1992 (2) TMI 242 - AT - Central Excise

Excise Duty Not Applicable Pre-Amendment: Tribunal Rules in Favor of Manufacturers

GANESH EXTRUSION ARTISTRIES Versus COLLECTOR OF CENTRAL EXCISE

GANESH EXTRUSION ARTISTRIES Versus COLLECTOR OF CENTRAL EXCISE - 1993 (66) E.L.T. 639 (Tribunal) Issues:- Whether Central Excise duty was attracted on lacquered or printed or lacquered and printed aluminium containers manufactured on or prior to 18-6-1980 and cleared thereafter.Detailed Analysis:1. The case involved an appeal against an order passed by the Collector of Central Excise (Appeals), New Delhi, regarding the dutiability of printed Aluminium tubes manufactured before the imposition of duty on lacquered or printed Aluminium tubes. The appellants contended that the printed tubes manufactured before 18-6-1980 should not be chargeable to Central Excise duty, even though they were cleared after the duty imposition on 19-6-1980.2. The appellants argued that the amendments in the Central Excise Tariff and the definition of 'manufacture' in the Central Excises and Salt Act, 1944 by the Finance Bill, 1980, should not have retrospective effect. They relied on legal precedents, including a Supreme Court decision and a Tribunal decision, to support their contention that goods manufactured before the introduction of relevant entries in the Tariff should be deemed non-dutiable.3. The Revenue, represented by the Junior D.R., argued that Central Excise duty was attracted on all clearances of lacquered and printed aluminium tubes from 19-6-1980 onwards due to the amendments in the law. The Revenue cited a Supreme Court decision to support their argument.4. The appellant's representative countered the Revenue's argument by distinguishing the facts of the case from the Supreme Court decision cited by the Revenue. The representative emphasized that the printed aluminium tubes in question were manufactured before the excisability of lacquering or printing of plain aluminium tubes.5. The Tribunal examined the case records and submissions from both sides. The key issue was whether Central Excise duty applied to lacquered or printed aluminium containers manufactured before 18-6-1980 and cleared thereafter, considering the amendments brought by the Finance Bill, 1980.6. The Finance Bill, 1980 introduced changes in the Central Excise Tariff and the definition of 'manufacture' to include lacquering or printing of plain aluminium containers. Prior to this amendment, the process of lacquering or printing of plain aluminium containers was not considered as manufacture.7. Referring to the Supreme Court decision in the Wallace Flour Mills case, the Tribunal highlighted that duty can be levied at a later stage for administrative convenience, and the duty payment is related to the date of removal of goods. The Tribunal emphasized that the taxable event is the manufacture of excisable goods, and duty is related to the date of removal.8. Citing the Tribunal's decision in the Vazir Sultan Tobacco case, the Tribunal reiterated that goods manufactured before the imposition of the levy cannot be subjected to duty based on rates applicable on the date of removal. The Tribunal emphasized that manufacture, not removal, is the taxable event for excise duty.9. The Tribunal concluded that the processes of lacquering or printing of plain aluminium containers were brought under the definition of 'manufacture' for the first time on 18-6-1980 by the Finance Bill, 1980. Therefore, printed or lacquered aluminium containers manufactured before this date were not excisable.10. As a result, the Tribunal held that no duty was leviable on the stock of printed and lacquered aluminium containers held by the appellants on 18-6-1980. The decision of the Collector (Appeals) to extend the benefit of a specific notification to such goods was deemed erroneous.11. Consequently, the appeal was allowed, and the appellants were entitled to consequential relief after adjusting any refunds allowed as per the impugned order.