Annual levy principle in special excise duty: goods attract the rate in force during the relevant levy period, not a later enhanced rate.

Special excise duty was treated as an annual levy that ends on 28 February and is replaced by a distinct levy from 1 March, so goods manufactured in the earlier levy period were deemed cleared on the last day of that period for duty purposes. As a result, such goods attracted only the rate in force before 1 March 1989, not the enhanced rate applicable after that date merely because clearance occurred later. The Tribunal's view was affirmed, the Revenue's challenge failed, and the assessee's refund entitlement was left to be determined under the governing refund principles.

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Issues: Whether special excise duty on goods manufactured before 1 March 1989 but cleared after that date was chargeable at the rate prevailing prior to 1 March 1989 or at the enhanced rate in force after that date.

Analysis: Special excise duty was held to be an annual levy that expires on 28 February and is replaced by a distinct levy from 1 March. Goods manufactured during the earlier levy period are to be treated as cleared on the last day of that period for the purpose of levy, and therefore attract the rate prevailing during that period. The enhanced rate applicable to the later period does not govern such goods merely because they were cleared after the rate change.

Conclusion: The goods were liable to special excise duty only at the rate in force before 1 March 1989, and the assessee succeeded on the issue.

Final Conclusion: The Tribunal's view was affirmed, the Revenue's challenge failed, and the assessee's entitlement to refund was left to be worked out in accordance with the statute and the governing refund principles.

Ratio Decidendi: Special excise duty being an annual levy, the applicable rate is the rate in force during the levy period in which the goods are deemed to have been cleared, not the enhanced rate introduced for the succeeding period.

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