TaxTMI 
TaxTMI 
2017 (4) TMI 695
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....ductors and Steel Tubular Poles in the original Central Excise Registration Certificate of the existing unit of M/s Tirupati LPG Cylinders, engaged in the manufacture of LPG Cylinders, with the Conductor Division and Cylinder Division units being part of the same factory (as evident from the party's action in not seeking a separate registration for the Conductor division), was it not necessary for the party to increase the capacity of the entire factory (comprising of Conductor & Cylinder Division) by 25% to qualify being benefited as per the stipulations of Notification No. 50/2003-CE dated 10.06.200 as the word 'unit' or 'industrial unit' in common parlance is understood as the factory premises as it was in this context of synonymy that the appellant had on 30.11.2002 sought the addition in their existing certificate of registration? 2. Whether the fact that the Conductor Division of the factory commenced the commercial production before 07.01.2003, does not make the party / respondent not eligible for availing the benefits of Notification No. 50/2003-CE dated 10.06.2003, as it has failed to adhere to its stipulations in having failed to commence commercial production on....
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....tor Division) was not correct, as the Khasra Nos. 238/1, 238/2, 235 & 237, at which the Conductor Division was situated, were the same as the one in which the Cylinder Division was situated and it could not be a new unit. The department's case, further, was that the Company had started commercial production of the Conductors well before 07.01.2003 and, hence, the contention that the Conductor Division is a new unit was questioned. The Company also claimed the benefit of the Notification in Clause 2(b) on the score that it had undertaken an expansion of its capacity by more than 25 per cent. The stand of the department, apparently, was that condition in Clause 2(b) of the Notification dated 10.06.2003 was not satisfied insofar as the documentary evidence produced by the Company in the form of Engineer's Certificate did not mention about the enhancement of the installed capacity in regard to the Conductor Division. In other words, the stand of the Department was that there were two types of manufacturing divisions, namely, the Cylinder Division and the Conductor Division. Therefore, the installed capacity must be of both the Divisions together. The enhancement of installed capacity o....
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....e of production can be earlier to the date of issue of the certificate. As already pointed out above, all main machines were available with the noticee before 04.01.2003 and new Die continues wire drawing machine was purchased only on 05.04.2003. On the basis of machines purchased during October - December, 2002, DIC has endorsed the registration. Therefore, it may be said that the ACSR conductor division was existing before 07.01.2003 and thus it is not a new unit in terms of notification no. 50/2003-CE dated 10.06.2003." The Notifications: 3. It is necessary to have a look at the Notifications. On 10.06.2003, Notification No. 50/2003-CE came to be issued. It reads as follows: "In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in t....
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....not exceeding ten years from the date of publication of this notification in the Official Gazette or from the date of commencement of commercial production, whichever is later." 4. Actually, in Notification No. 50/2003-CE dated 10.06.2003, the proviso was not there. The proviso was inserted by Notification No. 76/2003-CE dated 05.11.2003. 5. In Annexure-II relating to the State of Uttaranchal, under district Dehradun, at Serial No. 11, is mentioned "Selakui Industrial Region" in Column 2 under the heading "Name of the Industrial Estate / Area / Region". In the third column, under the heading "Name of Villages coming in Industrial Estate / Areas", village "Selakui" is mentioned. Under the heading "Khasra Nos.", there is reference expressly to Khasra Nos. 235 to 259 and 260. The Tehsil, which is the last column, is indicated as Vikasnagar. 6. Still later, by Notification No. 27/2004-CE dated 09.07.2004, clause (2) was substituted. 7. There is a further amendment vide Notification No. 27/2005- CE dated 19.05.2005. By the said amendment, a new paragraph 2 was substituted. It reads as follows: "2. The exemption contained in this notification shall apply only to the ....
