Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Amar Dye Chem. Ltd. on 31 October, 1989
Equivalent citations: 1990(26)ECC199, 1990ECR89(TRI.-DELHI)
ORDER
D.C. Mandal, Member
1. The respondents were engaged in the manufacture of S.O. Dyes falling under Tariff Item 14D. Prior to 19.6.80, there was no special excise duty on S.O. Dyes. From 19.6.80 special excise duty was imposed on the product. The respondents had some stock of finished S.O. Dyes on 18.6.80, which was cleared from their factory after 19.6.80. The question arose whether special excise duty was payable on the said stock. While the Assistant Collector held that the above duty was payable although the goods were cleared from the factory after 19.6.80, the Collector of Central Excise (Appeals) set aside the order of the Assistant Collector holding that those were pre-Budget stock and hence no special excise duty was payable thereon.
2. We have heard Shri Sunder Rajan, learned DR for the appellant-Collector and Shri Gopal Prasad, learned consultant for the respondents. Shri Sunder Rajan has argued that the issue involved in this case is covered by Gujarat High Court judgment in the case of Maheshwari Mills Ltd. v. Union of India and Ors. reported as Mihir Textiles Ltd. v. Union of India and Ors. [1988] 17 ECC 214 (Guj). and this Tribunal's order No. 258/89-C dated 8.6.89 in the case of Beardsell Ltd. v. Collector of Central Excise, Madras [1990] 26 ECC 197 (SB). He has argued that in the present case, the special excise duty was there before 19.6.80, but was exempted by notification No. 91/79-CE dated 1.3.79. This notification was withdrawn with effect from 19.6.80 by notification No. 69/80-CE dated 19.6.80. He has, therefore, argued that this case is squarely covered by the aforesaid two judgments.
3. Shri Gopal Prasad for the respondents has relied on this Tribunal's Orders No. 30/89-B1 dated 28.3.89 in the case of Collector of Central Excise, Hyderabad v. Sriram Refrigeration and No. 586/86-B1 dated 12.9.86 in the case of Union Carbide India, Calcutta v. Collector of Central Excise, Hyderabad.
4. We have considered the records of the case and the arguments addressed before us. The issue involved in the present appeal stands settled by the latest judgment of the Hon'ble Supreme Court in the case of Wallace Flour Mills Company Ltd. v. The Collector of Central Excise, Bombay III, reported in [1989] 25 ECC 169 (SC) : 1989 (2) SCALE 804. The facts of the said case as stated in paragraph-2 of the judgment of the Hon'ble Supreme Court are as follows:-
The appellant is a manufacturer of various types of food products known as Spaghetti, Macaroni, Vermicelli etc., falling under Heading No. 1902.10 of the Central Excise Tariff Act. The appellant filed classification list effective from 1st March, 1987 claiming that their pre-budget stocks of non-excisable goods, namely, various types of food products declared in the classification list as aforesaid were entitled to duty-free clearance being pre-budget stocks. The Assistant Collector of Central Excise, however, held that the question of clearing pre-budget stocks duty-free did not arise because the products in question were excisable though exempted from the duty. There was an appeal from the said order of the Assistant Collector before the Collector of Central Excise (Appeals), Bombay. He dismissed the appeal.
The appellant went up in appeal before the Tribunal. It was contended before the Tribunal on behalf of the appellant that the goods in question were not leviable to duty under the aforesaid head until 28th February, 1987 and the said goods had been made dutiable only by the Finance Bill, 1987-88 with effect from 1st March, 1987. It was submitted further that on 27th February, 1987, the appellant had in their factory a stock of the said products which were fully manufactured, packed and ready for sale and the inventory of the said stock was prepared by the Supdt. of Central Excise on 1st March, 1987. Reliance was placed on several decisions of the different High Courts, namely, decision of the Madhya Pradesh High Court in Kirloskar Brothers Ltd. v. Union of India 1978 ELT 33, Union of India v. Kirloskar Brothers Ltd. 1978 ELT 690, decision of the Bombay High Court in Synthetic Chemicals Pvt. Ltd. v. S.C. Coutinho 1981 ELT 414, decision of the Bombay High court in New Chemicals Ltd. v. Union of India 1981 ELT 920 decision of Madras High Court in Sundaram Textiles Ltd. v. Assistant Collector of Central Excise 1983 ELT 909, decision of Allahabad High Court in Union of India v. Delhi Cloth & General Mills 1978 ELT 177. On the other hand, the revenue contended that the goods forming the pre-budget stocks were very much excisable goods and that for the purpose of collecting duty, date of manufacture was not material under the scheme of the Act even though the taxable event is the manufacture. It was, therefore, contended that at the time of manufacture of the goods in question, the goods were excisable goods and in view of Rule 9A of the Central Excise Rules, 1944, though the taxable event is the manufacture and production, the payment of duty is related to and postponed to the date of removal of articles from the manufactory. The Tribunal accepted the said contention.
In the said case, the Hon'ble Supreme Court has held as follows:-
We are of the opinion that the Tribunal was right. It is well settled by the scheme of the Act as clarified by several decisions that even though the taxable event is the manufacture or production of an excisable article, the duty can be levied and collected at a later stage for administrative convenience. The Scheme of the said Act read with the relevant rules framed under the Act particularly Rule 9A of the said rules, reveals that the taxable event is the fact of manufacture or production of an excisable article, the payment of duty is related to the date of removal of such article from the factory. In that view of the matter, the Tribunal dismissed the appeal and rejected the assessee's contention.
Accordingly, it was held therein that the Tribunal was right and there was no ground to assail the order of the Tribunal. The appeal filed by Wallace Flour Mills Company Ltd. was dismissed by the Hon'ble Supreme Court.
5. In the light of the above discussions and following the judgment of Hon'ble Supreme Court delivered in the case of Wallace Flour Mills Company Ltd. (supra), we hold that special excise duty was payable on the stock of S.O. Dyes manufactured prior to 19.6.80, but cleared from the respondents' factory after 19.6.80. Consequently, we set aside the impugned order and allow the appeal filed by Revenue.