TMI Blog1980 (4) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... moves the dirt and vegetable matter which may have remained in it. Thereafter different types of wool are blended. At this stage, the wool is conveyed to the spinning department in the factory. In the said department humid conditions are maintained as the same are necessary and essential for further processing. The wool is then put on a carding machine. This carding machine consists of cylindrical speed rollers with pins mounted on their surface. Rolling on this machine straightens the fibres and opens the wool. The wob of wool emerging from these rollers is pulled by a drawing head. This reduces the width of the carded wob of wool and gives it the appearance of a cylindrical form being a mere collection of loosely held fibres. However, this cylindrical form consists of fibres of varying lengths which have been carded. There is no twist in these fibres. This form of wool, which is still in its fibre form, is described by the petitioner as 'Sliver'. 4. This Sliver is then processed through three stages to make it more uniform in diameter and to further reduce the weight per meter and to make it suitable for feeding into ring frames for spinning yarn. These machines are called `Dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y should be granted provisional assessment thereafter under Rule 173B(2A) read with Rule 9B of the Rules. The petitioners received letter dated 20th March, 1979 from the Range Officer, Central Excise directing the petitioners not to clear the goods except on payment of excise duty. By the said letter as also by the letter dated 21-3-1979 of the Assistant Collector, the petitioners' request for grant of provisional assessment under Rule 9B was also reputed. Petitioners made representation against the said rejections but before any final decision could be taken or the representation disposed of, the present writ petition was filed. 7. The writ petition was admitted primarily for the reason that one of the contentions of the Petitioners was that a point in issue regarding the removal of the goods have been decided in favour of the petitioner by this Court in the case of The Delhi Cloth General Mills Co. Ltd. Another v. The Joint Secretary, Govt. of India Another, ILR (1978) II Delhi 216 = 1978 (2) E.L.T. (J 121). 8. Before us three contentions have been raised on behalf of the petitioners. It is first of all contended that the aforesaid amended Item No. 43 is ultra vires Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue, such value shall, subject to the other provisions of this section, be deemed to be - (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale :- 4(4) For the purposes of this section, - (a) ... ... ... (b) "place of removal" means- (i) a factory or any other place or premises of production or manufacture of the excisable goods ;" It will thus be seen that reading sections 3 and 4 together the duty of excise is levied with reference to the value of the goods at the time and place of the removal and is to be collected in the manner which is prescribed in the Rules. The relevant Rules in this behalf are Rules 9 and 49, the relevant portions of which read as under :- "9(1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export, or manufacture of any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the question as to whether the assessable value of the product could be determined under section 4, this Court observed that the crucial requisite of section 4 was that the value has to be determined at the time of the removal of the article chargeable with duty from the factory. In that case there were two plants, both situated in the same factory. One plant manufactured Calcium Carbide which was used in the manufacture of acetylene gas in their acetylene gas plant. It was alkged therein that the Calcium Carbide manufactured by it was not removed from the factory but was straightway used to generate acetylene gas by the transfer of the article from one plant to another in the same factory. It we held by the court that as Calcium Carbide is not removed from the factory the point of time at which the value of the product had to be determined under section 4 was not reached and consequently the question of levy and collection of duty did not arise. This Court further observed that the expression "factory" is defined in section 2(e) to mean any premises including the precincts thereof, wherein or in any part of which excisable goods are manufactured. The definition covers the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture. There can be removal only if the product goes out of one stream of production into another stream of production or if the product is issued out or taken out or consumed if no further processing of that product is to be done. The Rule also contemplates that consumption within the place of manufacture would also amount to removal. The consumption of the product contemplated by Rule 9 is consumption of the product by itself and not for converting it into another product, as in the case of Polymer Chips. The integrated continuous process contemplated by Rule 9 read with Rules in Chapter 7A comes to an end when no further processing is to be done of that particular product and thereafter if such product is utilised for consumption or what in excise parlance is known as "home consumption" or exported or used for manufacture of any other commodity in or outside the place of manufacture the excise levy is attracted." It will be seen that the Court laid importance to the fact that there can be no removal of a product within the plant so long as the product is in the process of manufacture. We understand the expression of the removal of the product from one stream of production int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es payable on the excisable goods and in particular such account (and also the account in Form R.G. 23, if the assessee is availing of the procedure prescribed in rule 1 73K) shall be maintained in triplicate by using indeliable pencil arid double sided carbon, and the assessee shall periodically make credit in such account-current, by each payment into the treasury so as to keep the balances, in such accounts current sufficient to cover the duty due on the goods intended to be removed at any time, and every such assessee shall pay the duty determined by him for each consignment by debit to such account-current before removal of the goods : Provided that- (i) the duty due on the goods consumed within the factory in a continuous process may be so paid at the end of the factory day, except that in the case of cotton yarn in respect of which duty is payable in accordance with the provisions of sub-rule (1) of rule 96W the duty due may be paid by the manufacturer in accordance with the provisions of the said rule." This provision can be of no assistance to the respondents. The said provision only provides for the manner or time of the payment of the duty. It postulates that duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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