in the appeal are :- (i) Whether the appellants are liable to pay special excise duty; (ii) Whether the ratio of M.P. High Court in Kirloskar Brothers' case reported in 1978 (2) E.L.T. (J 33) (Kirloskar Brothers Ltd. v. Union of India and two others) are applicable to the facts of the present case. 9. Since both the issues involve consideration of identical facts, we are taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. 10. Shri A.K. Jain mainly argued that the issue that came up before the M.P. High Court in 1978 (2) E.L.T. (J 33) (cited supra) in respect of stock manufactured during the period no excise duty was payable. The M.P. High Court has observed that the liability to excise would arise no sooner the manufacture or the production is completed and it is immaterial as to what machinery may be devised by the Central Government under the rule making powers for recovery of tax. It is stated that :- 'The point of recovery or any restriction on removal will not be the determining factor for grant of exemption in respect of the goods manufactured during the duty free period." The SLP was filed before the Supreme Court and it was dismissed on merits. Shri A.K. Jain submitted that the earlier decision of the Supreme Court in the case of Shinde Brothers (cited supra) held by a Bench of 5 Judges that the levy need not be imposed at the stage of production or manufacture but imposed later. He emphasised that the earlier decision in Shinde Brothers should apply to the present case. We are of the view that there is no conflict between the decision of the Supreme Court in Shinde Brothers or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision with the authority of the Supreme Court. But it must be mentioned that the dismissal therein was in "limine" and not on merits. In 1985 (156) ITR 493 (Commissioner of Income-Tax, Gujarat-III v. Central India Builders), the Gujarat High Court has considered the case of dismissal of a special leave petition by the Supreme Court. In that case the special leave petition was preferred by the Commissioner against the Division Bench decision of the Gujarat High Court. The Supreme Court dismissed the special leave petition on merits. But on a reference the case of the Division Bench came up for hearing before the Full Bench of the same High Court. The Full Bench ultimately, overruled the Division Bench judgment. In the state of affairs, the Division Bench of the Gujarat High Court had to consider the situation. It is observed therein that the parties should proceed on the basis of the Full Bench decision. It is stated that the only effect of not granting special leave petition was that the legal position enunciated by the judgment of the court sought to be an appealed against was one which the Supreme Court for valid reasons declined to interfere. On the same basis it must be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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