2015 (6) TMI 507 - AT - Central Excise

Effective date of enhancement of duty - Whether the excise duty levied on cigarettes at higher specific rates by virtue of the Government amendments to the Finance Bill 2012 would be applicable w.e.f. 17.03.2012 immediately on the expiry of the day on which the Finance Bill 2012 was introduced or w.e.f. 28.05.2012 when the Finance Bill 2012 received the assent of the President - Held that - excise duty as provided through said Bill will have the force of law from the date on which the Finance Bill was introduced i.e. 17.03.2012. Since the amendments proposed to the Finance Bill were in the form of official amendments and no separate Bill was required for the said purpose no declaration under the PCT Act is permissible. However in view of the provisions of section 4(2)(a) of the PCT Act the declaration made ceases to have force of law once the enactment comes into operation. - as the amendments were proposed to the Finance Bill 2012 only on 08.05.2012 and assented by the President on 28.05.2012 the same will have its applicability only from the date of assent by the President. Thus insofar as the levy of excise duty on cigarette at enhanced rates as contemplated in the amendments moved on 08.05.2012 is concerned the amended provisions will have effect only from the date of assent of President i.e. from 28.05.2012. - Decided in favour of assessee.

Summary

Issues involved:
1. Applicability of enhanced excise duty rates on cigarettes from the date of introduction of the Bills or from the date of assent by the President.

Analysis:

Issue 1: Applicability of enhanced excise duty rates
The case involved a dispute regarding the effective date for the levy of excise duty on cigarettes at enhanced rates as per the Finance Act, 2012. The appellant, a cigarette manufacturer, contested the imposition of enhanced excise duty rates from the date of introduction of the Bills, whereas certain amendments were made later, affecting the duty rates further. The central issue was whether the enhanced rates should be applicable from the date of introduction of the Bills or from the date of assent by the President.

The Board clarified the issue through Circular No. 981/5/2014-CX, stating that the excise duty rates on cigarettes, as proposed in the Finance Bill, came into effect immediately upon the introduction of the Bill under the Provisional Collection of Taxes Act, 1931. Subsequent amendments to the Finance Bill, resulting in higher specific rates, were to be effective from the date of assent by the President, not from the date of introduction of the Bills. The Ministry of Law & Justice confirmed that a declaration under the PCT Act has the force of law from the date of introduction of the Bill but ceases to have effect once the enactment is operational. Therefore, the enhanced excise duty rates, introduced through amendments on 08.05.2012 and assented by the President on 28.05.2012, were applicable from the latter date.

The Tribunal, considering the circular and legal opinions, ruled in favor of the appellant, as the dispute was squarely covered by the Board's circular. Consequently, both appeals were allowed, and the demand for enhanced excise duty was deemed no longer valid based on the clarified effective date provided by the circular.

In conclusion, the judgment resolved the issue by determining the correct effective date for the levy of enhanced excise duty rates on cigarettes, as per the provisions of the Finance Act, 2012, and the subsequent amendments, in alignment with the Circular issued by the Board and legal interpretations provided by the Ministry of Law & Justice.