TaxTMI 
TaxTMI 
2025 (5) TMI 50
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..... The facts of the case are that the appellant manufactures and clears aerated waters. Vide the Union Budget, 2014-15 presented on 10.07.2014 a levy of Additional Duty of Excise (AED for short) @ 5% was imposed on aerated waters containing added sugar or other sweetening matter or flavor falling classifiable under Chapter 220210 of Central Excise Tariff Act, 1985. A new entry under the 7th Schedule was therefore introduced vide Clause 110(b) of the of the Finance (No.2) Bill, 2014 [corresponding with Section 118 of the Finance (No.2) Act, 2014]. The said entry is reproduced hereunder:- "110. In the Finance Act, 2005. - (a) in section 85, in the marginal heading, for the brackets and words "(pan masala and certain tobacco p....
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....15 to the appellant seeking recovery of AED for an amount of Rs.17,57,260/- along with interest and penalty on such pre-budget stock as in existence at the time of introduction of the levy. The appellant contends as per settled law, AED being a new levy, they could not be called upon to pay AED on such stocks as were in existence prior to the introduction of the same. In support, he has referred to the case of CCE, Hyderabad v. Vazir Sultan Company Limited [1996 (83) E.L.T. 3 (S.C.)] in particular and argued that the law was very clear on the subject and there was thus no case to demand AED on he said pre-budget stock. 4. The Ld.AR reiterates the findings of the lower authority. 5. We have heard the two sides and perused the records. ....
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.... an ordinary rule. But insofar as the goods manufactured or produced prior to March 1, 1978 are concerned, the said rule cannot apply for the reason that there was no levy of special excise duty on such goods at the stage and at the time of their manufacture/production. The removal of goods is not the taxable event. Taxable event is the manufacture or production of goods." 7. In fact the Hon'ble Apex Court, as regards imposition of fresh levy, in the said case had categorically observed as under: "5. ..................... Once the levy is not there at the time when the goods are manufactured or produced in India, it cannot be levied at the stage of removal of the said goods. The idea of collection at the stage of removal is devi....
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....also refers to the Hon'ble Gujarat High Court's decision in the case of Anand Regional Co-Op. Oil Seeds Growers Union Ltd. vs. Union of India [2016 (342) E.L.T. 379 (Guj.)], in support of the department's stance. 11. We are afraid that the said two orders referred to by the Ld.AR for the department, are not in the context of liability to duty of finished goods when a fresh levy is imposed on stocks as have come into existence, prior to introduction of the said levy. Moreover, we note that the department is bound by its internal instructions and circulars as were issued by the Board and cannot decide a case contrary thereto. They are even prevented from pleading to the contrary to make out a case in contradiction of the said directives. ....