IMPORTANT POINT
Under the terms of the Financial Acts, special excise duty is so levied as to cease to have effect at close of the financial year and as such the date of manufacture is the date upon which the levy attaches to goods; the date of payment is deferred to the date of clearance.

Headnote:EXCISE DUTY-Special excise duty levied under Finance Act, 1987-By reason of notification there was a total exemption from levy-By Finance Act, 1988, special excise duty also levied-Goods manufactured prior to 28th Feb., 1988 and cleared after 1st March, 1988 whether were subject to payment of special excise duty-Date of manufacture is the date upon which levy attaches to goods-Date of payment is deferred to date of clearance-Goods must be deemed to have been cleared on last date of levy of special excise duty that was in force when they were manufactured-Appellants were not liable to pay any special duty upon said goods. (Paras 4, 7 & 8)

JUDGMENT

Bharucha, J.-These appeals challenge the correctness of a judgment and order of the Customs, Excise & Gold (Control) Appellate Tribunal. The Tribunal had before it the Revenue s appeals against orders of the Collectors (Appeals) in the cases of a number of assessees, of which the appellants were two. The Tribunal reversed the orders of the Collectors and held that the collection of special excise duty on clearances on or after 1st March, 1988, of goods which had been manufactured prior to that date was valid.

2. Special excise duty is levied under the provisions of the Finance Acts. There was no levy for a long period of time of special excise duty until it was levied with effect from 1st March, 1978, under the provisions of Section 37 of the Finance Act, 1978, which read thus :

"(1) In the case of goods chargeable with duty of excise under the Central Excise Act as amended from time to time, read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable there shall be levied and collected a special duty of excise equal to five per cent of the amount so chargeable on such goods.

(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1979, except as respects things done or omitted to be done before such cesser and Section 6 of the General Clauses Act, 1897 (10 of 1897) shall apply upon such cesser as if the said sub-section, had then been (repealed) by a Central Act.

(3) The special duty of excise referred to in sub-section (1) shall be in addition to any duties of excise chargeable on such goods under the Central Excise Act or any other law for the time being in force.

(4) The provisions of the Central Excise Act and the rules made thereunder, including those relating to refunds and exemptions from duties shall, as far as may be, apply in relation to the levy and collection of the special duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules, as the case may be."

3. The judgment of this Court in the case of Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd.1, dealt with a case where goods had been manufactured prior to 1st March, 1978, and cleared thereafter. The judgment, in paragraphs 9, 10 and 15, reads thus :

"9. Rules 9 says that "no excisable goods" should be removed from the place of their manufacture until excise duty leviable thereon has been paid "at such place and in such manner" as is prescribed in these Rules. It is relevant to notice that the Rule specifically uses the expression "excisable goods"-and not "goods"-and for good reason. The expression "excisable goods" has been defined in clause (d) of Section 2 to mean "goods specified in the First Schedule as being subject to a duty of excise and includes salt." The goods removed must be excisable goods first-which means that the goods were subject to the levy of duty before their removal. Rule 9A is to the same effect. Sub-rules (1) to (3A) of Rule 9 A may be set out in their entirety in view of the reliance placed by both the counsel upon them. They read :

"(1) The rate of duty and tariff valuation, if any, applicable to any excisable goods shall be the rate and valuation in force.

(i) in the case of goods removed from the premises of a curer on payment of duty, on the date on which the duty is assessed; and

(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.

(2) If the goods have previously been removed from a warehouse to be re-warehoused, and the duty is paid on such goods without their being re-warehoused, the rate and valuation, if any, applicable thereto

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Judicial Analysis

SupremeToday

1997 Supreme(SC) 126

IMPORTANT POINTUnder the terms of the Financial Acts, special excise duty is so levied as to cease to have effect at close of the financial year and as such the date of manufacture is the date upon which the levy attaches to goods; the date of payment is deferred to the date of clearance.

Cases Referred (1)

Judicial Analysis

IMPORTANT POINT
Under the terms of the Financial Acts, special excise duty is so levied as to cease to have effect at close of the financial year and as such the date of manufacture is the date upon which the levy attaches to goods; the date of payment is deferred to the date of clearance.