TMI Blog1987 (5) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Board as per a contract entered into between the two parties. The goods manufactured were to the specification of the Electricity Board. The contract stipulates that 1% of the Poles manufactured for supply would be tested by the technicians of the Electricity Board in the appellants factory. A certain quantity of poles were tested by the appellants and they applied for destruction of the broken poles to the Excise authorities. The authorities, however, raised a demand of duty in respect of these poles as there was no exemption available for the poles drawn as samples for test. The Assistant Collector confirmed the demand. The Collector (Appeals) partially allowed the appeal and restricted the demand only in respect of the poles drawn fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted in the contract for sale itself. In the circumstances, the appellant is also not liable to any penalty. Accordingly appeals are allowed. The appellants in their appeal before us have asked for the total remission of duty in respect of the poles drawn for test and for which the duty has been demanded. The Revenue however have stated in their cross-objection that there is no warrant in law to allow any remission of duty in respect of the poles drawn for test. 3. The learned Consultant for the appellants, Shri D.N. Kohli, stated that before the goods are charged to duty, the conditions precedent for the purpose of levy as set out under Rule 9 and 49 should be satisfied. He pleaded that the goods could be charged to duty only when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aras 6 and 7 of the Collector s Cross-Objection. He pleaded that the Department had not given any permission to the appellants for drawing samples for testing as seen from the price list approved. He pleaded that the remission of duty can-only be allowed in the contingencies as provided for under the law under Rule 49. He pointed out that the rules permitted remission only in case the goods were lost or destroyed by natural causes or by unavoidable accident during handling or storage. 5. The short point for consideration is whether the duty liability is required to be discharged in respect of goods drawn for test within the factory, when there is no specific notification issued in this regard. 6. It would be relevant to advert to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 9. Time and manner of payment of duty - (1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf whether for consumption, export or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form : Provided that such goods may be deposited without payment of duty in a store-room or other place of storage approved by the Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption or for marketing subject to such condition as may be imposed by the Collector by order in writing ...." From the reading of above Sections and rules, it is clear that as soon as the goods are manufactured, a charge is created on the goods. Collection of duty is, however, postponed and these are allowed to be kept in terms of Rule 47 without payment of duty in a store-room or other place of storage. These goods cannot be removed from the place of storage in terms of Rule 9 for clearance outside the factory including for consumption or manufacture of any other commodity in or outside the approved premises of manufacture or production without payment of duty. The duty is required to be paid as soon as these are issued out from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 9 of Central Excise Rules puts a bat on the removal of excisable goods from the place where the same are produced or manufactured unless duty is paid. The rule by itself does not create a liability, nor can it be read as destroying a liability which is incurred under Section 3 because of manufacture or production of goods. A rule which is framed to carry out the purpose of an Act cannot be read or go to the extent of frustrating its purpose instead of giving effect to it. (Emphasis added) It has not been pleaded that the goods have been lost or destroyed by natural causes or due to unavoidable accident as provided for under Rule 49 to be eligible for remission. There is also no plea before me that goods were unfit for consumption or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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