1. This is a revision application to the Government of India under Section 36 of the Central Excises and Salt Act, 1944 (as then applicable) which, in accordance with Section 35P(2) ibid is to be proceeded with as if it were an appeal filed before the Tribunal. After notice had been duly issued, the matter was taken up for hearing.
2. The appellants are manufacturers of various goods covered by different Tariff Items of Central Excise Tariff, such as: The Central Excise duty on the goods was raised by the Finance Bill 1978, introduced in the Lok Sabha on 28.2.1978. The Appellants represented to the Excise authorities that the duty should be assessed on their goods at the rates applicable as in force before the introduction of the Budget. The Assistant Collector of Central Excise by his order dated 3.3.1978 rejected the appellants claim. The Appellate Collector of Central Excise, Calcutta by his order No.161/WB/1979 dt. 6 J. 1979 upheld the orders of the Assistant Collector of Central Excise.
Aggrieved by this order, the appellants filed a Revision before the Central Government, which stands transferred to this Tribunal, to be proceeded as if it were an appeal filed before this Tribunal.
3. Shri Sengupta stated that he had nothing to add by way of oral submissions to what had already been set out in their revision application dated 5.6.1980.
4. Smt. Zutshi, appearing for the Respondent, stated that the legal position in this matter was very clear. Rule 9A of the Central Excise Rules, 1944 clearly lays down that the rate of duty and tariff valuation applicable to any excisable goods shall be the rate of duty and tariff value in force on the date of the actual removal of the goods from a factory. Since the Appellants' goods were cleared from their factory after introduction of the Finance Bill, 1978, in the Parliament, the Department were fully justified in subjecting the said goods to the rates of duty as prescribed by the said Finance Bill. As regards the case of M/s. Kirloskar Brothers decided by the Madhya Pradesh High Court, which had been cited by the Appellants before the Appellate Collector of Central Excise. Smt. Zutshi stated that the Appellants' case was not on all fours with the case of M/s. Kirloskar Brothers. The judgment of the Madhya Pradesh High Court, Smt Zutshi maintained, was applicable to a situation where the goods in question were fully exempted from payment of duty. Admittedly, this was not the position in the Appellants' case. Hence the Appellants' contention in this behalf had no merit.
5. We have carefully considered the submissions made by the Appellants and the representative of the Respondent. The Appellants have mainly based their case on the following two grounds : (i) Section 3 of the Central Excises and Salt Act, 1944 which is the charging section in the Act, stipulates that the duty of excise is leviable on all excisable goods "which are produced or manufactured in India". Since the process of manufacture is complete when they are shifted to the factory godown for storage prior to their final clearance from the factory, they should attract the rate of duty prevalent on the date when such goods are fully manufactured and shifted to the factory godown.
(ii) The Madhya Pradesh High Court, in their judgment in the case of Kirloskar Brothers Ltd., Dewas v. the Union of India and Two Ors.
1978 E.L.T J33 : 1978 Cen-Cus 12D had decided a similar case and the decision of the Honourable Court in that matter fully supported the Appellants' case.
6. As regards the first submission made by the Appellants, viz., that the duties of excise are leviable on excisable goods which are produced or manufactured in India, that is admittedly the legal position as set out in Section 3 of the Act. However, there is a basic flaw in the Appellants' line of argument in this behalf. They have viewed the levy and collection of duty from only one angle which supports their contention. However, levy and collection of duty involves a gamut of operations, e.g. authority to levy duty, authority or mechanics for fixation of value where the duty is to be levied on value basis, the crucial date or time with reference to which the rate of duty and tariff value are to be determined, etc., etc. In the scheme of levy and collection of central excise duties, Section 3 of the Act is the charging section. Section 4 ibid governs the manner in which assessable value is to be arrived at for the purposes of assessment. However, for determining as to what would be the rate of duty or tariff value for excisable goods, one has to refer to Rule 9A of the Central Excise Rules, 1944. In fact, Section 3 of the Act, on which Shri Sengupta has heavily relied in support of his case, itself refers to the 'manner' in which duties of excise shall be levied and collected. The manner or mechanics in this context are embodied in Rule 9A of the Central Excise Rules, 1944. In the Appellants' case there is no dispute that their goods were cleared from the factory premises after the Finance Bill, 1978 had come into force. It was therefore correct on the part of the assessing authorities to subject the Appellants' goods to central excise duty on the rate(s) of duty as modified by the Finance Bill, 1978. In this view of the matter we are unable to agree with Shri Sengupta's submissions in this behalf.
7. As regards the contention of Shri Sengupta that the judgment in the case of Kirloskar Brothers supports their stand, we have gone through the judgment of the Madhya Pradesh High Court cited by the Appellants.
Para 9 of the judgment is materially relevant. The Appellate Collector has taken the view that the ratio of the above judgment applies to cases where the goods had been fully exempted from payment pf central excise duty. In the instant case, however, this is not the position.
The goods manufactured and cleared by the Appellant were subject to certain rates of duty which were modified to the disadvantage of the Appellants by the authority of the Finance Bill, 1978. In this connection, we would like to reproduce the following observations from the judgment relied upon by the Appellants: We may observe that there is no case directly on the instant point for consideration before us, but the above cases merely lay down the general principles as to the nature of the excise duty. The nature of the duty is that it is essentially a tax on production or manufacture of excisable goods. Therefore, whenever an exemption is granted by the Central Government, it is in respect of goods manufactured or produced during that period. But excise duty will certainly not be leviable in respect of goods manufactured or produced during the exemption period.
From the above observation of the Honourable High Court, it is quite clear that the Appellants cannot seek any advantage from the above judgment because the goods manufactured by them did not fall into the exempted category. On this count also, we find ourselves in agreement with the finding of the Appellate Collector of Central Excise, Calcutta.
8. We may also refer to majority judgment of Supreme Court in Shinde Brothers etc v. Deputy Commissioner, Raichur , where Sikri Judge speaking for the majority about Excise duty inter alia observed as under: Further the levy need not be imposed at the stage of production or manufacture but may be imposed later.
From this observation, it would appear that the Excise authorities were justified in demanding from the appellants the enhanced rate of duty in force on the date of removal of the goods from factory and not at the rate in force on the date when goods were manufactured.
9. Besides, it is not disputed that the rate of duty applied to the appellants' goods was in accordance with Rule 9A(i) (ii) of the Central Excise Rules, 1944. It is not open to this Tribunal to question the vires of this Rule vis-a-vis the Madhya Pradesh High Court Judgment (Supra). The duty levied must, therefore be held to be in order and legal.
10. In the result we find no merit in the present appeal and dismiss the same.