Holding

Special excise duty, being an excise duty within Entry 84, is leviable only at the time of manufacture or production of goods; therefore, goods manufactured before the duty’s commencement on 1 March 1978 are not liable to the special duty even if removed thereafter.

Summary

The Supreme Court examined whether cigarettes manufactured before 1 March 1978 but removed from the factory after that date were liable to the special excise duty introduced by Section 37 of the Finance Act, 1978. The respondent, a tobacco manufacturer, argued that excise duties are levied at the time of manufacture, not removal, and therefore the duty could not be imposed on goods produced before the levy’s commencement. The State contended that the rate and valuation were determined by the date of removal under Rules 9 and 9A. The Court held that the special duty, being an excise duty within Entry 84 of the Constitution, is leviable only at the stage of manufacture or production; consequently, goods made before 1 March 1978 are not subject to the duty even if removed later. Section 3 of the Central Excise Act does not shift the levy to removal, only the collection. The Court dismissed the State’s appeal and allowed the respondents’ appeal, denying any refund of special duty collected on such pre‑1978 goods.

Issues considered

Whether goods manufactured prior to 1 March 1978 but removed on or after that date are liable to the special excise duty under Section 37 of the Finance Act, 1978.
Whether Section 3 of the Central Excise Act shifts the levy of special excise duty from manufacture to removal.
Whether the rate and valuation of the special duty are determined by the date of removal under Rules 9 and 9A.
Whether the special excise duty falls within Entry 84 of List I of the Seventh Schedule and is therefore levied on manufacture.

Legislation cited

Central Excise Act, 1944s. 3
Central Excises and Customs Law (Amendment) Act, 1991s. 12-B
Finance Act, 1978s. 37
General Clauses Act, 1897s. 6

Subjects

special excise dutymanufacture vs removalCentral Excise ActSection 37 Finance Act 1978Entry 84 Constitutiontaxable eventlevy and collectionrefund of excise dutyRules 9 and 9A

Judgment

A COLLECTOR OF CENTRAL EXCISE, HYDERABAD ETC. ETC.
I
v.
MIS. VAZIR SULTAN TOBACCO CO. LTD.,
HYDERABAD ETC. ETC.

FEBRUARY 28, 1996
B
[B.P. JEEVEN REDDY, SUHAS C. SEN AND G.T. NANAVITI, JJ.]

Finance Act, 197~Section 37-Central Excise Act-Section 3-Lery
of special duty of excise w.e.fl.3.197~Whether goods manufactured prior to
C 1.3.1978 but removed on or after 1.3.1978 are liable to special duty of ex-
cise-Held; Ncr-Taxable event is the manufacture or production of goods,
and not the removal of goods.

The respondent company, engaged in the manufacture of cigarettes,
challenged the levy of special excise duty on cigarettes removed between
D 13.1978 and 12.3.1978, alleging that though cleared on or after 13.1978,
they were manufactured prior to that date and in as much as the special
duty of excise was upon the manufacture or production of excisable articles
and not upon removal, no duty was leviable upon the cigarettes manufac-
tured by the respondent. The authorities rejected respondent's case and
E levied the duty. The respondents filed applicatfon for refund which was
rejected by the Assistant Collector. In appeal, the Special Bench of the
Tribunal upheld the respondent's case and granted the relief. These ap-
peals had been filed challenging the correctness of the view taken by the
Tribunal.

F The appellants submitted that both for the purpose of rate and
valuation, at is the date of removal which determines the levy.

The respondents submitted that the duties of excise are Ieviable only
upon the manufacture or production of the goods as contemplated by
Entry 84 of List I of the Seventh Schedule to the Constitution and in the
G present case when the goods were manufactured, there was no levy of
special excise duty and if there was no levy of special excise duty on the
date of their manufacture or production, it cannot attach at the stage of
removal. .The question raised for consideration was whether the goods
manufactured prior to 13.1978 but removed on or after 1.3.1978 are liable
H to the special duty of excise.
1194
~
I
'

\
COLLECTOROFCENTRALEXCJSEv. VAZIRSULTANTOBACCOCO.LID.[B.P.JEEVANREDDY,J.) 1195

Allowing the appeals filed by the assessees and dismissing the State's A
appeal, this Court