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....ons the khasra number of the plots of land of which the Industrial area/ Industrial estate comprises. In this case the appellant* s factory is located at khasra No. 235,237,238/1 and 238/2 of Selakui Industrial Region located in Tehsil Vikas Nagar, District Dehradun. Even during period prior to 19/05/05, in Annexure II under the list of "Existing Industrial Estates /Region of District Dehradun" Selakui Industrial region" of tehsil vikasnagar is mentioned against S.No. 11 and against "Selakui Industrial Region" among the khasra numbers, the khasraNos 235 to 257 are mentioned. Therefore the factory of the appellant unit has to be treated as located in the notified Industrial area and therefore eligible for exemption even during the period prior to 19/5/05. By notification No. 27/05-CE dated 19.5.05, against S.No 11 of the list of existing Industrial areas of District Dehradun given in Annexure II, only the name of the village mentioned in 3rd column against "Selakui Industrial Region" was changed from "Selakui" to "Village Selakui", Central Hope Town and Camp Road* The amendment by notification No. 27.05-CE dated 19.5.05, by which the name of the village in which the Industrial Area ....
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....before 7/1/03, this notification would also cover these unit, which had been set up before 7/1/03, but commenced commercial production on or after 7/1/03. Therefore, "new industrial unit" would include not only those units set up on or after 7/1/03, but would also include those industrial units which have been set before 7/1/03. But the* new industrial unit* set up either on or after 7/1/03 or set up prior to 7/1/03, must, for being eligible for the exemption satisfy the condition of having commenced their commercial production on or after 7/1/03. This condition becomes important for the units set up before 7/1/03, as the units set up on or after7/1/03 would naturally have commenced their commercial production on or after 7/1/03 and thereby would satisfy this condition. If an Industrial unit installed prior to 7/1/03 had commenced its commercial production prior to 7/1/03, it would be out of the purview of the notification. For this purpose, distinction has to be made between "Commercial Production" and "Trial Production". Though the term "commercial production" is not defined in this notification, it should be construed in contradistinction with the term "Trial Production" Trial P....
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.... of 2003 w.e.f. 14.05.2003. The same reads as follows: "35G. Appeal to High Court. - (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law. (2) The Commissioner of Central Excise or the other party aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be - (a) filed within one hundred and eighty days from the date on which the order appealed against is received by the Commissioner of Central Excise or the other party; (b) accompanied by a fee of two hundred rupees where such appeal is filed by the other party; (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. (2A) The High Court may admit an appeal after the expiry of the period of one....
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....rom - (a) any judgment of the High Court delivered - (i) in an appeal made under section 35G; or (ii) on a reference made under section 35G by the Appellate Tribunal before the 1st day of July, 2003; (iii) on a reference made under section 35H, in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or (b) any order passed [before the establishment of the National Tax Tribunal by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment." 17. Even though the said provisions stood repealed by the National Tax Tribunal Act, 2005 w.e.f. 28.12.2005, the repealing Act, in turn, came to be challenged before the Apex Court and by the decision rendered in Madras Bar Association vs. Union of India & another, reported in (2014) 10 SCC 1, the repealing Act itself came to be struck down as being unconstitutional. 18. Learned counsel for th....
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....nt, that appeal must be heard by a Special Bench. Cases that relate to the rate of customs duty for the purposes of assessment and which relate to the value of goods for the purposes of assessment are advised treated separately and placed before Special Benches for decision because they, more often than not, are of importance not only to the importers who are parties thereto but also to many other importers who import or propose to import the same or similar goods. Since the decisions of CEGAT in such matters would have wide application they are, by the terms of the statute, to be rendered by Special Benches. The phrase 'relation to" is, ordinarily, of wide import but, in the context of its use in the said expression in Section 129-C, it must be read as meaning a direct and proximate relationship to the rate of duty and to the value of goods for the purposes of assessment. 20. More importantly, the court adverted to Section 129D of the Customs Act. The said section actually dealt with the powers of the Board and the Collector of Customs to revise proceedings of the subordinate authorities. The crucial provision was, however, sub- section (5). The same was introduced by the a....
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....this Explanation expressly confines the definition of the said expression to Sub- section 5 of Section 129-D, it is proper that the said expression used in the other parts of the said Act should be interpreted similarly. The statutory definition accords with the meaning we have, given to the said expression above. Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods. 12. This, then, is the test for the purposes of de....
