TMI Blog1975 (7) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ock on its removal from the factory after March 1, 1970, a sum of Rs. 29,369.36 p. had been recovered as the exemption in question was withdrawn by the notification at Annex. B, dated March 1, 1970, by reason of which under Item No. 14, admittedly, Protinules was liable to excise duty or withdrawal of the exemption. As the petitioner's prayer for refund has been rejected by the impugned orders, the present petition has been filed. 2. The question which has arisen before us is materially about the rate at which these excisable goods were liable to be charged. These goods became excisable when the relevant tariff item 1B was introduced in the Schedule on March 1, 1969. No excise duty was however payable on these goods because of exemption n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the factory or the warehouse but if the payment of duty was made before the removal, then the critical time was the payment of duty. Therefore, if the duty was enhanced, enhanced duty would be attracted, at the rate in force on the date of removal. The same view is taken in Assistant Collector of Central Excise, Calcutta v. National Tobacco Company of India Ltd. - 1978 E.L.T. (J 416) = AIR 1972 S.C. 2563, at page 2568, where it was also held that Rule 9A specified the date with reference to which the duty payable was to be determined. If the relevant exemption was withdrawn on the date of removal, it is obvious that under Rule 9A, the duty payable on these excisable goods was the duty, which instead of "nil" duty become full duty as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated this position by pointing out that in order to be an excise duty, the levy must be upon goods and the taxable event must be the manufacture or production of goods. Further, the levy need not be imposed at the stage of production, or manufacture but might be imposed later. Therefore, in that case it was held that if the duty was levied on an excisable article but that duty was collected from a retailer, it could not necessarily cease to be an excise duty. Even in Jullundur Rubber Goods Manufacturers' Association v. Union of India, AIR 1970 S.C. 1589, at page 1593, the same view is reiterated and it held that even if the levy and collection was from the users of rubber, the method of collection of this excise duty on rubber which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andard of annual value, which was the only standard by which income was measured under the Income-tax Act for determining the income, it did not follow that if the same standard was employed as a measure for any other tax, that latter tax also became tax on income. That is why when a question of rate arises it is only the measure of the tax and once the goods were excisable goods, the measure of tax may be laid down as applicable at any convenient stage, including the stage of removal. But that would not affect the essence of this duty or the tax as an excise duty so long as it was charged on the manufacture or production of goods, which were excisable goods within the meaning of Schedule I. 3. Mr. Patel next argued that it is settled law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly so long as the exemption remained in force. Once the exemption was withdrawn, full excisability was attracted to the goods in question. 4. Mr. Patel had in this connection vehemently relied on the decision in Amar-Dye-Chem Ltd. v. Union of India - A.I R. 1974 S.C. 636 - 1978 E.L.T. (J 427). In that case prior to March 1, 1961, "dyes derived from coal tar and tar derivatives used in any dyeing process, all sorts" were not subject to Central Excise, and these goods were made excisable goods by insertion of the relevant item 14D. Their Lordships in terms pointed out that the Provisional Collection of Taxes Act, 1931, was made applicable to that levy and all dyes derived from coal tar and coal tar derivatives manufactured after the mid-nig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced and manufactured in India, as and at the rates, set forth in the First Schedule. That is why under Sec. 37(2) (x) (vii), the Central Government under the relevant rule has been conferred power to exempt any goods from the whole or any part of the duty imposed by the Act. The relevant Rule 8(1) then enacts that the Central Government may from time to time by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods. From the scheme it is clear that the goods in question became excisable on March 1, 1969 when the relevant tariff Item 1B was put in the Schedule. But that duty imposed was foregone on those exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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