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Kumar Weaving and Industrial Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(16)ELT443TriDel
AppellantKumar Weaving and Industrial
RespondentCollector of Central Excise
Excerpt:
.....even a 'nil' assessment should be valid assessment for the purpose of the central excise act. hence, on careful consideration of the material placed, it is clear that the appellants cannot contend that the goods manufactured prior to the notification no. 233/77 are not liable for duty. therefore, the appeal is rejected.
Judgment:
1. This is a revision application filed before the Government of India which on transfer to the Tribunal is being treated as an appeal. The revision was directed against Order-in-Appeal No. 2622-C.E./77, dated 24-1-1978 passed by the Appellate Collector of Central Excise, New Delhi. He confirmed the order of the Assistant Collector Division I, Kanpur, in C. No. V-19(17) 154-Tech./77/14004, dated 2-9-1977. ' The appellants' unit manufacture cotton fabrics. According to them, the fabrics manufactured between 18-6-1977 and 14-7-1977 did not attract any duty in view of the Notification 134/77, dated 18-6-1977. The appellants have been requesting the authorities by several communications for approval of the classificat for list. There was a provisional classification on 7-7-1977 but the list was actually received on 13-7-1977. The appellants had to fulfil certain formalities like the execution of a bond, furnishing of bank guarantee, etc. They were unable to comply with them before 15-7-1977. But unfortunately for them, Notification 233/77, dated 15-7-1977 was issued and hence the goods, though they were manufactured anterior to the period of the Notification, were held to be liable for duty. The appellants preferred an appeal to the Assistant Collector, Division-I, Kanpur, who held the goods were actually cleared from the factory subsequent to the Notification and in terms of Rule 9A the rate of duty applicable would be as in force on the date on which they were cleared. This order was confirmed by the Collector on appeal.

3. Shri Gopal Prasad, Consultant, appearing for the appellants, urged that on the date of production, these goods were exempt from duty and that the subsequent Notification could not be pressed into service for attracting a levy. He referred to the decision 1978 E.L.T. (J 33) M.P.( Kirloskar Bros. Ltd., Dewas v. Union of India and Ors.). In the Kirloskar's case, the goods were fully exempt from excise duty under a Notification at the time of manufacture. They were, however, removed after the withdrawal of the exemption. The court held that as the goods were wholly exempt at the time of manufacture, they were not exigible to excise duty. The learned counsel therefore urged that the ratio of that decision will apply to the present case. Shri Tayal, learned S.D.R., contended that the liability to duty should be determined at the time of the actual removal of the goods from the factory and not on the date of manufacture or production of goods in the factory. He relied on the decision reported in 1980 E.L.T. p. 709 and 1978 E.L T.and 1983 E.L.T. p. 285.

4. It is not disputed that the goods were removed after the date of Notification No. 233/77, dated 15-7-1977. The appellants mainly contend that as the goods were exempt from duty at the time of manufacture, they are not liable for excise duty. But as rightly pointed out by the S.D.R., the taxable event for the purposes of excise duty is the date when the goods are removed from the place of manufacture. A combined reading of Section 3 and rules 7, 9 and 9A settles beyond doubt that the point of time at which the goods are liable to duty would be the actual removal of the goods from the factory or warehouse and not the date of manufacture or production of the goods in the factory. We have then to consider the effect of the Notification that exempted the goods from being liable for duty. The ruling reported in 1983 ECR 1559 considered the effect of an Exemption Notification. It is observed at page 1561 that simply because the Notification exempted payment from total duty subject to certain conditions does not mean that the goods have ceased to be excisable. In the ruling reported in 1983 E.L.T. 285 it was contended that since molasses was not listed as a separate item under the Schedule to the Central Excise Act prior to the Finance Act of 1980, molasses manufactured prior to the date of notification was exempted. This contention was negatived and it was held that excise duty was leviable not with reference to the date of manufacture of the excisable goods but at the time of the removal of the goods from the place of manufacture or from any place of storage. The learned counsel for the appellants placed reliance on the judgment reported in 1978 E.L.T. (J 33) (M.P.). But it must be pointed,out that this decision does not consider the effect of Rule 9A. As pointed out in the later rulings cited by the learned S.D.R., there is considerable force in the contention that the date of removal of the goods would be the basis on which exigibility of goods should be determined. Further, it is well-settled that even a 'Nil' assessment should be valid assessment for the purpose of the Central Excise Act. Hence, on careful consideration of the material placed, it is clear that the appellants cannot contend that the goods manufactured prior to the Notification No. 233/77 are not liable for duty. Therefore, the appeal is rejected.


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