TMI Blog2018 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... file an undertaking - In the present case, there is no such undertaking filed by the appellant. Even if we consider that there has been procedural infraction on the part of the appellant in not taking permission from the Commissioner to clear the goods on Budget day, the notification rescinding the exemption has come into force only from 1.3.2002. Their clearances have been made on 28.2.2002 when the exemption notification was still in force - duty demand do not sustain. The Tribunal in the case of Vellamalai Tea Factory [2013 (12) TMI 394 - CESTAT CHENNAI] has considered an identical issue with regard to Budget day clearances and Tribunal after taking cognizance of Sections 3 and 4 of Provisional Collection of Taxes Act, 1931, held that duty cannot be collected for the clearances made by the appellant before midnight when the notification came into existence (1.3.2002). Appeal allowed - decided in favor of appellant. - Appeal Nos. E/81 & 82/2009 - Final Order Nos. 41632-41633 / 2018 - Dated:- 23-5-2018 - Hon ble Ms. Sulekha Beevi C.S., Member ( Judicial ) And Hon ble Shri Madhu Mohan Damodhar, Member ( Technical ) Shri J. Shankar Raman and Shri B. Satish Sundar, Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3.2002. Thus, the exemption was withdrawn only with effect from 1.3.2002. The show cause notice has been issued on a wrong presumption that the exemption was withdrawn from 11:00 a.m. on 28.2.2002 (that is the time when the Finance Minister started delivering his Budget speech) and that the clearances have taken place only on 28.2.2002 after the Budget speech. The Commissioner in paragraph 47 of the impugned order though admits that the exemption was withdrawn only from the midnight of 28.2.2002 that is with effect from 1.3.2002 has however demanded duty on the goods cleared prior to 1.3.2002, when the exemption was still in force. 2.1 The Commissioner has confirmed the demand applying Rule 30A of Central Excise (No. 2) Rules, 2001, wherein it is stated that no excisable goods shall be removed from a factory between the time appointed for presentation of Annual Budget. If the manufacturer intends to remove goods, a specific undertaking has to be furnished to the effect that they would pay the duty at enhanced rate, if any, that may come into effect from the date next to presentation of Budget. The decision in the case of Vikrant Tyres Ltd. Vs. Commissioner of Central Excise, Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trucks on 27.2.2002 and substantial quantity was consigned to nearby places which are ranging from half a kilometer to 4 KM. He also stated that 3011 bales of cotton yarn in plain reel hanks were sold in the late hours on 27.2.2002. That in fact, it had come in newspaper as early as on 4.2.2002 that the exemption on hank yarn might be withdrawn. Therefore, the presumption of the department that the goods were cleared only after 11 a.m. onwards on 28.2.2002 with intention to evade payment of duty is without any basis. 2.5 He submitted that the issue is covered by the decision in the case of J.K. Synthetics Ltd. Vs. Collector of Central Excise 1993 (68) ELT 246 (Tribunal) and Vellamalai Tea Factory Vs. Commissioner of Central Excise, Coimbatore 2014 (299) ELT 241. 3. The ld. AR Shri B. Balamurugan supported the findings in the impugned order. The officers visited the premises of the appellant-Mills and after verification of documents and on basis of records recovered, it was found that both the clearances are shown to have taken place on 27.2.2002 but the clearances had actually taken place only after the presentation of the Finance Bill and that is after 11:00 a.m. on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner under sub-rule (2), and (ii) an application for such removal in the proper form has been presented by the assessee to the Central Excise Officer and such an application has been acknowledged by him before 1700 hours on the working day immediately preceding such day : Provided that no such application for the removal of goods which may come into existence at any time after the appointed time shall be acknowledged unless the terms, conditions and limitations imposed by the Commissioner in this behalf are complied with. Explanation. - For the purposes of this rule, goods include goods which may come into existence at any time after the appointed time. (2) Where an assessee intends to remove goods from a factory or a warehouse under sub-rule (1), he may make an application in this behalf in writing to the Commissioner undertaking to pay duty at the enhanced rate, if any, that may be applicable to such goods with effect from the date immediately following the date on which the Budget, Finance Bill or any other Bill, as the case may be, is presented or introduced, and to comply with such conditions as the Commissioner may specify and thereupon the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dnight 12:00 hours. The Tribunal after taking cognizance of Sections 3 and 4 of Provisional Collection of Taxes Act, 1931, held that duty cannot be collected for the clearances made by the appellant before midnight when the notification came into existence (1.3.2002). The relevant portion of the decision is reproduced as under:- 3. The learned counsel on behalf of the appellants submits that there is no dispute that the goods were cleared on budget day [i.e., 27-2-1999] at about 17.30 hrs. He submits that tea was nil rate of duty prior to budget and the fresh levy would be effective immediately at the expiry of the day on which the budget was presented [i.e., after midnight at 12:00]. In this context, he drew the attention of the Bench to the Provisional Collection of Taxes Act, 1931. He also relied upon the decision of the Tribunal in the case of J.K. Synthetics v. Collector of Central Excise reported in 1993 (68) E.L.T. 246 (Tri.). He further relied upon the decision of the Hon ble Supreme Court in the case of Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd. reported in 1996 (83) E.L.T. 3 (S.C.). 4. The learned authorised representative reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence respectfully following the ratio of the above order of the Tribunal, we set aside the impugned order and accept the appeal. 7. The case law relied upon by the learned Authorised Representative would not apply in the facts and circumstances of the present case. In the case of M/s. Vikrant Tyres (supra), the Larger Bench of the Tribunal decided the issue is whether the undertaking given by the appellant under Rule 224(2A) would cause levy of duty at the enhanced rates by Notification dated 1-3-2000, when the clearances were effected on 29-2-2000, after 11.00 a.m. and before 05.00 p.m. It was held that the differential duty on enhancement of rate of duty on the budget day had been rightly recovered. The Larger Bench observed that in M/s. J.K. Synthetics Ltd. (supra), the ratio of law laid down in M/s. India Explosives Ltd. [1985 (20) E.L.T. 139 (Tribunal)], had been followed, wherein, the facts and the issue involved as observed in that case were different. In the present case, there is no enhancement of duty by notification. In other words, it is a case for imposition of levy by Finance Bill, 1999 and, therefore, the Larger Bench would not apply herein. In the case of Harr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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