Rule 9A allows deferral of excise duty payment until removal; pre-budget stocks are not entitled to duty-free clearance.

The SC upheld the Tribunal's dismissal of the appeal, holding that while the taxable event under the Act is the manufacture or production of excisable goods, payment of duty may be postponed for administrative convenience until removal from the factory under Rule 9A. Rule 9A does not convert removal into the taxable event but defers liability to pay duty to the date of removal. Consequently the assessee's contention that pre-budget stocks were entitled to duty-free clearance was rejected and the appeal dismissed.

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Issues:
Classification of pre-budget stocks for duty-free clearance under the Central Excises and Salt Act, 1944.

Analysis:
The appellant, a manufacturer of food products, filed a classification list claiming duty-free clearance for pre-budget stocks. The Assistant Collector held the products excisable but exempt from duty. The Collector of Central Excise (Appeals) and the Tribunal upheld this decision. The appellant argued the goods were not leviable until 28th February, 1987, when they were made dutiable by the Finance Bill, 1987-88. The revenue contended the goods were excisable at the time of manufacture, and duty payment was postponed to removal date under Rule 9A of the Central Excise Rules, 1944. The Tribunal agreed with the revenue, emphasizing duty collection for administrative convenience.

The Tribunal's decision was based on the Act's scheme, where duty payment is related to the date of removal, not manufacture. The appellant argued the goods were exempt until 28th February, 1987, but the Court disagreed, stating excise duty is on manufacture or production, with payment postponed for administrative convenience. Citing Rule 9A, the Court clarified that removal, not manufacture, triggers duty liability. Referring to precedents, the Court affirmed that goods do not become non-excisable due to exemptions. The Court emphasized that duty collection can be postponed to removal date for administrative ease, despite manufacture being the taxable event.

Considering the excise law's scheme and the case's circumstances, the Court upheld the Tribunal's decision, finding no grounds to challenge it. The appeal was dismissed, with no order as to costs.

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