1. Refund of excise duty on cotton/cellulosic spun yarn manufactured in a composite mill and cleared after a specific date. (Para 1 )
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1997 Supreme(SC) 997
SUPREME COURT OF INDIA
J. C. MILLS LIMITED
Vs.
COLLECTOR OF central EXCISE, Indore
Decided July 23, 1997
Interpretation of duty rates and applicability of exemption notifications based on the time of goods removal.
Headnote:
Refund - Excise Duty on Cotton/Cellulosic Spun Yarn - Interpretation of Duty Rates
Fact of the Case:
The appellant, a composite mill manufacturing yarn and fabric, paid excise duty on yarn manufactured between 18/6/1977 and 15/7/1977, which was cleared after 15/7/1977. The claim for refund was refused by the tribunal based on the duty rates at the time of goods removal.
Finding of the Court:
The court held that duty is payable as per Notification No. 276/77 dated 15/7/1977 for the spun yarn cleared after 15/7/1977. The benefit of exemption under Notifications Nos. 131/77 and 132/77 dated 18/6/1977 would be available for spun yarn used for fabric manufacture prior to 15/7/1977.
Issues: Refund of excise duty, interpretation of duty rates, applicability of exemption notifications
Ratio Decidendi: The duty is payable based on the rates in force at the time of goods removal. Exemption under specific notifications applies to spun yarn used for fabric manufacture prior to a certain date.
Final Decision: The appeal was disposed of accordingly with no costs awarded.
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Table of Contents
2. Dispute over whether excise duty is determined by the date of manufacture or the date of removal of goods. (Para 1 )
3. The court applied precedent holding that duty is payable according to the notification in force at the time of removal. (Para 1 )
4. Excise duty is chargeable at the rates in force at the time of removal of the goods. (Para 1 )
5. Appeal disposed of; duty payable per Notification No. 276/77, with exemptions available for yarn used in fabric manufacture prior to the cutoff date. (Para 1 )
6. At what point in time is the rate of excise duty determined for goods?
Excise duty is chargeable based on the rates in force at the time of the removal of the goods. (Para 1 )
7. Under what condition is the exemption for spun yarn available despite the removal date?
Exemption benefits are available for spun yarn that was used for the manufacture of fabrics prior to the specified date. (Para 1 )
( 1 ) THIS appeal relates to refund of excise duty on cotton/cellulosic spun yam manufactured in the mills of the appellant, which is a composite mill manufacturing yarn as well as fabric. Excise duty was paid by the appellant on the yarn manufactured between the period 18/6/1977 and 15/7/1977which was cleared on or after 15/7/1977. The claim for refund has been refused by the Customs, Excise and Gold (Control) Appellate tribunal (hereinafter referred to as "the tribunal") by the impugned judgment on the ground that duty is chargeable on the rates in force at the time of removal of goods. This matter is covered against the appellant by the judgment of this court in CCE v. Surat Cotton Spg. and Wvg. Mills (P) Ltd. wherein it has been held that duty is payable as per Notification No. 226/77 dated 15/7/19777. In view of the said decision of this court, it must be held that the appellant is liable to pay duty on the basis of Notification No. 276/77 dated 15/7/1977 in respect of the spun yarn which was manufactured between the period 18/6/1977 and 15/7/1977 but cleared on or after 15/7/1977 but the benefit of exemption under Notifications Nos. 131/77 and 132/77 dated 18/6/1977 would be available on spun yarn which had been used for the manufacture of fabrics prior to 15/7/1977. The appeal is disposed of accordingly. No costs.
