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TMI Blog1984 (7) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... about the month of April 1967. The Government of India, first respondent herein, by their Notification No. 163/65, dated 1-10-1965 extended concessional rates in respect of paper which was attributable to the enlarged production capacity of the producers and cleared after 1-3-1964. Under the said notification, as averred by the petitioner, issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules') the concession was to operate with reference to the period during which the paper was manufactured. However, the said notification was rescinded by Notification No. 87/73, dated 1-3-1973. The petitioner had claimed the benefit of the concessional rates of Excise duty in respect of the paper produced during the period related to the enlarged production capacity but removed from the factory after 1-3-1973, the date on which the earlier notification came to be rescinded. The Assistant Collector, Central Excise, 3rd respondent herein, based on the provisions of Rule 9A of the Rules, rejected the claim on the ground that the concession will not be available in respect of any stocks that are held by the manufacturers after the notification da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Section 4 of the Act reads: "4. Determination of value for the purpose of duty. - Where under this Act, any article is chargeable with duty at a rate dependant on the value of the article, such value be deemed to be- (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or (b) where such price is not ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto. Explanation. - In determining the price of any article under this section no abatement or ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or warehouse. (2) If the goods have previously been removed from warehouse under bond to be rewarehoused, and the duty is paid on such goods without their being rewarehoused, the rate and valuation, if any, applicable thereto shall be the rate and valuation, if any, in force on the date on which duty is paid or if duty is paid through an account-current maintained with Collector under rule 9, on the date on which an application in the proper form is delivered to the officer-in-charge of the warehouse from which the goods were removed. (3) Where any person who has removed excisable goods for export in bond fails to export or to furnish proof of such export to the satisfaction of the Collector or diverts the goods for home consumption, the rate of duty leviable and the tariff valuation, if any, in respect of such goods shall be the rate and valuation in force on the date on which the duty is paid." The case law cited be also noticed : Case law for the petitioner : 11. Kirloskar Brothers Ltd. v. Union of India - 1978 E.L.T. (J 33). - In this case Writ of Certiorari was sought to quash the demand dated 20-3-1972 directing the petitioner to pay the excise duty on the pre-budge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Case law for the respondent : 14.In U.O.I. v. Elphinstone Spg. Wvg. Mills Co. Ltd. - 1987 E.L.T. (J 680) a Division Bench of the Bombay High Court while construing the provisions of Section 3, Rules 7, 8, 9 and 9A, held : "One does not find any warrant in the Central Excise Act or the rules to spell out a construction that it is only the stage of manufacture or production of goods which attracts duty. Therefore, if at the date when the goods are removed from the place of manufacture, they are specified in Schedule I, they cannot be removed unless duty is paid on them, even though such goods have been manufactured when there was no excise duty on them." 15. In Alembic Chemical Works Co. Ltd., Baroda v. Union of India and Others - 1979 E.L.T. (J 258) a Division Bench of the Gujarat High Court, while considering the effect of withdrawal of exemption notification under Rule 9A, held : "When a concession flows from the rules, the effect of the withdrawal of that concession would save to be judged by the relevant rules themselves which provide a crucial date and for this purpose under rule 9A the rate of duty shall be the duty in force at the time of removal of these goods. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Rule 9A, 'that the excise authorities were right in applying the rates prevailing on the date of removal.' 18. Section 3 of the Act, which seeks to levy and collect duty reads in effect and substance, omitting unnecessary clauses, as under : "There shall be levied and collected...... duties of excise on all excisable goods...... which are produced or manufactured in India......and at the rates set forth in the 1st Schedule." In sum, levy of excise duty is on goods which are produced or manufactured. So, the impost is on the production or manufacture of the excisable goods. In fact, this has been so held by the Supreme Court, (vide A.K. Roy v. Voltas Ltd. - (MR 1973 S.C. 225) - 1977 E.L.T. (J 177; and Atic Industries v. Asst. Collector, Central Excise - (AIR 1975 S.C. 960) - 1978 E.L.T.(J 444). In other words, imposition of the duty is on the goods produced or manufactured. Section 4 provides for the determination of the value of the goods for the purpose of duty; Rule 8 enables the Authority to exempt certain goods in special circumstances, partially or wholly, from the imposition of excise duty; Rule 9 lays down the time and mode of payment of duty and Rule 9A schedules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty", were nevertheless led away by the provisions enacted in Rule 9A as well as the observations of Gwyer, C.J. in Province of Madras v. Boddu Paidanna Sons - AIR 1942 F.C. 33 wherein it is observed : "that the taxing authority does not ordinarily levy excise duty at the stage of manufacture or production for it is more convenient administratively to levy the duty when the goods leave the factory for the first time". 21. We apprehend, with great respect, the learned Judges misconceived the effect and impact of the observations of Gwyer, C.J. as well as the provisions enacted in Rule 9A. Merely because the mode and method adopted is to collect duty at a later stage, viz., at the time of clearance or removal of goods because of administrative convenience, the point of impost which is sine qua non in adjudicating as to when the commodity attracts duty, cannot be postponed. 22. A good look at the provisions in Rule 9A makes it pretty clear that four varied points of clearance are postulated for the determination of duty and tariff valuation, which should not be mixed up with or mistaken for the imposition of duty, which is the chief criterion for answering the question in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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