COMMON ORDER

By a separate order, today i.e., on 18.12.2024 in W.P.No.14092 of 2022, this Court had allowed the Writ Petition filed by Mr.Natesan wherein, identical issue arose for consideration as to whether the benefit of exemption under the provisions of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 would ennure for exemption under Section 8(2) of the Central Sales Tax (CST) Act, 1956. Operative portion of the Order reads as under:-

“11. The decision of the Hon'ble Supreme Court in the case of Collector of Central Excise, Hyderabad Vs. Vazir Sultan Tobacco Co. Ltd., reported in 1996 (83) E.L.T.3(S.C) is not relevant. In the above case, the Hon'ble Supreme Court has merely held that adoption of provision of one fiscal statute does not mean that tax is payable under the adopting Act wherever it is payable under the adopted legislation. The case dealt with levy of excise duty under Section 3 of the Central Excise and Salt Act, 1944 as it stood then and the rules made thereunder. The Court merely held nil rate of duty is also a rate of duty following its ratio in Wallace Flour Mills Company Limited Vs. Collector or Central Excise, 1989 (4) SCC 592.

12. The Hon'ble Supreme Court in Vazir Sultan Tobacco Company Limited's case (cited supra) further held that once the levy is not there at the time when the goods are manufactured or produced in India, it cannot be levied at the state of removal of the said goods. The idea of collection at the stage of removal is devised for the sake of convenience.

13. The Court dealt with Special Excise Duty. It held that the idea of collection at the stage of removal is devised for the sake of convenience. It is not as if the levy is at the stage of removal. It is only the collection that is done at the stage of removal. Admittedly, the special excise duty is an independent duty of excise separate and distinct from the duties of excise levied by the Central Excises and Salt Act, 1944. This levy came into effect only on and from March 1, 1978 which means that the goods produced prior to that date were not subject to such levy. If that is so, the levy cannot attach nor can it be realised because such goods are removed on or after March 1, 1978.

14. Therefore, Special Excise duty was levied only for a brief period between 01.03.1978 and 28.02.1979. Paragraph 5 from the decision of the Hon'ble Supreme Court in Collector of Central Excise, Hyderabad Vs. Vazir Sultan Tobacco Co.

Ltd., 1996 (83) E.L.T.3(S.C) is reproduced below:-

“5. We are inclined to agree with Sri Sobarjee. Entry 84 of List-I of the Seventh Schedule to the Constitution empowers the Parliament to make a law providing for levy of duties of excise on tobacco and other goods manufactured or produced in India [except, of course, certain goods mentioned therein]. Indisputably, the special excise duty is an excise duty and is relatable to Entry 84. If so, the levy must be on the manufacture or production of goods. That is how the words “goods manufactured or produced in India” in Entry 84 have been understood by this Court throughout. Once the levy is not there at the time when the goods are manufactured or produced in India, it cannot be levied at the stage of removal of the said goods. The idea of collection at the stage of removal is devised for the sake of convenience. It is not as if the levy is at the stage of removal. It is only the collection that is done at the stage of removal. Admittedly, the special excise duty is an independent duty of excise separate and distinct from the duties of excise levied by the Central Excises and Salt Act, 1944. This levy came into effect only on and from March 1, 1978 which means that the goods produced prior to that date were not subject to such levy. If that is so, the levy cannot attach nor can it be realised because such goods are removed on or after March 1, 1978. The provisions of the Central Excise Act and the Rules, in our opinion, do not say otherwise."

15. The Hon'ble Supreme Court further obse