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TMI Blog1984 (12) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... . After payment of duty under protest the appellants made an application for refund. This was rejected by the Assistant Collector of Central Excise, Ranchi on the ground that though the manufacture may have been at a time when exemption was applicable the clearances were at a time when duty was payable after withdrawal of the exemption and hence duty had been rightly collected. This order was affirmed on appeal by the Appellate Collector of Central Excise, Calcutta under order dated 10-7-1980. The revision petition to the Government of India against the said order has been transferred to this Tribunal and is being disposed of as an appeal under this order. 2. Sri P.R. Biswas, Consultant, appeared for the appellants and Sri S.N. Khanna, Senior Departmental Representative, for the department. 3. The appellants relied upon several decisions of High Courts, and also an order of the Supreme Court, in support of their contention that if manufacture had been at a time when no duty was payable by reason of an exemption notification then no duty can be recovered even if the clearances were subsequent to the withdrawal of the exemption notification. On the other hand the department rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the article may not have been even excisable at the time of manufacture, duty could yet be collected if at the time of clearance duty was payable. 6. The Bombay High Court (at page 686 of the report, has, in fact, observed as follows : We do not find any warrant in the Act or the Rules to spell out a construction that it is only the stage of manufacture or production of goods which attracts duty. The scheme of the Act is that a duty of excise is levied on certain goods which are specified in the First Schedule to the Act. The qualifications so far as the classes of goods on which the duties are levied are two, namely - (1) that they must be specified in the First Schedule as being subject to a duty of excise and (2) they must be produced or manufactured in India. Section 3 does not itself specify the point of time at which the duty is to be levied or imposed. It requires the levy of the duty and the collection of the amount of duty to be prescribed by the Rules. The combined effect of Section 3 and Rules 7, 9 and 9-A so far as the present case is concerned, is that in the case of the mills the duty was attracted on the goods in question on the date of the actual removal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approach if there is a decision of the Supreme Court on the matter at issue, since this Tribunal would be bound to follow the decision of the Supreme Court irrespective of conflicts between the High Courts. 9. It has been already seen that the Madhya Pradesh High Court had in 1978 E.L.T. 33 held that in respect of goods manufactured during a period when they were exempted from payment of duty under a particular notification the department could not demand duty on the basis that the clearances of the goods were subsequent to the withdrawal of the notification. It has also been seen that when the Government applied to the Madhya Pradesh High Court for leave to appeal to the Supreme Court the same was dismissed under the decision reported in 1978 E.L.T. 690. It has also been seen that when a Special Leave Petition was filed before the Supreme Court the same was dismissed, the dismissal being specified to be on merits though no detailed judgment was pronounced. The question is as to what would be the effect of such an order, whether it should be deemed to have been by way of affirmation of the principles laid down in the judgment sought to be appealed against or without such specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of opinion that this Tribunal is bound to follow the same principle in the present case also, as the facts are identical to the facts in the case in which the Supreme Court passed its order dated 1-9-1977. 12. We, therefore, hold that the appellants were entitled to the refund claimed. Accordingly, this appeal is allowed and the orders of the lower authorities are set aside, with consequential relief. [Order per : H.R. Syiem, Member]. - 13. This Tribunal has held in Order No. 367/84-C, dated 12-6-1984 and Order No. 420/84-C, dated 29-6-1984 that the rate of duty on the day of removal must be the rate that should be applied. These decisions of this Tribunal receive support from two decisions of the Supreme Court both delivered after the order of 1-9-1977 (by the Supreme Court) in the Kirloskar case. The first in the Prakash Cotton Mills v. B. Sen - Civil Appeal Nos. 1992-1997 and 2219 of 1969 decision delivered on 25-1-1979. To the question whether the Customs authorities were justified in applying the rate of duty (to the imported goods in question) according to the rate prevalent on the date of their actual removal from the warehouse , to use the Court s own words, the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Supreme Court was concerned with a dispute under the Customs Act in respect of imported goods, while the present problem is in respect of goods manufactured in India and the law is the Central Excises and Salt Act, 1944. Such an argument fails to comprehend the true spirit of the decision of the Supreme Court. Rule 9A of the Central Excise Rules, 1944, has provisions very similar to Section 15 of the Customs Act, 1962. The relevant part of this Central Excise Rule runs as follows - the rate of duty and tariff valuation, if any, applicable to any excisable goods shall be the rate and valuation in force, - (i) ........................... (ii) In the case of goods (removed) from a factory or a warehouse, subject to sub-rules (2), (3) and (3A), on the date of the actual removal of such goods from such factory or warehouse. 17. The event that sets in motion the rate of duty of central excise is the removal of the goods from a factory for sale and consumption. Various duties could have arisen in respect of the goods from the time they are manufactured till the duty on them is paid. If the duty is paid a considerable time after the manufacture, there can be two or thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax entries follows from the fact that a tax has two elements: the person, thing or activity on which the tax is imposed and the amount of the tax. The amount may be measured in many ways; but decided cases establish a clear distinction between the subject-matter of a tax and the standard by which the amount of tax is measured. These two elements are described as subject of a tax and the measure of a tax. 19. The Court observed the levy of a tax is defined by its nature, while the measure of the tax may be assessed by its own standards. The Court further went on to say that when enacting a measure to serve as a standard for assessing the levy, the legislature need not contour it along lines which spell out the character of the levy itself. Viewed from this stand point, the Court said, it is not possible to accept the contention that because the levy of excise is the levy on goods, manufactured or produced, the value of an excisable article must be limited to the manufacturing costs and the manufacturing profit. In paragraph 15 of this judgment, the Court said that Section 4 envisages a method of collecting tax at the point of the first sale effected by the manufacturer. 20. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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