1.2 The appellants are engaged in manufacture of cement. The appellants intended to clear cement from their factory after 17.00 hours on the day of presentation of the Finance Bill/Budget 1993 i.e. 27-2-1993.
Consequently, in compliance with the provisions of Rule 224(2A) of the Central Excise Rules, 1944, the appellants executed an undertaking to pay the differential duty if the duty on cement was enhanced in the Budget. They cleared the cement weighing 404.5 mts. at the rate of Rs. 290/- per tonne as basic excise duty and Rs. 43.50 per mt. (@15% of BED) as special excise duty. However, the basic excise duty on cement was enhanced to Rs. 330/- per mt. but the special excise duty was withdrawn according to the budget proposals effective from 28-2-1993.
1.3 In terms of the undertaking, the appellants were asked to deposit the differential duty @ Rs. 40/- per mt. (Rs. 300-Rs. 290) plus 15% of B.E.D. as S.E.D. on the aforesaid quantity of cement cleared on the budget day after 17.00 hrs. to 24.00 hrs.
1.4 The appellants deposited Rs. 16,180/- under protest which represented the component of B.E.D. and stated that S.E.D. was not payable because that duty was not enhanced but in fact withdrawn in the budget proposals. They requested to drop the show cause notice.
1.5 In the course of personal hearing, the appellants stressed that the enhanced rate is applicable; from the following day i.e. from 00.00 hrs. of 28-2-1993. They relied on Tribunal's judgment in the case of Indian Explosives Ltd. v. C.C.E., reported in 1985 (20) E.L.T. 139 (Tribunal). Hence the appellants requested grant of refund of Rs. 16,180/- since they had paid that amount ' under protest. Plea of the appellants was rejected by the Assistant Collector and he confirmed the aforesaid amount of duty i.e. Rs. 18,607/-.
1.6 The appellants did not succeed before the lower appellate authority. Hence this appeal before us.
2.1 Learned Advocate Shri Pankaj Mullick has reiterated the aforesaid plea. He has further fortified the plea by Tribunal's another judgment in the case of J.K. Synthetics Ltd. v. Collector 1993 (68) E.L.T. 246 which holds that rates of duty proposed in the Budget take effect from 00.00 hours of the day following the budget day by virtue of Provisional Collection of Taxes Act (P.C.T. Act). Provision of an Act cannot be over-ridden by Central Excise Rules, 1944.
2.2 Learned SDR, Shri Satnam Singh for the Revenue, on the other hand, urges that Rule 224(2A) is categorical that "enhanced rate, if any, that may be applicable to such goods with effect from the date immediately following the date aforesaid" (i.e. budget day) is to be undertaken to be paid by the assessee. Purpose of P.C.T. Act is totally different and it does not come in conflict with Rule 224(2A). Sub-rule (2) of Rule 224 ibid prohibits removal of excisable goods after 17.00 hrs. on the Budget Day. Sub-rule (2A) is a relaxation of the earlier sub-rule subject to execution of an undertaking by a manufacturer/assessee. Having availed of that relaxation under Sub-rule (2A), the appellant cannot go back on his undertaking to pay duty at enhanced rate, though applicable from the following day, on goods cleared after 17.00 hrs. on Budget Day. Learend SDR, therefore, submits that ratios emerging from J.K. Synthetics and Indian Explosives (supra) need to be reconsidered.
3.1 We have carefully considered the pleas advanced from both sides. We observe that Tribunal's judgment in J.K. Synthetics (supra) appears to cover the case of the appellants herein. But we also notice that the said decision of the Tribunal relies solely on P.C.T. Act to observe that "the basic principle to be followed is the same irrespective of whether it is a case of new levy or enhancement of the rate of a pre-existing levy, as the Section 4 of the Provisional Collection of Taxes Act makes budget provisions applicable from the midnight following the Budget day in both eventualities inasmuch as its clause 1 says that 'a declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced' and these provisions are applicable in all cases where 'it is expedient to amend the law providing for the immediate effect for a limited period of provisions in bills relating to imposition or increase of duties of Customs or excise'.
3.2 In the next para of J.K. Synthetics i.e. in para 7 of 1993 (68) E.L.T. 246, Tribunal has observed: "7. In the case of Indian Explosives the Tribunal has tried to read in harmony the provisions of Rule 224 and those of the provisional Collection of Taxes Act." It goes on to observe further, "and the ratio will apply to the cases of new imposts as well as those of increase of duties of Customs or excise." 3.3 Ratio of Indian Explosive, appears to be, that Rule 224 applies only to, enhanced rate in an existing levy, though applicable immediately following the expiry of the budget day to clearances of excisable goods effected during 1700 hrs. to 24.00 hrs. on the budget day, on the basis of an undertaking executed by a manufacturer under the said rule. As stated in/.K Synthetics, Indian Explosives , harmonises both Rule 224 of the Central Excise Rules, 1944 and the provisions of Provisional Collection of Taxes Act but J.K. Synthetics makes the provisions of Rule 224(A) superfluous, even in cases of enhancement in rate of duty in the Finance Bill etc., in pre-existing levies because of provisions in the P.C.T. Act.
3.4 It is too well-settled a proposition that construction of any statutory provision should not lead to any portion thereof being made superfluous. While we agree that Indian Explosives appears to create a distinction between new imposts and increase in rate of duties in pre-existing levies, because of use of word "enhancement" in rate of duty in Finance Bill etc. J.K. Synthetics lays down too wide a proposition so as to virtually obliterate the effect of Rule 224(2A) ibid.