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....ot directly related to taxable income, it may be called tax computed at a certain rate. We agree with the High Court that the rebate of tax and the reduction of such rebate are essentially matters of measure or standard of rate."" 23. The court noted that the explanation was, actually, not brought into force. It purported to refer to the judgment of the Bombay High Court in Commissioner of Central Excise, Nagpur vs. Universal Ferro and Allied Chemicals Ltd., reported in 2009 (234) ELT 220 (Bom.). In paragraph 41 of the judgment, the learned Judges proceeded to take the view that the argument that the rate of tax means only the rate at which the tax is payable or a fraction is unsustainable. We may refer to paragraphs 41 and 42 of the judgment, which read as follows: "41. Therefore, the expression 'rate' is often used in the sense of standard or measure. 'Rate' generally is an impost, usually for current or recurrent expenditure spread over a district or other local area and is distinct from an amount payable for work done upon or in respect of particular premises. 'Rate' is defined by Webster to be the price or amount stated or fixed for anything. The word 'rate' includ....
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....ean fraction of tax payable because what is the tax payable i.e. fraction payable is decided by the legislature. Once that is prescribed by the legislature in the Act, the Court cannot sit in judgment and alter or modify the said rate of tax. The Court has no jurisdiction to go into the correctness or otherwise of the rate of tax payable in the sense the rate prescribed by the legislature. Therefore, the argument that the rate of tax means only the rate at which tax is payable or a fraction is unsustainable. 42. Broadly the following disputes do not fall within the jurisdiction of High Court under Section 35(g) of the Act :- (a) Dispute relating to the duty of excise payable on any goods. (b) The value of the goods for the purposes of assessment. (c) A dispute as to the classification of foods. (d) Whether those goods are covered by an exemption notification or not. (e) Whether the value of goods for the purposes of assessment is required to be increased or decreased. (f) The question of whether any goods are excisable goods or not. (g) Whether a process is a manufacturing process or not, so as to attract levy ....
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....on Bench proceeded to refer to the judgment of the very same court. Besides, it drew support from the judgment of the Apex Court in Navin Chemical's case (supra) and held that a dispute as to whether or not the assessee is covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for the purpose of assessment. 26. In the decision of the Bombay High Court in Union of India vs. Auto Ignation Ltd., reported in 2002 (142) ELT 292 (Bom.), the question was as to whether the writ petition filed by the Government of India challenging the order of the Tribunal could be maintained having regard to the availability of an alternate remedy under Section 35L. Various authorities on the question relating to existence of alternate remedy barring the jurisdiction under Article 226 were referred and, on the point, which is relevant to us, the court took the following view: "23. Having heard the parties at length, it is not possible to accept the contention raised by the learned Counsel for the Revenue. In the light of the findings recorded in the case of Navin Chemicals Mfg. and Trading Co. (supra) and looking to the text of Section 35L ....
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....e Supreme Court, have proceeded on the basis of the explanation which was inserted under Section 35E of the Excise Act corresponding to identical explanation in the Customs Act and the actual terms of the explanation, namely, clause (c) thereof may not bear out this interpretation insofar as what the legislature has provided by clause (c) was a question whether the goods are or are not covered by an exemption notification or order providing for exemption partially or absolutely. It is not intended to cover the question whether the assessee is actually entitled to the benefit of the notification in a case where there is no dispute about the goods being covered. 29. Thereupon, the learned counsel for the respondents would contend that the excise duty is levied on the taxable event taking place, namely, the manufacture of goods. It is qua goods that exemption is granted. Therefore, the mere fact of vagueness in the use of expression in this regard in the judgments may not matter. He would also submit that, even under the explanation as it stood, the decisions of the High Courts, which are canvassed before us, would support him in contending that, besides the question relating to wh....
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....s is inserted w.e.f. 06.08.2014. It purports to lay down that, for the purpose of deciding the expression, the question "having a relation with the rate of duty" would include the question relating to "taxability" and "excisability" of the goods. In this regard, he would submit that, as far as the excisability of the goods is concerned, that would go to question relating to whether there were excisable goods as understood under the Act; whereas, the expression taxability would relate to and comprehend the issues arising out of an exemption notification. Thus, even if it is found that the goods are excisable, since the expression "taxability" is also employed, it would mean that, by virtue of the exemption granted under an exemption notification, it may become non-taxable by virtue of a partial or absolute exemption in accordance with the terms thereof. 32. Per contra, Mr. H.M. Bhatia, learned counsel for the Revenue, would submit that exemption notification is to be interpreted and its scope determined on the basis of the words employed in the notification. It has nothing to do with the rate of duty. The rate of duty is fixed. The Tribunal, as in this case, has only decided the ....
