Excise duty on removed goods applies at factory clearance; trade notice cannot override the Central Excise Rules.

Central excise duty was payable on Sodium Meta Silicate at the time of removal from the factory, because a trade notice could not override the charging and removal provisions in the Central Excise Rules, 1944. Duty-paid Sodium Silicate used as input did not exempt the converted product from levy. In the absence of fraud, collusion, wilful misstatement or suppression of facts, the demand was confined to the normal six-month limitation period. The concessional rate under Notification No. 148/81-C.E. remained available if its conditions were otherwise satisfied for the relevant period.

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Issues: (i) Whether central excise duty was payable on Sodium Meta Silicate manufactured from duty-paid Sodium Silicate at the time of removal from the factory; (ii) whether the demand was to be limited to six months and whether the concessional rate under Notification No. 148/81-C.E. was admissible.

Issue (i): Whether central excise duty was payable on Sodium Meta Silicate manufactured from duty-paid Sodium Silicate at the time of removal from the factory.

Analysis: The trade notice relied upon by the lower appellate authority had no statutory force and could not override the charging and removal provisions in the Central Excise Rules, 1944. Under Rule 9(1), excisable goods cannot be removed until duty leviable thereon is paid, and Rule 49(1) fixes the point of payment when the goods are about to be removed from the factory. Since the goods removed after conversion were Sodium Meta Silicate, duty was attracted on that product at the stage of removal.

Conclusion: Central excise duty was payable on Sodium Meta Silicate and the assessee was not exempt merely because the input Sodium Silicate was duty-paid.

Issue (ii): Whether the demand was to be limited to six months and whether the concessional rate under Notification No. 148/81-C.E. was admissible.

Analysis: In the absence of any allegation of fraud, collusion, wilful misstatement, or suppression of facts, the demand could extend only to the normal limitation period of six months. The assessee was also entitled to the concessional rate under Notification No. 148/81-C.E. if the conditions of that notification were otherwise satisfied for the relevant period.

Conclusion: The demand was restricted to the period within six months prior to the notices, and the concessional notification benefit was left available if otherwise admissible.

Final Conclusion: The Revenue's appeal succeeded, the order of the lower appellate authority was set aside, and the original demand was restored, subject to restriction of the recoverable period to the normal limitation period and consideration of the concessional notification where applicable.

Ratio Decidendi: A trade notice cannot prevail over the statutory scheme of the Central Excise Rules, and excise duty is attracted on excisable goods at the time of their removal from the factory.

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