3.5 In our view there is no conflict between the provisions of Rule 224(2A) ibid and the provisions of P.C.T. Act. They act in different areas and have different purposes. Therefore, strictly speaking, there is no need for harmonising their provisions. Purpose of Rule 224(2A), as rightly pointed out by the learned SDR, is to relax the prohibition of removing excisable goods after 5.00 P.M. as laid down in earlier Sub-rule (2) of that rule subject to execution of the undertaking to pay duty at the enhanced rate, that may be applicable from the day following the presentation of any Bill as mentioned in Sub-rule (2).
Once a manufacturer avails of that relaxation, he cannot be allowed to turn back and say that he will not abide by the undertaking given by him in view of the P.C.T. Act. The manufacturer was at liberty not to clear excisable goods after 5.00 P.M. on such a date. Plea of estoppel taken by the learned SDR, in view of the undertaking executed by the appellant, in our view, is well founded and is supported by Bombay High Court's judgment in 1988 (34) E.L.T. 522 (Bom.) - Para 8 [Someshwar Sahakari Sakhar Karkhana Ltd. v. U.O.I.] 3.6 Rule 224(2) itself recognises that the proposed enhancements in rates are going to be made applicable from the day following the day of presentation of the Bills referred to in Sub-rule (2), when it uses the expression :- "... enhanced rate, if any, that may be applicable to such goods with effect from the date immediately following the date aforesaid...".
Yet Rule 224(2A) envisages execution of an undertaking as aforesaid, binding the manufacturer to pay duty at the enhanced rate for clearance between 17.00 hrs. to 24.00 hrs. on the day of presentation of such a Bill.
3.7 Reason for such a provision is not difficult to gather. This sub-rule makes an inbuilt anti-avoidance measure. When Hon'ble Finance Minister introduces any such Bill in the Lok Sabha, he normally does so, as has been seen, around 5.00 P.M. on the date of presentation of the Bill and unfolds his proposals (of new imposts and increase in rates of excise and Customs duties) after that. Though such proposals become effective from 00.00 hrs. of the next day, public becomes aware of the same a day earlier around 5.00 P.M. Manufacturers could, in law, take advantage of this public knowledge and thus avoid Customs & Excise duties. Thus the need to prohibit removal of goods after 5.00 P.M. on such a date and relaxation with an undertaking to pay at enhanced rates, though legally applicable from the next date.
3.8 Purpose of P.C.T. Act, on the other hand, is to enforce duties of Customs Excise immediately from the expiry of the date of presentation of such a Bill, although the 'Act', on formal passing of the Bill, will be enacted not later than 75 days. Hence the need for provisional collection of customs and excise duties. In case Parliament does not approve any proposal in the Bill, so introduced, duties provisionally collected have to be refunded. Rule 224(2A), after having been acted, becomes part of the Central Excise Act, 1944. There is, therefore, no question of the P.C.T. Act over-riding the provision of Rule 224(2A), the rule having become a part of the Central Excise Act, 1944. Equal compliance to both P.C.T. Act and the Rule 224(2A) has to be observed and enforced. We observe, while on this aspect, that P.C.T. Act does not have any 'non obstante' clause such as "notwithstanding anything contained in any other Act or the rules made thereunder...' so as to give over-riding effect to the provisions of that Act over Rule 224(2A). We also notice that Sub-rule 224(2A) was introduced many years later while P.C.T. Act, 1931 was already in existence.
3.9 Such a view, as above, has been taken by the learned Vice President (Judicial), as part of the majority opinion in Tribunal's judgment in 1990 (50) E.L.T. 370 [Associated Cement Co. v. Collector para 15].
Relevant extracts are reproduced below :- "The question turns on the effect of an application made under the sub-rule by manufacturer in writing to the Central Government Undertaking to pay duty at the enhanced rate, if any, that may be applicable to such goods with effect from the date following the date appointed for the presentation of annual or supplementary budget as referred to in the sub-rule. But for this provision and application it would not be permissible for the manufacturer to remove the goods from the factory or warehouses after 5 P.M. on the date appointed for presentation of the Budget in Parliament. The permission is granted in consideration of the application and undertaking to pay duty at the enhanced rate."Tata Engineering & Locomotive Co. v. CCE 4.1 There is another aspect of the case that needs to be noticed.
Order-in-Original points out that prior to budget of 1993 Basic Excise duty on Cement was prescribed in the Tariff at 40% ad val plus Rs. 250/- per metric tonne. S.E.D. was leviable at the rate of 15% of B.E.D. However, by Notification 7/92, dated 1-3-1992, B.E.D. had been fixed at Rs. 290/- per metric tonne. But in the Budget of 1993, by Notification 5/93, B.E.D. was enhanced from Rs. 290/- to Rs. 330/- per mt. S.E.D., as leviable under the Finance Act, 1992 @ 15% of B.E.D. was withdrawn w.e.f. 28-2-1993 vide Notification No. 75/93, dated 28-2-1993.
4.2 We are concerned here with enhancement in the rate of basic excise duty. This enhancement has resulted not from any proposal in the Finance Bill 1993, but by issue of a notification under Section 5A(1) of the Central Excise Act, 1944. This notification has not taken effect by virtue of any declaration under the P.C.T. Act. Question of P.C.T.Act over-riding the provisions of Rule 224(2A), as appears to be the ratio of J.K. Synthetics, does not arise, in the peculiar facts of this case. Tribunal's judgment in J.K. Synthetics, (supra) cannot, therefore, help the appellant.
5.1 Looked at from any angle, appeal deserves to be dismissed. I order accordingly.