1. This appeal is directed against the impugned order-in-appeal dated 1-3-1988.
2. Brief facts leading to the present appeal are that the appellants are manufacturers of various types of products such as Sapaghetti, Macaroni, Vermicelli, etc., falling under Tariff Item No. 1902.10 of the Central Excise Tariff Act. They filed their classification list No.38/87 effective from 1-3-1987 claiming that their pre-budget stocks of non-excisable goods namely various types of food products declared in the classification list were entitled to duty free clearance being pre-budget stock. However, the Assistant Collector concluded that the question of clearing pre-budget stock duty free did not arise because these products were excisable though exempted from duty. Against the said order of the Assistant Collector, the appellants filed their appeal before the Col-ledtor of Central Excise (Appeals), Bombay but without any success. Hence the present appeal.
3. We have heard Shri N. Kothare, the learned Counsel for the appellants and. Smt. V. Zutshi, the learned SDR for the respondent.
Shri Kothare, learned Counsel for the appellants submitted that the aforesaid products manufactured by the appellants were not leviable to duty under Heading 1902.10 until 28-2-1987 and the said products were made dutiable only by Finance Bill, 1987-88 with effect from 1-3-1987.
He further submitted that on 27-2-1987, the Appellants had in their factory a stock of the said products which were fully manufactured, packed and ready for sale and the inventory of the said stock (hereinafter called pre-budget stock) was prepared by the Supdt. of Central Excise on 1-3-1987. He also submitted that thereafter the appellants filed their Classification List in Form I showing the verified and properly authenticated "Pre-Budget Stocks" for approval to the Assistant Collector of Central Excise. However, the Assistant Collector by his Memorandum of Approval dated 23-7-1987 returned the said Classification List back to the appellants with an erroneous remark that "these items were already excisable but exempted, the question of pre-excise stock does not arise". On appeal the Collector (Appeals) also held accordingly. In this background he submitted that both the authorities below erred in not allowing the appellants to remove the pre-budgetary stocks without payment of duty. In a nutshell his contention was that the goods forming "pre-budget stocks were manufactured the, same were not excisable goods". To support his contention he relied upon the following judgments -________________________________________________________Name of the Parties Name JudgmentHigh Court1. Madhya Kirloskar 1978 (2) E.L.T. 33 Pradesh High Brother Ltd.2 -do- Union of India 1978 (2) E.L.T. 690 v. Kirloskar3. Bombay High Synthetic 1981 (8) E.L.T. 414 Court Chemicals Pvt.4. -do- New Chemicals 1981 (8) E.L.T.920 Ltd. v.Court Textiles Ltd. 1983 (13) E.L.T. 909 v. Asstt.6. Allahabad Union of India 1978 (2) E.L.T. 177 High Court v. Delhi Cloth7. CEGAT Andhra Sugar 1986 (7) ECR 262 Mills Ltd. v.8. CEGAT Vazir Sultan 1985 (21) E.L.T. 757 Tobacco Ltd.9. CEGAT Caster Oil Ltd. 1985 (21) E.L.T. 333 Calcutta v.10. CEGAT Collector of 1985 (21) E.L.T. 23l Central Excise,11. CEGAT British Indian 1985 (26) E.L.T. 1936 Corporation v.12. CEGAT Gopaldas Jagat 1983 (13) E.L.T. 1107 Ram Pvt. Ltd.13. CEGAT Telco v. 1987 (11) ECR 609 Collector of14. CBEC Gorag Sugar 1981 (8) E.L.T. 843 Ltd.15. Appellate Prabhat Steel 1983 E.L.T. 323 Collector Pvt. Ltd. 4. In reply Smt. V. Zutshi, the learned SDR submitted that the goods forming pre-Budget stocks were very much excisable goods and that for the purpose of collecting duty, date of manufacture is irrelevant, even though taxable event is the manufacture. In other words her submission in a nutshell was that at the time of manufacture of the goods in question the goods were excisable goods and the scheme of the Central Excises and Salt Act, 1944 and the Rules framed thereunder, particularly Rule 9A, reveals that while the taxable event is the fact of manufacture or production of an excisable goods, the payment of duty is related to the date of removal of such article from the manufactory.
To support her contention she cited a number of decisions of the Tribunal wherein the case law cited by the learned Counsel for the appellants was duly considered and particularly drew our attention to a recent judgment of the Hon'ble Gujarat High Court rendered in the case of Maheshwari Mills Ltd. v. Union of India, 1988 (35) E.L.T. 252.
