TMI Blog2021 (10) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... d to a transaction of manufacture and sale of the said lubricant. Thus, even though the product in this case is marketable, it does not answer to the question of excisable goods as, practically there can be no levy of duty thereupon in the absence of a stipulated rate and applicable rate of duty. Thus, notwithstanding that the language of Section 125(h) of the SVLDRS Scheme uses the phrase with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 , the use of the word excisable cannot be seen to be cosmetic, but must contain some purpose - Mere mention of the commodity without the rate of tax would serve no purpose as far as excisability is concerned. Neither the judgment of the Hon ble Supreme Court in the case of MOTI LAMINATES PVT. LTD. VERSUS COLLECTOR OF CENTRAL EX., AHMEDABAD [ 1995 (2) TMI 67 - SUPREME COURT] , the General Rules of interpretation to Schedule 4 of the Act nor the Clarification of the OSD have been brought to the notice of the Division Bench of the Allahabad High Court while considering the case of M/S INDIAN OIL CORPORATION LIMITED VERSUS UNION OF INDIA AND 2 OTHERS [ 2020 (12) TMI 316 - ALLAHABAD HIGH COURT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of disputes from its cover in terms of Section 125 thereof including those with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 7. There was some discussion between the petitioner and respondent in regard to whether at all the declaration would be maintainable. The petitioner had, vide its mail dated 25.11.2019 sought a clarification and a confirmation that only those products that were still subject to the levy of central excise at the time of transition into GST would remain outside the purview of the scheme and that litigation in regard to all other goods would be covered by the Scheme. 8. In response to the aforesaid mail, on 26.11.2019, the Officer on Special Duty (OSD) confirmed, referring to the 101st Amendment of the Constitution of India, that only Petroleum crude, high speed diesel, motor spirit, natural gas, aviation turbine fuel and tobacco and tobacco products still fall under the ambit of central excise and thus, only cases relating to the aforesaid commodities would fall outside the purview of the SVLDRS Scheme. 9. The petitioner would also point out that the lubricants were subject to levy of Goods and Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vies and that SKO continued to be excisable under Central Excise Act, 1944, even if it were liable to GST. Paragraph Nos.16 and 17 rejecting the contention of Indian Oil Corporation in that Writ Petition are extracted below: 16. Section 3 of the Act, 1944 as amended by Act 18 of 2017 is the charging Section. It provides for leavy and collection of duty of excise to be called Central Value Added Tax (CENVAT) on all excisable goods which are produced or manufactured in India, at the rates set forth in the Fourth Schedule. Sub-Section 3 of Section 3 empowers the Central Government to provide by Notification rates of duty and tariff values with respect to the articles enumerated in the Fourth Schedule. Thus, all the items which are enumerated in the Fourth Schedule are excisable goods in terms of the provisions of Section 2(d), read with Section 2(f) and are liable to duty at the notified rates under the charging Section 3 of the Act. 17. Manufacture is the taxable event under the Central Excise Act, 1944 while under Section 9 of the CGST Act/UPGST Act, the event of taxation is the supply of goods or services except the supply of alcoholic liquor for human consumption. Sub-S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us refund or refund; (e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019; (f) a person making a voluntary disclosure,- (i) after being subjected to any enquiry or investigation or audit; or (ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it; (g) who have filed an application in the Settlement Commission for settlement of a case; (h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944. (2) A declaration under sub-section (1)shall be made in such electronic form as may be prescribed. 18. We are concerned with Section 125(1)(h) that excludes persons seeking to make declarations with respect to excisable goods set forth in the 4th schedule to the Central Excise Act, 1944. One of the questions that arises is as to what constitutes excisable goods . 19. This question came to be raised and answered in the case of Moti Lam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in manufacture of leather cloth, jute matting and PVC tapes were held not to be excisable goods on the test of marketability. In Collector of Central Excise v. Amhalal Sarahhai Enterprises1989(43) ELT 214 the manufacturers produced starch hydrolysate which was captively consumed and fell under item 1-E of the Central Excise Tariff It was held to be goods, no doubt, but it was observed that from a practical point of view it was apparent that the goods were not marketable consequently they were not exigible to duty. 21. The thrust of the aforesaid observations would lead one to the conclusion that the incidence of duty must not be looked at a mechanical event but a constructive one, that contains all incidents of a taxable event. Thus, to attract levy of duty, as the Hon ble Supreme Court says, a practical point of view must also be called into play to determine whether the goods are marketable or capable of being marketed. Though in that case the Court was concerned with whether the commodity in question was capable of being marketed as a distinct and marketable product, the observations made would apply to the present scenario as well, since in the present case, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of goods may continue to be part of the schedule, only such goods as have been attributed with a positive rate of tax would attract the exclusion as per Section 125(h) of the SVLDRS Scheme. 25. In Wallace Flour Mills (supra) the Hon ble Supreme Court reiterated the well settled proposition that the taxable event in the Scheme of the Central Excise and Salt Tax Act is the manufacture/production of the excisable article, though the incidence/collection of duty may be at a later stage for administrative convenience. 26. In this case, the taxable events of manufacture and removal stand crystallised and the petitioner has remitted GST in regard to the transactions. However, the transaction becomes academic in context of Central Excise levy in the absence of a positive rate of duty. Thus, qua Central Excise, the taxable event is merely illusory and nothing more. 27. In Handloom Weavers C-operative Society Ltd. (supra), a Division Bench of this Court held that the mere fact the goods are exempt from duty does not remove them from the ambit of excisability. At paragraph 7, the Bench states as follows: 7. We are unable to agree with the contention of the learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alls within the limits set out under the Scheme. The interpretation of the clause under the Scheme must thus in line with this avowed object and any conflict that arise in interpretation must be resolved in favour of the assessee. 29. I find support for this conclusion in Circular No.1071/4/2019 CX 8 dated 27.08.2019, wherein, at paragraph 6, it is stated as follows: 6. It may be appreciated that the ambit of this Scheme is wide enough to cover all kinds of pending disputes, including call book cases, except for a few categories. The exclusions are firstly, cases in respect of goods that are still subject to levy of Central Excise such as specified petroleum products and tobacco i.e. goods falling in the Fourth Schedule to the Central Excise Act, 1944. Secondly, cases for which the taxpayer/noticee has already been convicted in a Court of law. Thirdly, cases under adjudication or litigation where the final hearing has taken place on or before 30.06.2019. Fourthly, cases of erroneous refunds. Lastly, cases which are pending before the Settlement Commission. 30. Section 125(h) specifically uses the term excisable goods . The Hon ble Supreme Court in Moti Laminates (su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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