Excise duty liability on cured tobacco continues despite sale and transfer notice unless duty is actually discharged.

A fiscal scheme for tobacco excise treats manufacture or production as the taxable event, and the charging provision must be read with the removal and transfer rules so that primary liability is not defeated by a sale or intimation of transfer. Rule 19 fastens liability on the curer once the tobacco is cured and fit for sale, while Rule 29 operates only as an enabling collection mechanism against the purchaser as well, and does not extinguish the curer's liability unless duty is actually recovered from the purchaser. A construction allowing escape from duty on mere notice of transfer was rejected, and the curer's liability was treated as continuing until duty is effectively discharged.

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Issues: Whether a curer/manufacturer of tobacco remains liable for excise duty after sale and intimation of transfer of ownership, where the purchaser fails to pay the duty.

Analysis: The charging provision makes excise duty leviable on goods produced or manufactured in India, and the taxable event is manufacture or production. The related rules governing removal, curing, disposal, transfer of ownership, and continuance of liability were read together to determine their true scope. Rule 19 fastens liability on the curer once the product is cured and fit for sale, and Rule 29 was held to be only an enabling provision permitting collection from the purchaser as well, without extinguishing the curer's primary liability unless duty is actually collected from the purchaser. A construction that would permit escape from duty on mere intimation of transfer was rejected.

Conclusion: The curer's liability for excise duty does not cease merely on sale and intimation of transfer; the curer remains liable until duty is effectively discharged, and the demands were valid.

Ratio Decidendi: In a fiscal scheme, the charging provision and the collection machinery must be construed so that the primary duty liability of the manufacturer or curer is not defeated by a transfer arrangement unless the statute clearly extinguishes that liability.

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