TMI Blog2001 (11) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... t the date of removal from the factory gate is not relevant for considering the levy of duty but it is the date on which the goods have come into existence by manufacture and stored in the bonded store room. It is contended that the date on which the goods were manufactured and stored in the bonded store room, the notification was still in existence and therefore, that date is required to be considered for grant of benefit of the notification notwithstanding the fact that on the date of clearance of the goods from the factory gate the notification had been withdrawn. It is contended that the Wallace Flour Mills Co. Ltd. had laid down this proposition and that the ld. Commissioner had misread the same. It is further contended that the matter was taken up by the Apex Court again by a 3-Member Bench judgment in the case of CCE Hyderabad v. Vazir Sultan Tobacoo Co. Ltd. [1996 (83) E.L.T. 3 (S.C.)] wherein the proposition now stated by the assessee has been upheld. It has been clearly laid down that the dutiability of goods will be the date on which the goods were manufactured and produced in India and it cannot be levied at the stage of removal of the said goods. It has been further cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods which had been manufactured and stored for removal. To that extent the goods which had been already manufactured will be eligible for benefit notwithstanding the date on which it was removed when there was no exemption. Hence, appellants are entitled for benefit of the Notification and their refund claim is required to be accepted. The appeal is allowed subject to the scrutiny of the provisions of unjust enrichment in terms of Apex Court judgment rendered in the case of Mafatlal Industries Ltd. [1997 (89) E.L.T. 247]. Sd/-(S.L. Peeran)Member (J) 6. [Contra per : Jeet Ram Kait, Member (T) (Oral)]. - I am not able to persuade myself to agree with the order proposed by learned Brother S.L. Peeran, Member (J) for the reasons recorded in the succeeding paragraphs. 7. The judgment rendered by the Tribunal in the case of Wallace Flour Mills Co. Ltd. v. CCE, reported in 1989 (43) E.L.T. 584 (T) has been correctly applied by the Commissioner (Appeals) in his order-in-appeal No. 859 and 372(H) C.E., dated 17-9-96 by which he has rejected the refund claim of the assessee on the ground that on the date of the clearance of the goods from the factory gate, the benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcisable to duty @ 15% ad valorem and it was in the above circumstances, the Court held that on the basis of Section 3 and Rule 9A of the CE Rules, 1944, though the goods were produced or manufactured prior to 1st March 1987 still they attracted duty at the rate prevailing on the date of their removal. In other words, the Hon ble Supreme Court in the said judgment has confirmed the decision in the case of Wallace Flour Mills Co. by their decision in the case of CCE v. Vazir Sultan Tobacco Co. Ltd. (supra) by distinguishing the facts of the case. 8. The facts in the present case are similar to the facts in the case of Wallace Flour Mills Co. Ltd. (supra) inasmuch as the refund claim of the assessee was rejected on the ground that on the date of clearance of the goods from the factory, the benefit of Notification No. 52/86, dated 10-2-86 had already been withdrawn. Therefore, they were not eligible for refund on the goods which were cleared on payment of duty after withdrawal of the said Notification No. 52/86. The Commissioner (Appeals) Hyderabad in Para 5 of his decision has relied upon the decision in the case of Wallace Flour Mills Co. Ltd. v. CCE (supra) which was also confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, since duty of excise was a levy on manufacture, the goods so manufactured were exempted from payment of duty of excise in terms of Exemption Notification No. 52/86-C.E. This contention was rejected by both the lower authorities and accordingly the refund claims were rejected. The party preferred appeals to the Tribunal. After hearing both sides, learned Member (J) and learned Member (T) recorded separate orders, the former allowing the appeals and the latter rejecting them. 12. I have examined the records and heard both sides. I have also perused the orders recorded by learned Brothers. 13. Shri K.R. Natarajan, ld. Counsel for the appellants has reiterated all the contentions he had raised before the Bench earlier. He has strongly relied on the decision of the Tribunal in the case of C.J. Industries v. CCE reported in 1989 (44) E.L.T. 347 (Tribunal), the facts of which case are, according to him, similar to those of the instant case. Learned Counsel further points out that the department s appeal against the Tribunal s decision in C.J. Industries (supra) was dismissed by the Hon ble Supreme Court vide 1991 (53) E.L.T. A-30. Therefore, the learned Counsel submits, the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, prays for dismissing the appeals. 15. I have considered the rival submissions. The facts briefly set out in the earlier part of this order are not contested. The goods in question were chargeable to nil rate of duty prior to 1-3-92 in terms of Notification No. 52/86-C.E. With effect from 1-3-92, the goods were taken away from the purview of that Exemption Notification by Notification No. 31/92-C.E., dated 1-3-92. The clearances in question were made after 1-3-92 when, admittedly, there was no exemption in respect of the goods which were chargeable to duty @ 15% ad valorem. It is, however, not disputed that the goods cleared on/after 1-3-92 had been manufactured prior to 1-3-92. It is also not in dispute that, prior to 1-3-92, the goods were chargeable to nil rate of duty in terms of Notification No. 52/86-C.E. The issue in this case is whether the goods manufactured prior to 1-3-92 and chargeable to nil rate of duty in terms of Notification No. 52/86-C.E. were to be charged to duty of excise at Tariff rate at the time of removal after 1-3-92 on account of the withdrawal of exemption by Budget Notification No. 31/92-C.E. On this issue, while learned Counsel has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter were still eligible for the benefit of exemption, since the taxable event is manufacture and not removal from factory. At the time of manufacture, the goods were exempted (chargeable to nil rate of duty). Collection of duty at the later stage of removal was only a matter of administrative convenience as envisaged in the Central Excise Rules. It has been held to this effect by the Apex Court in the case of Vazir Sultan (supra). In Vazir Sultan case, the issue related to Special Excise Duty. That duty was also held to be a duty of excise and further it was held that, once levy was not there at the time when the goods were manufactured, it could not be levied at the stage of removal of the goods. The ruling of the Hon ble Supreme Court is quite clear and the same is applicable to any duty of excise. Applying that ruling of the Supreme Court, it has to be held, in the instant case, that the duty paid by the appellants on the goods manufactured prior to 1-3-92 and cleared after that date was erroneously paid by them and hence that duty is liable to be refunded. Both the lower authorities erred in rejecting the refund claims. I, therefore, fully concur with learned Member (J) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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