Excise duty on package tea: later clearance did not defeat liability where the goods were already excisable before the amendment.

Package tea bearing a brand name was already covered by tariff item 0902.00 before 2-6-1998, even though the rate of duty was nil. The later insertion of Chapter Note 4 in Chapter 9, treating labelling, relabelling and similar processes as manufacture, did not mean that such goods became excisable only from that date. Because excise is attracted on manufacture and collection may follow later for administrative convenience, goods manufactured before 2-6-1998 but cleared afterwards remained liable to duty at the applicable rate.

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Issues: Whether package tea bearing a brand name, manufactured before 2-6-1998 but cleared after that date, was liable to central excise duty in view of the introduction of Chapter Note 4 in Chapter 9 of the Central Excise Tariff Act, 1985.

Analysis: Prior to 2-6-1998, tea including tea waste was already covered by tariff item 0902.00, though the rate of duty was nil. The later introduction of Chapter Note 4, deeming labelling, relabelling and similar processes as manufacture, did not mean that package tea became excisable only from that date. The taxable event in excise is manufacture, but collection may follow later for administrative convenience. Since the goods were already excisable before 2-6-1998, the fact that they were cleared after that date did not make them immune from duty at the applicable rate.

Conclusion: The appeal failed and the Revenue's view was upheld; the package tea was liable to duty.

Ratio Decidendi: Where goods are already excisable before a later amendment, clearance after the amendment attracts duty at the applicable rate even if the levy is implemented through a subsequent deeming provision.

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