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....e trimmed or untrimmed circles of brass would fall under Serial No. 201, where the rate of duty was Rs. 3500/-. If the product in question fell under Serial No. 200, then the notification provided that the rate of duty is nil. After adverting to the exemption notification, the court held, inter alia, as follows: "In this case, we are concerned with interpretation of Entries in the Notification. The exemption Notification covers goods which squarely fall under Chapter Heading 74.09. In fact, both S. No. 200 and S. No. 201 of the Notification deal with Chapter Heading 74.09. A dichotomy was noticed in the Notification and it was found that the circles manufactured by the assessee were made from brass; whereas the exemption notification provided for nil rate of duty for all goods other than trimmed/untrimmed circles of copper intended for use in the manufacture of utensils." 36. Thereafter, the court proceeded to hold as follows: "5. We may also point out at this stage that it is well settled position in law that exemption Notification has to be read strictly. A notification of exemption has to be interpreted in terms of its language. Where the language is plain a....
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....s not total but only partial. What it clearly meant was deduction on duty from the amount of duty already paid and, therefore, that notification is different in content as well as intent and the ratio therein cannot be taken as sufficient to fit in with the notification involved in the present appeals. 17. How the Revenue has understood the notification or made others to understand this position can be seen from the instructions or circulars issued by the Central Board of Excise and Customs (for short "the Board") from time to time. One such circular is dated 15.5.1995 no. 125/36/95-CX. The material portion thereof are extracted below: "There are a number of notifications which exempt specified goods provided such goods have been made from other goods on which the appropriate duty of excise has already been paid board has issued instructions from time to time that in such cases, even if the issued instructions from time to time that in such cases, even if the inputs are exempted from excise duty, the exemption on the finished goods cannot be denied on that ground. Still, cases have been brought to notice where exemption is being denied on the ground that the input....
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....herefore, the court may decide. May be, the argument is being raised at this stage by the Company. The appeals were filed in the year 2015 and they were admitted on substantial questions of law Nos. 1 & 2. We would think that a question relating to the jurisdiction of the court cannot be brushed aside on the ground that it is being raised late. This is not a question of territorial jurisdiction. This is also not a question relating to pecuniary jurisdiction. This is a question, which goes to the very root of the matter, namely, it goes to the inherent jurisdiction of the court. If the appeal is one, where the impugned order of the Tribunal has decided a question having a relation with the rate of duty, clearly the appeal would not lie before the High Court and it would be maintainable only before the Supreme Court under Section 35L. Therefore, we cannot but decide this issue. 42. In Navin Chemical's case (supra), the Apex Court has enunciated the principle after interpreting the words "question having a relation with the rate of duty" and held that, while the words "having relation with" are capable of wide import, it must be read as meaning a direct and proximate relationship w....
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....ince it provided company to the second limb of clause (c), it may detain us for a moment. A question whether the goods fall under a particular heading or a sub-heading of the First or Second Schedule to the Act, undoubtedly, often provides a vexed issue for determination. Depending on the particular heading or sub-heading on which the goods fall, the same would axiomatically lead the court to the rate of duty. We must also bear in mind the rationale for bringing a decision on the said issue before the Apex Court. The issue as to whether the goods fall under a particular heading or sub-heading would have ramifications beyond the parties to the particular dispute. Similar goods may be manufactured by several others. It is, apparently, therefore, that it was felt that such questions must be decided by the Apex Court. The effect of deciding that the goods fall under a particular heading or sub-heading, as already noted, would have a direct and proximate relation to the rate of duty. It is in this context that we must examine the words "any goods are or not covered by a particular notification or order providing for partial or absolute exemption". Just as in the first limb, where the qu....
