VELLAMALAI TEA FACTORY Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) ALL the appeals are arising out of a common order and, therefore, all are taken up together for disposal. As the facts of the case in all the appeals are mostly identical in nature and, therefore, the facts as narrated in appeal of M/s. Nadumalai Tea Factory would be taken up for discussion. On 27th February, 1999, at about 10.30 p.m., the Central Excise officers attached to Pollachi Division intercepted a vehicle which was found loaded with 'Black Tea'. The driver of the vehicle produced the invoices and the date and time of removal mentioned as 26 -2 -1999 at 05.15 p.m. The driver of the vehicle informed that the consignments were loaded and cleared on 27 -2 -1999 at about 17.30 hrs., which was the budget day. The goods along with vehicle were seized as the appellant have not obtained permission from the Commissioner of Central Excise for clearance of goods on the budget day as required under Rule 173G(2) read with Rule 224 of the erstwhile Central Excise Rules, 1944. On 27 -2 -1999, by Finance Bill, 1999 duty was levied on 'tea' including 'tea waste' at Rs. 2/ - per kg. Show cause notices were issued proposing demand of duty, confiscation of goods and imposition of penalty. The original authority confirmed the demand of duty and confiscated the goods, imposed penalty along with redemption fine as under: - -

(2.) THE learned counsel on behalf of the appellants submits that there is no dispute that the goods were cleared on budget day [i.e., 27 -2 -1999] at about 17.30 hrs. He submits that tea was 'nil' rate of duty prior to budget and the fresh levy would be effective immediately at the expiry of the day on which the budget was presented [i.e., after midnight at 12:00]. In this context, he drew the attention of the Bench to the Provisional Collection of Taxes Act, 1931. He also relied upon the decision of the Tribunal in the case of J.K. Synthetics v. Collector of Central Excise reported in : 1993 (68) E.L.T. 246 (Tri.). He further relied upon the decision of the Hon'ble Supreme Court in the case of Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd. reported in : 1996 (83) E.L.T. 3 (S.C.).

(3.) AFTER hearing both sides and on a perusal of the records, we find that by Finance Bill, 1999, as announced on the budget day 27 -2 -1999 duty was imposed on tea, including tea waste at the rate of Rs. 2/ - per kg. The issue involved is that the goods removed after 05.00 p.m. before mid -night of budget day, whether the new levy would be imposed as per Rule 224(2A) of the erstwhile Rules, 1944. We find that Provisional Collection of Taxes Act, 1931 provides effect to the declaration of the law and the relevant portions are reproduced below: - -