Case ID: 6196

Judgment:
ivil Appeal No. 3544 of 1989. From the Judgment and Order No. 131/89 D dated 9.5. 1989 of the Central Excises & Gold (Control) Appellate Tribunal	 New Delhi in Appeal No. E/1176/88 D. Rajiv Dutta	 Nimish Kothare and K.K. Patel for the Appel lant. The Judgment of the Court was delivered by SABYASACHI MUKHARJI	 J. This is an appeal under section 35L of the Central Excise & Salt Act	 1944 (hereinafter referred to as 'the Act '). The appellant is a manufacturer of various types of food products known as Sapaghetti	 Macaroni	 Vermicelli	 etc.	 falling under Heading No. 1902.10 of the Central Excise Tariff Act. The appellant filed classification list effec tive from 1st March	 1987 claiming that their pre budget stocks of non excisable goods	 namely	 various types of food products declared in the classification list as aforesaid were entitled to duty free clearance being pre budget stocks. The Assistant Collector of Central Excise	 however	 held that the question of clearing pre budget stocks duty free did not arise because the products in question were excisable though exempted from the duty. There was an appeal from the said order of the Assistant Collector before the Collector of Central Excise (Appeals)	 Bombay. He dismissed the appeal. The appellant went up in appeal before the Tribunal. It was contended before the Tribunal on behalf of the appellant that the goods in question were not leviable to duty under the aforesaid head until 28th February	 1987 and the said goods had been made dutiable only by the 313 Finance Bill	 1987 88 with effect from 1st March	 1987. It was submitted further that on 27th February	 1987	 the appellant had in their factory a stock of the said product which were fully manufactured	 packed and ready for sale and the inventory of the said stock was prepared by the Supdt. of Central Excise on 1st March	 1987. Reliance was placed on several decisions of the different High Courts	 namely	 decision of the Madhya Pradesh High Court in Kirloskar Brothers Ltd. vs Union of India	 ; Union of India vs Kirloskar Brothers Ltd.	 	 decision of the Bombay High Court in Synthetic Chemicals Pvt. Ltd. vs S.C. Coutinho	 	 decision of the Bombay High Court in New Chemicals Ltd. vs Union of India	 decision of the Madras High Court in Sundaram Textiles Ltd. vs Asstt. Collector of Central Excise	 	 decision of the Allahabad High Court in Union of India vs Delhi Cloth & General Mills	 On the other hand	 the revenue contended that the goods forming the pre budget stocks were very much excisable goods and that for the purpose of collecting duty	 date of manufacture was not material under the scheme of the Act even though the taxable event is the manufacture. It was	 therefore	 contended that at the time of manufacture of the goods in question	 the goods were excisable goods and in view of rule 9A of the Central Excise Rules	 1944	 though the taxable event is the manufacture and production	 the payment of duty is related to and postponed to the date of removal of articles from the manufactury. The Tribunal accepted the said contention. We are of the opinion that the Tribunal was right. It is well settled by the scheme of the Act as clarified by sever al decisions that even though the taxable event is the manufacture or production of an excisable article	 the duty can be levied and collected at a later stage for administra tive convenience. The Scheme of the said Act read with the relevant rules framed under the Act particularly rule 9A of the said rules	 reveals that the taxable event is the fact of manufacture or production of an excisable article	 the payment of duty is related to the date of removal of such article from the factory. In that view of the matter	 the Tribunal dismissed the appeal and rejected the assessee 's contention. Appearing before us in support of the appeal	 Mr. Rajiv Dutta	 learned counsel for the appellant contended that in several decisions it has been held	 and referred us to the said decisions referred to hereinbefore	 that the relevant date would be the date of manufacture and in this case the manufacture was complete before the introduction of the budget. It was submitted that until 28th February	 1987	 when	 314 according to Shri Dutta	 the goods had been manufactured	 the goods in question were unconditionally exempt from the duty. Under the Finance Bill	 1987 88	 the said products were made dutiable at the rate of 15% ad valorem on or from 1st March	 1987. But the appellant had in their factory	 a stock of the said products which were duly manufactured	 according to Shri Dutta	 packed and ready for sale prior to 28th February	 1987. In those circumstances	 the goods in question	 according to Shri Dutta	 would not be subjected to duty at 15% ad valorem. Having considered the facts and the circumstances of the case	 we are unable to accept this submission. Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory. Rule 9A of the said rules merely does that. That is the scheme of the Act. It does not	 in our opinion	 make removal be the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under rule 9A of the said Rules. In this connection	 reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory vs Supdt. of Central Excise	 13	 where it was decided that the words 'as being subject to a duty of ex cise ' appearing in section 2(d) of the Act are only descriptive of the goods and not to the actual levy. 'Excisable goods"	 it was held	 do not become non excisable goods merely by the reason of the exemption given under a notification. This view was also taken by the Madras High Court in Tamil Nadu (Madras State) Handlook Weavers Cooperative Society Ltd. vs Assistant Collector of Central Excise	 [1978] ELT J 57. On the basis of rule 9A of the said rules	 the central excise authorities were within the competence to apply the rate prevailing on the date of removal. We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article	 the duty can be levied and collected at a later date for administrative conven ience. Having regard to the facts and the circumstances of this case and having regard to the scheme of the excise law	 we are of the opinion that the Tribunal was right and there are no grounds to assail the order of the Tribunal. In the aforesaid view of the matter	 the appeal must fail and	 accordingly	 is dismissed. there will	 however	 be no order as to costs. R.S.S. Appeal dis missed.

Summary:
The appellant is a manufacturer of various types of food products known as Sapaghetti	 Macaroni	 Vermicelli	 etc.	 failing under Heading No. 1902.10 of the Central Excise Tariff Act. The said goods had been made dutiable only by the Finance Bill 1987 88 with effect from Ist March	 1987. The appellant claimed that their pre budget stocks of fully manufactured non excisable goods were entitled to duty free clearance. The Assistant Collector of Central Excise	 the Collector of Central Excise (Appeals) and the Tribunal rejected the claim of the appellant. Before this Court it was contended on behalf of the appellant that the relevant date would be the date of manu facture and in this case the manufacture was complete before the introduction of the budget. Dismissing the appeal	 this Court	 HELD: (1) Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory. Rule 9A of the Central Excise Rules merely does that. [314C] (2) The scheme of the Act read with the relevant rules framed under the Act	 particularly rule 9A	 reveals that the taxable even is the fact of manufacture or production of an excisable article	 the 312 payment of duty is related to the date of removal of such article from the factory. [313F] (3) On the basis of rule 9A of the Central Excise Rules	 the Central Excise authorities were within the competence to apply the rate prevailing on the date of removal. [314E] Karnataka Cement Pipe Factory vs Supdt. of Central Excise	 and Tamil Nadu (Madras State) Handloom Weavers Co operative Society Ltd. vs Assistant Collector of Central Excise	 [1978] ELT J. 57	 referred to.