TMI Blog2012 (6) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... etable Oil and Food Company Ltd., under the brand name of Dhara . Prior to 1st March 2003, refined edible oils falling under the Central Excise Tariff heading 15.02 and 15.03 were chargeable to nil rate of duty under the Tariff Act. With effect from 1st March 2003, by the Finance Act, 2003, the Central Government imposed duty of 8% advalorem in respect of the goods falling under Chapter heading 15.02 and 15.03. In exercise of powers under subsection (1) of section 5A of the Central Excise Act, 1944 (hereinafter referred to as the Act ) the Central Government also granted exemption to all goods (other than refined edible oils, bearing a brand name and put up in unit containers for retail sale) falling under chapter headings 15.02 or 15.03 from levy of central excise duty. Thus, as they were not included under the exemption notification, by virtue of the provisions of the Finance Act, 2003 with effect from 1st March 2003, refined edible oils bearing brand name or put up in unit containers for retail sale falling under chapter heading 15.02 or 15.03 became exigible to central excise duty at the rate of 8%,. 3. It is the case of the petitioner that prior to 1.3.2003, that is, as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r treatment to render the product marketable to the consumers shall amount to manufacture. Therefore any packing done prior to 1.3.2003 did not amount to manufacture and consequently was not subject to duty of central excise, even if the packed oil was removed after 1.3.2003. It was submitted that though edible oil was made chargeable to central excise duty at the rate of 8%, the same continued to be exempted by notification No.6/03CE if the same was in loose condition. Therefore, the edible oil in loose condition would continue to remain edible oil even if it was packed since prior to 1.3.2002, packing did not amount to manufacture. It was submitted that but for the deeming fiction which was created vide Finance Act, 2003 the packing of such oil would not be a taxable event for the purpose of duty of central excise and as such, in terms of the decision of the Supreme Court in the case of Collector of C.Ex., Hyderabad v. Vazir Sultan Tobacco Co. Ltd. 1996(83) E.L.T. 3 (S.C.) when there was no taxable event prior to 1.3.03 in respect of packed oils, duty could not have been recovered on removal of the same after 1.3.03. It was, accordingly, submitted that the impugned orders passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early mentions that the petitioner had cleared the product bearing brand name of 'Arcogul' and Dhara after 1.3.03 and had also passed on the duty element to various customers. It was submitted that the petitioner in its reply to the said show cause notice has not made any averment to the effect that the duty has not been passed on to the customers. Under the circumstances, even otherwise, since the duty has already been passed on to the customers, the petitioner is not entitled to refund of the amount claimed as the same would amount to unjust enrichment. 6. In the backdrop of the aforesaid facts and contentions, the core issue that arises for consideration is as to whether in view of the provisions of the Finance Act, 2003 refined edible oils in packed form manufactured prior to 1st March 2003 are exigible to excise duty at the rate of 8%. 7. By virtue of the Tenth Schedule to the Finance Act, 2003, the following came to be inserted in the First Schedule to the Central Excise Tariff Act: ( 2) in Chapter 15, - (i) after Note 3, the following NOTE shall be inserted, namely :- 4. In relation to the products of sub-heading Nos. 1502.00, 1503.00, 1504.00 and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rule 9A of the Rules, the Excise Authorities are within their competence to apply the rates prevalent on the date of removal. 9. Examining the facts of the present case in light of the principles propounded in Wallace Flour Mills Co. Ltd. (supra), on the date of manufacture of the goods in question, the same were chargeable to nil rate of duty. However, subsequently, with effect from 1st March 2003, the same came to be chargeable to excise duty at the rate of 8%. Under the circumstances, the payment of duty being relatable to the date of removal of the article from the factory, the goods in question would be chargeable to central excise duty at the rate prevalent on the date of removal. 10. The Commissioner (Appeals) in the impugned order has held thus: It is an admitted fact that prior to 1303, refined oil in any form (packed or loose) was specified goods under Ch.1503 of Central Excise Tariff Act, 1985 and Tariff rate was Nil. As per the provisions of Sec.2 (d) of Central Excise Tariff Act, 1985, the goods specified in the Tariff would be regarded as excisable. Merely, because the tariff rate was nil, it does not make goods as nonexcisable, since nil rate of duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment would not be attracted in the present case as the refund would not be governed by the provisions of section 11B of the Central Excise Act, 1944. 12. A feeble attempt had been made by the learned advocate for the petitioner to contend that since labelling or relabelling of containers and repacking from bulk packs to retail packs came to be brought within the ambit of manufacture only with effect from 1st March 2003, the goods in question could not have been subjected to levy of central excise prior to 1st March 2003. The aforesaid contention is required to be stated to be rejected inasmuch edible oil falling under subheading Nos.15.02 and 15.03 of Chapter 15 of the Tariff Act was chargeable to Central Excise duty even prior to insertion of Note No.4 in Chapter 15 of the Central Excise Tariff Act , though at nil rate. With effect from 1st March 2003, edible oil falling in subheading Nos. 15.02 and/or 15.03 was chargeable to duty at the rate of 8%. The contention that the taxing event, viz. manufacturing took place only with effect from 1st March 2003, thereby not attracting the charge of Central Excise duty at the rate of 8%, therefore, does not merit acceptance inasmuch as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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