Excise duty on manufacture bars later levy on pre-commencement stock, so post-date clearance did not create liability.

Additional Excise Duty introduced from 11.07.2014 could not be imposed on goods manufactured and brought into stock before that date merely because they were cleared later. Excise liability arises on manufacture or production, while collection at removal is only a mode of recovery; since no levy existed when the goods were manufactured, the later statutory introduction could not retrospectively fasten duty on pre-levy stock. The demand was therefore unsustainable.

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Issues: Whether Additional Excise Duty was leviable on goods manufactured and lying in stock before 11.07.2014 but cleared after 11.07.2014, when the levy was introduced with effect from 11.07.2014.

Analysis: The levy of Additional Excise Duty was introduced by Section 118 of the Finance Act, 2014 with effect from 11.07.2014 for the relevant goods. The decisive question was whether goods already manufactured before the commencement date could be subjected to the new duty merely because they were cleared later. The issue had already been decided in the appellant's own matters and in a similar case, following the settled principle that excise duty attaches to manufacture or production, while collection at the stage of removal is only for convenience. Once no levy existed at the time of manufacture, the later introduction of duty could not be applied to goods manufactured earlier. The departmental acceptance of earlier favourable orders also supported the same view.

Conclusion: Additional Excise Duty was not payable on the pre-11.07.2014 stock cleared after that date, and the demand could not be sustained.

Ratio Decidendi: Excise duty is attracted by the event of manufacture or production, and where no levy existed at that stage, the subsequent collection mechanism cannot fasten the duty on goods manufactured before the levy came into force.

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