TaxTMI 
TaxTMI 
1997 (1) TMI 77
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....t March, 1988, of goods which had been manufactured prior to that date was valid. 2.Special excise duty is levied under the provisions of the Finance Acts. There is no levy for a long period of time of special excise duty until it was levied with effect from 1st March, 1978, under the provisions of Section 37 of the Finance Act, 1978, which read thus : In the case of goods chargeable with duty of excise under" the Central Excise Act as amended from time to time, read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable there shall be levied and collected a special duty of excise equal to five per cent of the amount so chargeable on such goods. Sub-section (1) shall cease....
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....n "excisable goods" - and not "goods" - and for good reason. The expression "excisable goods" has been defined in clause (d) of Section 2 to mean "goods specified in the First Schedule as being subject to a duty of excise and includes salt." The goods removed must be excisable goods first - which means that the goods were subject to the levy of duty before their removal. Rule 9A is to the same effect. Sub-rules (1) to (3A) of Rule 9A may be set out in their entirety in view of the reliance placed by both the counsel upon them. They read : The rate of duty and tariff valuation, if any, applicable to"(1) any excisable goods shall be the rate and valuation in force. in the case of goods removed from the premises of a curer on(i) payment of d....
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....rate of duty (apart from tariff valuation) applicable to any "excisable goods" shall be the rate in force on the date of actual removal of such goods from the factory or the warehouse, as the case may be. This is the general rule. Sub-rules (2), (3) and (3A) provide certain exceptional situations which are not relevant for the purpose of these appeals. It is the general rule contained in sub-rule (1) - and in particular clause (ii) of sub-rule (i) - that is relevant here. In other words, the rate of duty as well as the valuation of goods shall be the rate and the valuation as on the date of actual "removal". This rule too opens with the expression "excisable goods". Sri Vellapally contended that if the above interpretation is10. adopted, i....
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....8 when it was revived by the Finance Act, 1978. Thereafter, it was being levied from year to year by annual Finance Acts. The provisions of these Finance Acts, insofar as the levy of special excise duty is concerned, are identical. In the Finance Acts of 1987 and 1988, however, the rate of special excise duty was raised to ten per cent but then notifications were issued exempting the duty on all goods in toto. In other words, with effect from March 1, 1986, there was, in effect, no special excise duty until February 28, 1988. With effect from March 1, 1988, the duty was again imposed @ 5%, while exempting certain essential commodities and other priority items from the said impost. We have held hereinabove that the goods manufactured/produce....
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.... excise duty is so levied as to cease to have effect at the close of the financial year. It is an annual levy. It may or may not be levied in the following year. 7.As we understand the judgment in the case of Vazir Sultan Tobacco Co. Ltd., this is the view taken : The date of manufacture is the date upon which the levy attaches to the goods; the date of payment is deferred to the date of clearance, the rate being the rate which is effective on the date of clearance. Where goods have been manufactured while the levy of special excise duty is operative and have not been cleared until the last date of that levy, the goods must be deemed to have been removed on that last date. 8.In the instant case, therefore, the said goods must be deemed to....