Excise duty on turnkey contract goods follows the date of actual removal, not project completion date

For excisable goods cleared under a turnkey contract with price escalation, the duty rate is determined by the date of actual removal of each item from the factory. Rule 9A(1)(ii) applies where that date is ascertainable, and the residuary Rule 9A(5) cannot be used to substitute the date on which the last item of the project is removed. The operative effect is that each clearance is taxed at the rate in force on its own removal date, rather than by reference to project completion.

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Issues: Whether, for excisable goods cleared under a turnkey contract with price escalation, the applicable rate of duty is to be determined by the date of actual removal of each item from the factory or by the date on which the last item of the project was removed.

Analysis: Rule 9A(1)(ii) governs goods removed from a factory or warehouse and fixes the relevant date as the date of actual removal of such goods. Rule 9A(5) is a residuary provision and applies only to cases not covered by the specific clauses of Rule 9A. Where the date of actual removal is ascertainable, the specific rule prevails and the department cannot substitute the date of removal of the last item in a turnkey project as a new charging date.

Conclusion: The applicable rate of duty is the rate in force on the respective dates of actual removal of each item, not the date on which the last item of the contract was removed; the contention of the assessee succeeds.

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