1990 (6) TMI 145 - AT - Central Excise

Summary

Issues:
- Whether goods manufactured prior to the levy of Special Excise Duty but cleared after the imposition of the levy would attract the levy.
- Interpretation of the Finance Minister's speech regarding the imposition of Special Excise Duty.
- Application of Central Excise Rule 9A in relation to goods manufactured before the imposition of the levy but cleared thereafter.

Analysis:
1. The Tribunal previously held that goods fully manufactured before the introduction of Special Excise Duty (SED) but cleared after the levy would attract the duty, relying on the Supreme Court's judgment in Wallace Flour Mills case.

2. The representatives for the parties presented their arguments, with the Department supporting the collection of SED and the respondents challenging the imposition based on the Finance Minister's speech and interpretations of the levy.

3. The Adviser contended that the 1988 SED was a new levy and not retrospective, citing exemption notifications from 1987. He argued that goods exempted under the 1987 levy should not be charged under the 1988 levy when cleared after the imposition.

4. The Madras Rubber Factory representative echoed similar arguments, emphasizing the need for a nexus between manufacture and collection, referring to past judgments and the harmonious construction of relevant laws.

5. The Tribunal considered the submissions and discussed the differing perceptions on the levy but ultimately found that the 1988 SED was not a new levy distinct from the 1987 levy. They concluded that the SED was correctly charged on goods cleared after the imposition, as there was no retrospective application.

6. Referring to the Wallace Flour Mills case, the Tribunal highlighted the distinction between nil duty rates and subsequent levies, affirming that the SED was correctly charged on goods cleared after the imposition of the 1988 Finance Bill.

7. The Tribunal upheld its previous decisions and set aside the impugned orders, allowing the appeals based on the application of Central Excise Rule 9A and the continuity of the SED levy from 1987 to 1988.

Overall, the Tribunal found that the imposition of Special Excise Duty on goods cleared after the levy, even if manufactured before the levy, was valid and in accordance with law. The Tribunal emphasized the continuity of the levy from 1987 to 1988 and rejected the argument that the 1988 levy was a new imposition, ultimately allowing the appeals based on past decisions and legal interpretations.