5. We have considered the submissions. At the outset the contention of the learned Counsel for the appellants that when the goods forming the pre-budget stock were manufactured, the same were not excisable goods, cannot be accepted. "Excisable goods" is defined in Section 2(d) of Central Excises and Salt Act, 1944 as follows - "(d) "excisable goods" means goods specified in the First Schedule as being subject to a duty of excise and includes salt' Under the charging Section 3 of the Act, duty as specified in the First Schedule is levied on all excisable goods. The First Schedule to the Act gives description of goods, which are excisable and the rate of duty. At the relevant time it is admitted to the appellants that the products in question forming the pre-budget stock was shown as excisable goods in the First Schedule of the Act under the Heading 1902.10 and 1902.20 and in the column for rate of duty, the duty was shown as 'Nil'. From these admitted facts it is clear that at the time of manufacture of goods in question the same were excisable goods and were shown as such in the First Schedule to the Act. In the case of Karnataka Cement Pipe Factory v. Superintendent of Central Excise, 1986 (23) E.L.T. 313 it was decided by the Hon'ble Karnataka High Court that the words, "as being subject to a duty of excise" appearing in Section 2(d) as reproduced above, are only descriptive of the goods and not to the actual levy. It was further held that "Excisable goods" do not become non-excisable merely by the reason of the exemption given under a notification. The same view was taken by the Madras High Court in the case of Tamil Nadu (Madras State) Hand-loom Weavers Co-operative Society Ltd. v. Assistant Collector of Central Excise, 1978 E.L.T. (J 57), wherein it was argued that in order to be satisfied in the First Schedule, to the Act the goods should also be subject to a duty of excise i.e. to say specification of the goods as an Item in the First Schedule as also subjecting them to a duty of excise are to be satisfied as cumulative conditions in order to bring the goods within the definition of "excisable goods". Repelling the contention their Lordships observed as follows - "7. We are unable to agree with the contention of the learned Counsel. We are of the view that the words "as being subject to a duty of Excise" in the definition of the term "excisable goods" are only descriptive of the goods specified in the First Schedule, and have no reference to the factum of their liability to duty. In fact, it is seen that some of the rate of duty as 'NIL'. It could not be contended that these goods are not 'excisable goods'. In this connection, we may also refer to Section 3, which is the charging section, which provides for the levy and collection of excise duty on all excisable goods. Produced or manufactured in India at the rate set forth Schedule, thereby showing that excisable goods in the definition in the section refer only to the description of the goods in column (2) of the First Schedule, and not to the rate of duty in column (3) of that Schedule..." 6. In the case of Maheshwari Mills Ltd. v. Union of India, 1988 (35) E.L.T. 252, a Division Bench of the Gujarat High Court held that it is well established by a number of 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 date for administrative convenience. The scheme of the Central Excises and Salt Act and the Rules framed thereunder, particularly Rule 9A, reveals that while 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 manufactory. In that case the Hon'ble Gujarat High Court considered the conflicting views recorded by the different High Courts. It particularly noted the judgment delivered by the Madhya Pradesh High Court in the case of KirloskarBrothers Ltd. v. Union of India, 1978 E.L.T. 33, wherein it was held that the goods manufactured during the exempted period cannot be taxed even if removed after the exemption is withdrawn and after noticing so, observed as follows - "17...With respect, the High Court thinks that the moment there comes into existence an excisable article, the point of time for levy and collection of duty gets fixed to the date of manufacture, a view which ignores the provision in Rule 9A of the Rules. In a subsequent decision in M.P. No. 338/79 dated 16th Jan., 1982 that High Court differed with its earlier decision and held on the basis of Rule 9A that the excise authorities were right in applying the rates prevailing on the date of removal, and thereby agreed with the conclusion of this Court in Alembic Chemical Works case (supra) - See paragraph 17 of Sirpur Paper Mills case (ibid)." 7. Besides, this Tribunal in a number of recent judgments, to quote a few, Techno Chemical Industries v. Collector of Central Excise, 1987 (31) E.L.T. 541; Chemicals of India, Faridabad v. Collector of Central Excise, 1989 (13) ETR 692 has also taken the same view after considering the entire case law on the point which includes the various conflicting decisions of the different High Courts in the country and concluded that the excisable goods do not become non-excisable even though fully exempted.
8. In view of the above we find no force in the appeal and dismiss the same.