TMI Blog1992 (2) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... etected that the petitioner had wilfully supressed facts and misdeclared the contents in regard to the percentage of wool so as to evade duty on wool tops under Tariff Item No. 43 and thereby declared the goods as duty paid. The petitioner was, therefore, required to show cause why penalty should not be imposed for contravention of Rules 9(1), 52A, 53, 173G and 173F of the Central Excise Rules, 1944 (hereinafter referred to as the Rules). The petitioner submitted a reply denying the allegations made in the show cause notice. No action was taken by the respondent for some time, however later on fresh show cause notice dated 15-11-1977 was issued to the petitioner alleging that the petitioner had not accounted for dutiable goods in RG-1 and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the initial production stage when the tops came into existence, the duty cannot be levied again on the blended wool tops produced from such duty paid wool tops. Thereafter, the Government of India in the exercise of powers under Section 36(2) of the Central Excises Salt Act, 1944 (hereinafter referred to as the Act) issued a show cause notice dated 5-9-1981 to the petitioner as to why the order of Board of Central Excise should not be set aside. The petitioner submitted its reply on 5-10-1981 and submitted that Rule 9 of the Rules could not override the statutory provisions under the Act and as provided under the Act, the liability to pay duty arose at the first stage of manufacture. However the Central Government set aside the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Etc. v. Union of India Another Etc., 1978, (2) E.L.T. (J 336) and Collector of Central Excise, Bombay v. Kiran Spinning Mills, 1988 (34) E.L.T. 5 in support of his contention. 3.On the other hand, it was submitted by the learned Counsel for the respondent that though Section 3 of the Act is the charging Section, it does not decide the time at which the duty of excise is to be paid by a manufacturer. This section merely provides that the Excise Duty shall be leviable and collected in such manner as may prescrible, and the manner of collection has been prescribed in Rule 9 of the Rules. Thus, the petitioner was required to pay excise on blended wool tops at the stage of the removal of the goods from the factory premises. Learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modity at an intermediate stage to the removal. [The] deeming provisions are quite consistent with Section 3 of the Act. Moreover, Rule 9(1) does not require the Collector to specify the place where the excisable goods are produced, cured or manufactured. The words "which may be specified by the Collector in this behalf" occurring in Rule 9(1) of the Rules do not qualify the words "any place where they are produced, cured or manufactured", but relate to or qualify the words "any premises appurtenant thereto". In other words, if the place of removal is not the place where the goods are produced, cured or manufactured, but any premises appurtenant to such place, in that case, the Collector has to specify such premises for the purpose of colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable. We find in the impugned order the Central Government has upheld the order of Collector on the ground that in an integrated factory, duty has necessarily to be paid after blending. To our mind, this reasoning is incorrect and contrary to the judgment of the Supreme Court in J.K. Spinning Weaving Mills Limited case (supra). In our view since the petitioner had discharged the liability on the 100% woolen tops when they were manufactured, no further duty was leviable on blended wool tops at the stage of clearance particularly because the classification remained unchanged. 5.In the circumstances, the writ petition is allowed. The order of the Central Government dated 20th July 1982 is quashed. However, there will be no order as to co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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