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....question of law is raised as to whether the goods in question are or are not covered by the terms of the notification. The specific question of law, which is raised, goes to the availability of the notification having regard to the fact that the respondent Company has not complied with the terms of the notification. In our humble view, the decisions of the High Courts, which have purported to follow Navin Chemical's case, have proceeded to overlook the actual words used in the explanation and virtually substituted the words "goods" with "assessee". In other words, instead of confining the latter limb of clause (c) to a situation where a dispute arise as to whether the goods are or are not covered by the notification, it has been extended to situations where the question arose as to whether the assessee fulfilled the conditions of the exemption notification, which we would think was not warranted by the provisions in clause (c). 48. We have to pass on to the next development presented in the matter, namely, the omission of the explanation itself by Parliament in the year 2004. That is to say, the legislative basis partially for rendering the judgment in Navin Chemical's case and ....
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.... rate of duty" would not be embraced within its scope. 50. Coming to the expressions "taxability" or "excisability", there are two ways of looking at it. Since two expressions are used, they bear two different meanings. Ordinarily, the courts would not attribute to the legislature an intention to waste words in a statute. An interpretation would be placed, which would avoid superfluity or deprive the word of all meaning. Words in a statute cannot be afflicted with the vice of surplusage. Or, is it such a case? Excisability, what it comprehends: 51. Is it sufficient that the goods are excisable goods? What if a person is sought to be visited with excise duty if he contends that they are not goods because nothing new is produced? What is allegedly produced is not capable of being marketed. They are not usable. Can he still be visited with a levy of excise duty? The answers to these questions have been succinctly provided in the judgment of the Apex Court in Moti Laminates Pvt. Ltd. & others vs. Collector of Central Excise, Ahmedabad, reported in (1995) 3 SCC 23. There, the court also was dealing with a case, where the goods were captively consumed. The court held as follows:....
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....oods on which any excise duty could be levied. 11. Although the duty of excise is on manufacture or production of the goods, but the entire concept of bringing out new commodity etc. is linked with marketability. An article does not become goods in the common parlance unless by production or manufacture something new and different is brought out which can be bought and sold. In Union of India & Anr. vs. Delhi Cloth & General Mill Co. Ltd., AIR 1963 SC 791, a Constitution Bench of this Court while construing the word 'goods' held as under:- "These definitions make it clear that to become "goods" an article must be something which can ordinarliy come to the market to be bought and sold". Therefore, any good to attract excise duty must satisfy the test of marketability. The tariff schedule by placing the goods in specific and general category does not alter the basic character of leviability. The duty is attracted not because an article is covered in any of the items or it falls in residuary category but it must further have been produced or manufactured and it is capable of being bought and sold.In South Bihar Sugar Mills Ltd. & Anr. etc. v. Union of India ....
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....ediately flowing from this dimension is that disputes may arise as to the exact entry of the Tariff Act in which particular goods fall. Both the issues have a direct connection with the rate of duty. This is one interpretation of the word "excisability". The other way to look at the word "excisability" is the inquiry as to whether the goods are excisable goods, meaning thereby, they fall in the Tariff Act and, further, even finding out the exact entry in which the goods fall, and the same would only be one of the questions to be answered before the levy actually can be successfully imposed and collected. It is settled law that the mere mention of the goods in one of the entries would not render the goods exigible to excise duty. There is a whole gamut of issues, which must be posed and considered before that stage is reached. To begin with, excise duty is traceable to Entry 84 of List I of the Seventh Schedule to the Constitution. The same reads as follows: "84. Duties of excise on tobacco and other goods manufactured or produced in India except - (a) alcoholic liquors for human consumption. (b) opium, Indian hemp and other narcotic drugs and narcotics, ....
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....act, marketed is of no relevance. So long the goods arc marketable, they are goods for the purpose of Section 3 of the Central Excise Act. It is not necessary that the goods should be generally available in the market. Even if the goods are available from only one source or from a specified market, it makes no difference so long as they are available for purchasers. The marketability of articles does not depend upon the number of purchasers nor is the market confined to the territorial limits of this country. To become 'goods' an article must be something which can ordinarily come to the market to be bought and sold. 'Marketability' is a decisive test for dutiability. It only means 'saleable', or "suitable for sale". It need not be in fact 'marketed'. The article should be capable of being sold or being sold, to consumers in the market, as it is - without anything more. An article does not become goods in common parlance unless by production or manufacture something new and different is brought out which can be bought and sold. to become 'goods' an article must be something which can ordinarily come to the market to be bought and sold. Therefore, any goods to attr....
