MAHESHWARI MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Certain goods are manufactured but not cleared and therefore not assessed to excise duty, when the Act imposing duty of excise comes into force. On such goods whether duty of excise can be levied and collected at the time when the goods are sought to be cleared ? If yes, would the Act be not retrospective? What, then, is the meaning of the term 'retrospective'? These are some of the questions which arise in this petition consequent upon the imposition of additional duties of excise on certain textile articles.

(2.) The Facts and the Controversy : The petitioner Mill Company manufactured cellulosic spun yarn as well as cotton yarn, and cotton fabrics. These products were excisable goods falling under Tariff Item Nos. 18, 18A and 19 respectively of the First Schedule to the Central Excise Act, 1944 (hereinafter referred to as "the Act of 1944") as in force at the relevant time. On 3/10/1978 the Additional Duties of Excise (Textiles and Textile Articles) Ordinance, 1978 was promulgated which became an Act called the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. This Act was passed on 6/12/1978, but it was given effect from the date on which the ordinance came into force, i.e., 4/10/1978. The Ordinance as well as the Act of 1978 provided for levy and collection of additional duty of excise equal to 10% of the total amount of central excise duty chargeable on 9 textile commodities enumerated in Schedule to the Act of 1978.

(3.) The petitioner contends that the Act of 1978 would not be applicable to the goods manufactured prior to midnight of Octrober 3/ 4, 1978. Since 'manufacture' is the taxing event, as far as the duty of excise is concerned, no duty of excise can be levied on the goods which were already manufactured when the Act of 1978 came into force. In his submission, whether goods were removed or not from the factory's storeroom or other permissible premises is not material. If the goods were already manufactured at the time when the Act of 1978 came into force, additional duty of excise under the Act of 1978 cannot be levied on such goods.