Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Central Excise Act 1944/ |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Petition Dismissed |
Headnote | Central Excise Act, 1944/Central Excise Rules, 1944-Section 3/Rule 93-Excise duty-On samples of cigarettes required for quality control test-Held, liable to excise duty, since the manufacture of the end product i.e. cigarette is completed -before removal for test and is fit for consumption.Appellant-Company a manufacturer of cigarette, was issued show cause notices alleging therein that it had been clearing without payment of excise duty 20 sticks of cigarettes from each cigarette making machine in the cigarette making department on each working day as samples for test in their quality control laboratory within the factory premises, total · quantity each day being 65 packets of cigarettes of each brand manufactured in the factory; and that the company neither submitted any classification .list nor maintained any account in respect of quantity of cigarettes removed which was liable to excise duty. Appellant-company contested the demand.Assessing authorities levied excise duty with penalty on the appellant-company holding that manufacturing process in respect of cigarettes is completed at the stage when they emerge in the form of sticks·of cigarettes and excise duty under the provisions of Section 3 of Central Excise Act, 1944 on the manufacture or production of the final article, i.e., in the case F of cigarette was attracted at that very stage even though collection was deferred.until clearance; and that the process of packing of cigarettes was . not incidental or ancillary to manufacture but it was incidental or ancillary· to the sale of the end products. In appeal Tribunal held that excise duty is leviable but remitted the matter to the assessing authorities for limited purpose of working out the effective excise duty recoverable on disputed quantity of cigarettes. In appeal to this Court appellant company contended that in terms of Rule 93 of Central Excise Rules, 1944 no exciseable tobacco products can be delivered from any factory unless the same are made into separate packets and enclosed in a wrapper bearing, inter :ilia, the name of the factory and the licence number which can be done only after the completion of testing and thus as the process of manufacture of cigarettes B was not completed, no excise duty is leviable thereon. Alternatively it was contended that certain quantity of cigarettes is destroyed during the process of testing whereupon no excise duty is leviable. Respondent-Revenue contended that manufacture of cigarette within the meaning of section 2(1) of Central Excise Act, 1944 is completed no C sooner they are completed into sticks of cigarettes and the process of packing into separate packets and wrapping the same is neither incidental nor ancillary to the completion of manufacture of cigarette, but the same may, at the highest, be incidental or ancillary to its sale; and that it is not known as to whether any quantity of cigarette was at all destroyed during the process of testing and if a·t all there was any destruction, what was its D quantum as no account in this regard was either maintained or produced either before the assessing authority or the Tribunal. |
Judge | Hon'ble Mr. Justice B.N. Agrawal |
Neutral Citation | 2002 INSC 527 |
Petitioner | I. T. C. Ltd. |
Respondent | Collector Of Central Excise, Patna |
SCR | [2002] Supp. (5) S.C.R. 1 |
Judgement Date | 2002-10-10 |
Case Number | 6402 |
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