9911796707
TMI Blog2018 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... otton yarn in plain reel hanks under 32 invoices to M/s. Ramasamy & Co. (Appellant in E/81/2009) and others. According to department, though the clearances are shown to have taken place in the late hours of 27.2.2002, the same could not have taken place till on 27.2.2002 and has taken place only on next day after the presentation of Finance Bill that is after 11:00 hours on 28.2.2002. Thus, it appeared that the appellant had removed cotton plain reel hanks from the factory after the withdrawal of exemption on 28.2.2002 without payment of central excise duty. Show cause notice was issued proposing to demand duty of Rs. 56,26,992/- as central excise duty along with interest and for imposing penalties. The cotton yarn seized from the premises were proposed to be confiscated besides proposing to impose penalties. After due process of law, the original authority confirmed the demand of Rs. 42,02,577/- along with interest and imposed equal penalty. A penalty of Rs. 2,00,000/- was imposed on M/s. Ramasamy & Co. under Rule 26 of Central Excise Rules, 2001/2002. In respect of cotton yarn which was seized from M/s. Ramasamy & Co. and provisionally released on furnishing of bond, they were di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts issue by the Central Government for publication in the official gazette. The date of issue of the notification rescinding the exemption is 1.3.2002. Thus, even if it is assumed for argument sake that the appellant has cleared the goods on 28.2.2002, levy of excise duty / withdrawal of exemption cannot be applied prior to 1.3.2002. 2.3 The Commissioner failed to see that Rule 30A of Central Excise (No.2) Rules, 2001 cannot override the benefit given by a notification issued under Section 5A of the Central Excise Act, 1944. He adverted to the Provisional Collection of Taxes Act, 1931 and submitted that the said legislation was intended to amend the law provided for the immediate effect for a limited period of provisions in Bills relating to the imposition or increase of duties of customs or excise. Thus, only when a duty imposed in a Bill is declared to have immediate effect, the same would be leviable with immediate effect. In the present case, the notification clearly states that the withdrawal of exemption is to take effect only with effect from 1.3.2002. Therefore, the clearances prior to 1.3.2002 will get the benefit of exemption. 2.4 In any case, the facts establish that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Annual Budget, would attract violation of Rule 30A of Central Excise (No.2) Rules, 2001. Therefore, the appellants are liable to pay excise duty on the goods cleared by them on 28.2.2002. He heavily relied upon the decision in the case of Vikrant Tyres Ltd. (supra). 4. Heard both sides. 5. The short issue for consideration is whether the appellants are liable to pay duty on the goods cleared by them prior to 1.3.2002. According to appellant, the goods were cleared on 27.2.2002 whereas the case of the department is that the same is cleared on 11:00 a.m. on 28.2.2002. Be that as it may, even if it is considered that the goods are cleared on 28.2.2002, the withdrawal of exemption by Notification No.. 13/2002 dated 1.3.2002 would be effective as per the Notification only from 1.3.2002. The Commissioner has relied upon rule 30A of Central Excise (No.2) Rules, 2001. The relevant Rule is noticed as under:- "30A. Restrictions on removal of goods - (1) Notwithstanding anything contained in these rules, no goods shall be removed from a factory or a warehouse between the time appointed for presentation of the Annual Budget or any Supplementary Budget of the Central Government in the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that case that the appellants had filed undertaking that they are willing to pay enhanced rate of duty and sought permission to remove goods on eve of presentation of the Budget for the year 2000 - 01. After having furnished the undertaking, the appellants lodged refund claim stating that enhanced rate of duty had come into existence only with effect from 1.3.2000. The Larger Bench of Tribunal after taking note of the fact that the appellant has furnished undertaking to pay enhanced duty held that they are estopped from raising such protest or claiming refund. In the present case, there is no such undertaking filed by the appellant. Even if we consider that there has been procedural infraction on the part of the appellant in not taking permission from the Commissioner to clear the goods on Budget day, the notification rescinding the exemption has come into force only from 1.3.2002. Their clearances have been made on 28.2.2002 when the exemption notification was still in force. Therefore, the demand of duty on the goods cleared, in our view, cannot sustain. It is also worth mentioning that the Tribunal in the case of Vikrant Tyres (supra) has not taken note of Section 3 and 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. Commissioner of Central Excise, Bangalore reported in 2003 (158) E.L.T. 251 (Tri.-LB). xxxx xxxxx xxxxx xxxxxx 6. We find that this view is supported by the decision of the Tribunal in the case of J.K. Synthetics Ltd. (supra). In that case, goods were cleared from 17.30 hrs to 17.50 hrs on 19- 3-1990, the budget day. It was contended by the Revenue that the provision of Rule 224 of the Rules applicable to the budget day clearance and the assessee is required to honour the undertaking. The Tribunal has held as under :- "6. In our view the basic principle to be followed is the same irrespective of whether it is a case of new levy or enhancement of the rate of pre-existing levy as the Section 4 of the Provisional Collection of Taxes Act makes budget provisions applicable from the mid-night following the budget day in both eventualities inasmuch as its clause 1 says that "a declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced" and these provisions are applicable in all cases where "it is expedient to amend the law providing for the immediate effect for a limited period of provisions in bills relati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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