KANORIA CHEMICALS AND INDUSTRIES LTD Vs. CEGAT

JUDGEMENT

(1.) The petitioner filed an appeal against the impugned order passed by the Collector (Appeals) Customs & Central Excise, Allahabad Annexure 3 to the writ petition and also made an application for stay and waiver for dispensing with the pre-deposit of duty required to be made by the petitioner. The Tribunal then passed the impugned order dated 26th July, 1996 on the stay/waiver application requiring the petitioner to make deposit within four weeks from the date of the order.

(2.) The submission of the learned counsel for the petitioner is that the Supreme Court in Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd. [1996 (83) E.L.T. 3 (S.C.)], held that Entry 84 of List-I of the Seventh Schedule to the Constitution of India empowers the Parliament to make a law providing for levy of duties of excise on tobacco and other goods manufactured or produced in India. The Supreme Court says that indisputably, the special excise duty is an excise duty and is relatable to Entry 84. If so, the levy must be on the manufacture or production of goods. Once the levy is not there at the time when the goods are manufactured or produced in India, it cannot be levied at the stage of removal of the said goods, says the Supreme Court. It is further held that idea of collection at the stage of removal is devised for the sake of convenience. It is not as if the levy is at the stage of removal; it is only the collection that is done at the stage of removal.

(3.) Relying on this authority, the counsel for the petitioner submits that the goods in question are pre-budget stock which are cleared after 1st March, 1996 i.e. after the budget. The goods in question therefore, will not be exigible.