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....n having a relation with the rate of duty". Therefore, now the Apex Court is, after the amendment, the exclusive appellate forum created against the order passed by the Tribunal to deal with all these issues when they are raised and decided by the Tribunal. As far as exempted goods are concerned, we must notice that exempted goods do not become non- excisable by issuance of a notification or order under Section 5A of the Central Excise Act. The goods would remain excisable. See in this regard, the judgment of the Apex Court in Wallace Flour Mills Co. Ltd. vs. Collector of Central Excise, Bombay, reported in (1989) 4 SCC 592. Paragraph 2 of the said judgment reads as follows: "2. The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., falling under Heading No. 1902.10 of the Central Excise Tariff Act. The appellant filed classification list effective from 1st March, 1987 claiming that their pre-budget stocks of non- excisable goods, namely, various types of food products declared in the classification list as aforesaid were entitled to duty free clearance being pre-budget stocks. The Assistant Collector of Central E....
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....ostponed for administrative convenience to the date of removal of goods from the factory. Rule 9A of the said rules merely does that. That is the scheme of the Act. It does not, in our opinion, make removal be the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under rule 9A of the said Rules. In this connection, reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory v. Supdt. of Central Excise, [1986] 23 ELT 3 13, where it was decided that the words 'as being subject to a duty of excise' appearing in s. 2(d) of the Act are only descriptive of the goods and not to the actual levy. 'Excisable goods", it was held, do not become non-excisable goods merely by the reason of the exemption given under a notification.... .....We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article, the duty can be levied and collected at a later date for administrative convenience." 58. We may notice in fact that in Collector of Central Excise, Hyderabad & others vs. Vazir Sultan Tobacco Company Limited & others, r....
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....l, i.e. fifteen per cent. Para 4 clearly brings out the ratio of the said decision." 60. Section 5A is the provision under which exemption is granted. It may be granted by a notification or it may be granted by an order passed by the Central Government. It may provide for absolute exemption or the exemption may be partial. An exemption may be an absolute exemption, as the exemption notification in this case, insofar as the notification provides for complete exemption in respect of the duty payable under Section 3. It is also a case, where complete exemption is provided from payment of the additional duty under the two Acts mentioned in the notification, the details of which we are not to be detained with under the facts of this case. There are exemption notifications, which, instead of providing a complete exemption, use the word "nil rate of duty". In regard to an exemption notification, the first question would be whether the goods, which are produced by an assessee, are covered by the list of exempted goods mentioned in the notification or the order. We may usefully remind ourselves of clause (c) of the explanation to erstwhile Section 35E of the Central Excise Act, which rea....
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....rily go to the Central Excise Tariff Act, 1985 (hereinafter referred to as the "Tariff Act"). 64. Clauses (a) & (b) of Section 3(1) of the Excise Act read as follows: "3. Duties specified in the Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied.- (1) There shall be levied and collected in such manner as may be prescribed, - (a) a duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods excluding goods produced or manufactured in special economic zones which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty to excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zones) specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule." 65. We are not concerned with the other provisions of Section 3. Section 3 clearly is the charging provision. It purports....
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....a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (3) For the removal of doubts, it is hereby declared that any notification issued under subsection (1), including any such notification approved or modified under sub-section (2), may be rescinded by the Central Government at any time by notification in the Official Gazette." 66. Thus, the Tariff Act contemplates nil rate of duty as the rate of duty. The rate fixed can be increased in an emergency by the Central Government by notifying the same; but subject to the limitations as provided therein. Section 5 of the Tariff Act reads as follows: "5. Power of Central Government to amend First and Second Schedules. - (1) Where the Central Government is satisfied that it is necessary so to do in the public interest, it may, by notification in the....
