Excise duty timing: rate at removal can apply even when manufacture is the taxable event, and earlier exemption does not end excisability.

Excise duty is a levy on manufacture or production, but under the Central excise scheme its collection may validly be deferred to the stage of removal. Rule 9A permits application of the rate in force on the date of removal even though the taxable event remains manufacture. Goods exempt at the time of manufacture do not cease to be excisable merely because of that earlier exemption, and the description of goods as subject to duty does not alter the nature of the levy. The article states that duty was properly levied by reference to the date of removal, and the contrary contention based on the date of manufacture was rejected.

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Issues: Whether excise duty on goods manufactured before the budget but removed after the rate became effective was payable on the basis of the date of manufacture or the date of removal, and whether goods exempted at the time of manufacture ceased to be excisable goods.

Analysis: Excise is a duty on manufacture or production, but under the scheme of the Central excise law the levy and collection may be postponed for administrative convenience to the stage of removal. Rule 9A provides for application of the rate prevailing on the date of removal, while the taxable event remains manufacture. Goods do not cease to be excisable merely because they were exempt at an earlier stage, and the descriptive reference to goods being subject to duty does not alter the nature of the levy.

Conclusion: The duty was correctly levied with reference to the date of removal, and the assessee's contention based on the date of manufacture was rejected.

Ratio Decidendi: Where the taxable event is manufacture, the rate of excise duty may validly be applied at the time of removal under the governing rules, and exemption at the time of manufacture does not convert excisable goods into non-excisable goods.

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