Excise duty on pre-budget stock follows the removal date rate, not the manufacture date, under the governing rules.

Excise duty is imposed on manufacture or production, but under the Central Excise scheme and Rule 9A the duty may be collected at the later stage of removal from the factory for administrative convenience. The taxable event remains manufacture, yet the applicable rate is the one in force on the date of removal unless the statute provides otherwise. Goods do not lose excisable character merely because they were exempt at the time of manufacture. On that basis, pre-budget stock was correctly subjected to duty at the removal-stage rate, and duty-free clearance was not available.

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Issues: Whether excise duty on pre-budget stock of manufactured goods was payable with reference to the date of manufacture or the date of removal from the factory.

Analysis: Excise is a duty on manufacture or production, but the scheme of the Act and Rule 9A of the Central Excise Rules, 1944 permit collection of the duty at a later stage for administrative convenience. The taxable event remains manufacture, while the payment of duty is postponed to the time of removal from the factory. Excisable goods do not cease to be excisable merely because they were exempt when manufactured, and the authorities were competent to apply the rate prevailing on the date of removal.

Conclusion: The duty was rightly levied with reference to the date of removal, and the assessee's claim to duty-free clearance of the pre-budget stock failed.

Ratio Decidendi: In excise law, the taxable event is manufacture or production, but duty may validly be collected on removal under the governing rules, so the applicable rate is the one in force at the time of removal unless the statute provides otherwise.

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