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....for small scale units and it was limited in point of the quantum of clearance. The Annexure containing the list of exempted goods, we may notice, includes all goods falling under Chapters 2, 3 & 4 of Section (i), inter alia, even though the rate of duty of excise therein is shown as nil. No doubt, the notification gives an option to the manufacturer not to avail the exemption, in which case, he is obliged to exercise the option before effecting the first clearance. Another condition mentioned in the said exemption notification is that the manufacturer could not avail CENVAT credit on inputs, subject no doubt to the proviso in the said clause. It may also be noticed that sub-section (1A) has been inserted in Section 5A of the Excise Act, which deals with the power of exemption. Section 5A reads as follows: "Section 5A. Power to grant exemption from duty of excise. - (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable g....
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....s in the manner provided in this sub-section shall have effect subject to the condition that the duty of excise chargeable on such goods shall in no case exceed the statutory duty. Explanation. - "Form or method", in relation to a rate of duty of excise means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable. (4) Every notification issued under sub-rule (1), and every order made under sub-rule (2) of rule 8 of the Central Excise Rules, 1944, and in force immediately before the commencement of the Customs and Central Excises Laws (Amendment) Act, 1987 shall be deemed to have been issued or made under the provisions of this section and shall continue to have the same force and effect after such commencement until it is amended, varied, rescinded or superseded under the provisions of this section. (5) Every notification issued under sub-section (1) or sub-section 2(A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette." 68. Sub-section (1A) came into force w.e.f. 13.05.2005. We may notice ....
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....rstood in the context as meaning not only a situation, where the goods in question are excisable goods as defined in Section 2(d) of the Excise Act, but also they answer the description of the goods as understood in law and a long line of decisions. This means that the products in question must be goods as understood in law being movable and marketable. It must have an identity in the market as a distinct new product. It must possess the attribute of marketability, which means it is capable of being bought and sold. This is besides also fulfilling the requirement that the goods must be manufactured or produced and, further, that the manufacture or production of the goods must be in India. It is when all these questions are answered in a case, where they are raised, that even if the goods are excisable goods, they become excisable. 72. It is a principle of interpretation that when the words have acquired a legal meaning or, rather, they have been interpreted by courts and they are used by the Legislature, it must be taken that the words are meant to be understood in the legal sense. In our search for authority as to whether courts have employed the word "excisability", we found t....
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.... we would proceed on the basis that when the Tribunal answers a question relating to excisability, it is equivalent to saying that it finds that the goods are dutiable and can be visited with the levy of excise duty. 75. What then are we to make out of the employment of the word "taxability" separated by the word "or"? Was it intended to convey that taxability is something different from excisability? Is it capable of bearing the meaning that the Legislature intended that when, after it is found to be excisable in a situation where the assessee presses an exemption notification or order before the authority, it could be said that because there is an absolute exemption for instance he is shielded from the levy of excise duty and, therefore, in such a situation, it could be said that relates to taxability. Or, would it not be more appropriate in the context to find that there is no difference between "excisability" and "taxability" as both excisability and taxability refers to the situation, where the conditions are fulfilled for visiting the assessee with the levy. Exemption is granted only of goods, which are excisable. In fact, we have noticed the judgments, which indicate that....
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....gn". It is true the word "subscribe" is not defined but it is equally clear, when the Act is read as a whole along with the form in the second schedule, that "subscribe" can only be used in the sense of making a signature and as the Act tells us quite clearly how the different types of "signature" are to be made, we are bound to give effect to it. Xxx (Emphasis supplied). 19. For this reason also we agree with the finding of the High Court that the expression "subscribe" in the proviso cannot be read differently from the expression 'sign' used in S.33. Therefore, this contention of the petitioner is also rejected. For the reasons stated above, the appeal is dismissed with costs." 78. After answering the issue against the assessee, necessarily, various questions would arise in regard to whether the assessee fulfills the conditions mentioned in the notification to claim benefit of exemption. An exemption notification is to be construed strictly. Undoubtedly, when it is an implementing notification, the court will treat it as an exception to the general rule of strict interpretation to be accorded to an exemption notification and a beneficial construction would undoubte....