WALLACE FLOUR MILLS COMPANY LTD. versus COLLECTOR OF CENTRAL EXCISE, BOMBAY, DIVISION III.

Citation: [1989] SUPP. 1 S.C.R. 311 · Decided: 28-09-1989 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Judgment (excerpt)

"f 
J,t 
WALLACE FLOUR MILLS COMPANY LTD. 
V. 
A 
.. 
COLLECTOR OF CENTRAL EXCISE, BOMBAY, 
I>I\'ISION III. 
, 
SEPTEMBER 28, 1989 
B 
[SABYASACHI MUKHARJI ANI> B.C. RAY, JJ.] 
Central Excises and Salt Act 1944/Central Excise Rules, 1944, Sec-
tions 2(d) and 35L/Rule 9A-Excise Duty-Realisation of-May be 
postponed for administrative convenience to date of·removal of goods c 
from factory. 
The appellant is a mannfacturer of various types of food pr<idncts 
known as Sapaghetti, Macaroni, Vermicelli, etc., falling under Heading 
No. 1902.10 of the Central Excise Tariff Act. The said goods bad been 
I> 
made dutiable only by the Finance Bill 1987-88 with effect from 1st 
March, 1987. The appellant ct8imed that their pre-budget stocks of 
fully manufactured non-excisable goods were entitled to duty free clear-
ance. The Assistant Collector of Central Excise, the Collector of Cent-
rat Excise (Appeals) and the Tribunal rejected the claim of the 
appellant. 
E 
Before this Court it was contended on .. behalf of the appellant 
that the relevant date would be the date of mannfacture and in this 
case the manufacture was complete before the introduction of the 
budget. 
F 
·~ 
Dismissing the appeal, this Court, 
! 
HELD: (1) Excise is a duty on manufacture or production. But 
the realisation of the duty may be postponed for administrative con-
G 
venience to the date of removal of go<ids from the factory. Rule 9A of the 
Central Excise Rules inerely does that. [314C] 
(2) The scheme of the Act read with the relevant rules framed 
under the Act, particularly rule 9A, reveals that the taxable even 
is the fact of manufacture or production of an excisable article, the 
H 
311 
312 
SUPREME COURT REPORTS 
[1989] Supp. 1 S.C.R. 
A 
payment of duty is related to the date of removal of such article from 
the factory. [313F] 
B 
c 
D 
(3) On the basis of rule 9A of the Central Excise Rules, the Cent· 
ral Excise authorities were within the competence to apply the rate 
prevailing on the date of removal. [314E] 
Karnataka Cement Pipe Factory v. Supdt. of Central Excise, 
[1986] 23 ELT 313 and Tamil Nadu (Madras State) Handloom Weavers 
Co-operative Society Ltd. v. Assistant Collector of Central Excise, 
1•
[1978] ELT J. 57, referred to. 
1
CIVIL.APPELLATE JURISDICTION: Civil Appeal No. 3544 
of 1989. 
From the Judgment and Order No. 131/89-D dated 9.5.1989 of 
the ,Central Excises & Gold (Control} Appellate Tribunal, New Delhi 
in Appeal No. El 1176188-D. 
Rajiv Dutta, Nimish Kothare and K.K. Patel for the Appellant. 
The Judgment of the Court was delivered by 
SAB \ASA CHI MUKHARJI, J. This is an appeal under section 
E 
35L of the Central Excise & Salt Act, 1944 (hereinafter referred to as 
'the Act'). 
The appellant is a manufacturer of various types of food products 
known as Sapaghetti, Macaroni, Vermicelli, etc., falling under Head-
ing No. 1902.10 of the Central Excise Tariff Act. The appellant filed 
F 
classification list effective from 1st March, 1987 claiming that their 
pre-budget stocks of non-excisable goods, namely, various types of 
~ 
food products declared in the classification list as aforesaid were 
entitled to duty free clearance being pre-budget stocks. The Assistant 
Cellector of Cental Excise_, however, held that the question of clearing 
pre-budget ,stocks duty free did not arise because the products in ques-
0 
ti on were excisable though exempted from the duty. There was an 
appeal from the said order of the Assistant Collector before the Col-
lector of Central Excise {Appeals), Bombay. He dismissed the appeal. 
The appellant went up in appeal before the Tribunal. It was contended 
before the Tribunal on behalf of the appellant that the goods in ques-
J
tion were not leviable to duty under the aforesaid head until 28th 
j
H February, 19_87 and the said goods had been made dutiable only~¥ ~he 
l
J
WALLACE FLOUR MILLS '· C.C.E. {MUKHARJI, J.] 
313 
Finance Bill, 1987-88 with effect from 1st March, 1987. It was submit-
ted further that on 27th February, 1987, the appellant had in their 
factory a stock of the said product which were fully manufactured, 
packed and ready for sale and the inventory of the said stock 'was 
prepared by the Supdt. of Central Excise on 1st March, 1987. Reliance 
was placed on several decisions of the different High Courts, namely, 
decision of the Madhya Pradesh High Court in Kirloskar Brothers Ltd. 
v. Union of India, [1978] ELT 33; Union of India v. Kirloskar Brothers 
Ltd., [1978]

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