Excise duty on removal date governs liability for cartons cleared after a new levy, despite earlier exemption.

Excise duty was held to attach on the date of removal of goods, not merely on the date of manufacture, where cartons were manufactured while exempt but cleared after a new levy came into force. Applying the scheme of the Act and Rule 9A of the Central Excise Rules, the SC concluded that the rate prevailing at clearance governed liability, so pre-levy stock cleared after the levy was chargeable to duty and the assessee's objection was rejected.

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Issues: Whether cartons manufactured when they were exempt from duty but cleared after the new levy came into force were chargeable to excise duty.

Analysis: The appeal turned on the scheme of the Act and Rule 9A of the Central Excise Rules. The Court applied the principle that excise duty is attracted with reference to the rate prevailing on the date of removal of the goods, and not merely by reference to the date of manufacture, where the goods were cleared after the levy had been brought into force.

Conclusion: The cartons were liable to excise duty on clearance after the new levy came into effect, and the assessee's contention against duty on pre-budget stock was rejected.

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