9911796707
TMI Blog1990 (6) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... brief, was whether goods manufactured prior to the levy of Special Excise Duty ('SED') by the Finance Bill, 1988 but cleared after the date of Imposition of the said levy would attract the levy. The issue was answered in the affirmative by the Tribunal mainly relying on the Supreme Court's judgment in the case of Wallace Flour Mills Company Ltd. v. Collector of Central Excise -1989 (44) E.L.T. 598. It was held by the Tribunal that collection of SED on goods which had been fully manufactured prior to the introduction of the Finance Bill, 1988 (29-2-1988) but cleared on or after 1-3-1988 was valid and in accordance with law. 2. We have heard Shri L. Narasimha Murthy, DR, for the appellant-Collector, Shri N.V. Raghavan Iyer, Adviser, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -3-1986 and cleared during March 1988 were exempted from the SED of 3987 by virtue of Notification No. 91/87 dated 1-3-1987 and 137/87 dated 12-5-1987: They were governed by the Special Excise Duty imposed in the 1987 Finance Bill but, in fact, they stood exempted by virtue of the said notifications. The 1988 levy of SED was not retrospective in character. 5. Shri Iyer further submitted that assuming that there was a continuity in the levy of SED, the declaration under the Provisional Collection of Taxes Act, 1931,would only serve to authorise levy on and from the midnight of the date of introduction of the, Finance Bill, that is to say, with immediate effect but not with retrospective, effect. It, could thus be seen that, in point of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions made by Shri Raghavan Iyer. In addition, he submitted that Section 3 of the Central Excises and Salt Act and Central Excise Rule.9A must be harmoniously construed. While Section 3 authorised the levy of excise duty, Rule 9A laid down the time and manner of its collection. Similarly, clause 82(1) of the 1988 Finance Bill authorised the levy and collection of special excise duty, This showed that this levy was a new levy. Therefore, Rule 9A could hot be invoked in relation to goods manufactured at a time when there was no levy. There should be some nexus between manufacture and collection. The levy must be in force at the time of manufacture if duty is to be collected at the time of clearance. - In this context, he referred to the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty imposed for the first time by the 1988 Finance Bill. It was already in existence in 1987 having been introduced by the 1987 Finance Bill though all goods were actually exempted from the levy by an exemption notification. The fact of exemption, however, does not, as it were wipe out the fact that special excise duty was in force as a result of the 1987 Finance Bill. The thrust of Shri Iyre's argument, however, is that the levy of special excise duly is not, unlike the levy of basic excise duty (this term is used to denote the levy of excise duty in accordance with the First Schedule to the Central Excises and Salt Act, 1944, or, as the case may he, the Schedule to the Central Excise Tariff Act, 1985), a continuing or permanent levy, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the Provisional Collection of Taxes Act. Since the SED of 1988 was no different from the SED of 1987, as noted by us earlier, the SED of 1988 was attracted on the clearance of these goods on and from 1-3-1986 by operation of Central Excise Rule 9A. In our view, there is no question here of any retrospective application of the 1988 levy of SED. In this view of the matter, we are of the opinion that there is no disharmony between the operation of clause 82(l) of the 1988 Finance Bill and Central Excise Rule 9A as urged by Shri Ignatius. Nor, in our opinion, is there any lack of nexus between manufacture and collection. This is because goods were manufactured when special excise duty was in force and were cleared when special excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was rightly leviable. Of course, the Supreme Court considered certain judgments of the Madras and the Karnataka High Courts on the interpreation of Section 2(d) of the Central Excises and Salt Act defining "excisable goods". But the principle of the judgment was that though the goods in question were manufactured during the period when they did not attract excise duty because of the nil duty entry in the tariff schedule, they attracted duty when they were cleared after the nil rate was substituted by 15% ad valorem rate. In the present case, it is not as though no special excise duty was in force when the goods were manufactured (although Shri Iyer and Shri Ignatius have contended that the 1988 levy of SED was not in force) but, as we have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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