HELD : 1.1. Entry 84 of List I of the Seventh Schedule to the
Constitution empowers the Parliament to make a law providing for levy of
duties of excise on tobacco and other goods manufactured or produced in B
India. Indisputably,. the special excise duty is an excise duty and is
relatable to Entry 84. If so, levy must be on the manufacture or production
of goods. That is how the words "goods manufactured or produced in
India" in Entry 84 have been understood by this Court throughout. 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 C
goods. The 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 tliat is done at the stage of removal. Admittedly, the special
excise duty is an independent duty of excise separate and distinct from the
duties of excise levied by the Central Excise and Salt Act, 1944. This levy D
came into effect only on and from March 1, 1978 which means that the
goods produced prior to that date were not subject to such levy. If that is
so, the levy could not attach nor could it be be realised because such goods
were removed on or after March 1, 1978. [1199-B-F]

1.2. Section 3 of the Central Excise Act, cannot be read as shifting E
the levy from the stage of manufacture of production of goods to the stage
of removal. The levy is and remains upon the manufacture or production
alone. Only the collection part of it is shifted to the stage of removal. Once
this is so, the fact that the provisions of the Central Excise Act are applied
in the matter of levy and collection of special excise duty cannot and does F
not mean that wherever the Central Excise duty is payable, the special
excise duty is also payable automatically. That is so as an ordinary rule.
But insofar as the goods manufactured or produced prior to March 1, 1978
are concerned, the said rule cannot apply for the reason that there was no
levy of special excise duty on such goods at the stage and at the time of
their manufacture/production. The removal of goods is not the taxable G
event is the manufacture or production of goods. [1202-C-E]

Wallace Flour Mills Company v. Collector or Central Excise, (1989) 44
E.L.T. 598 and D.R. Kholi & Ors. v. Atul Products Ltd., [1985] 2 SCC 77,
distinguished. H
)
1196 SUPREME COURT REPORTS [1996] 2 S.C.R. ,

A Union of India & Ors. v. Modi Rubber Limited, [1986] 4 SCC 66,
referred to.

1.3. The fact that the duty was continued from 1978 to 1986, indeed
.•.
upto February 28, 1989 and also in view of the principle behind the
presumption incorporated in Section 12-B of the Central Excise Act in-
B serted by the Central Excises and Customs law (Amendment) Act, 1991 -
which is but a legislative recognition of a widely accepted presumption, the
assessees shall not be entitled to refund of any amount collected from them
by way of special excise duty on or after March 1, 1978 in respect of goods
manufactured prior to the said date. To avoid multiplicity of proceedings
C and unending legal quibbling also, it is desirable to give a quietus to this
controversy. To avoid any discriminatory consequences, it is directed that
if any amounts were due and were yet to be recovered in respect of such
goods on account of special excise duty, the same could be recovered
according to law. [1204~F-H; 1205-A]

D CIVIL APPELLATE JURISDICTION : Civil Appeal No~ 3199 of
1986 Etc. Etc.

From the Judgment and Order dated 25.3.85 of the Central Excise
Customs and Gold (Control) Appellate Tribunal, New Delhi in Appeal No.
E ED(SB)(T) 184/80D {Order No. 103/85-D).

Joseph Vellapally, Soli J. Sorabjee, A.K. Ganguli, Dileep Tandon,
V.K. Verma, S. Ganesh, Ravinder Narain, Ms. Amrita Mutra, Rajan
Narain, Vivek Gambhir, S.J. Khaitan, Aseem Mehrotra, for Khaitan & Co.,
N.V. Raghavan Iyer, Mahesh Agrawal, E.C. Agrawala for the Appearing
F parties.

The Judgment of the Court was delivered by

B.P. JEEVAN REDDY, J. Sub-section (1) of section 37 of the
Finance Act, 1978, levied a special duty of excise equal to five percent of
G the amount of excise duty chargeable on goods. The levy came into effect
on and from March 1, 1978 and was to remain in force till March 31, 1979.
Sub-section (3) provided that the said levy &hall be in addition to the duties
of excise chargeable on such goods under the law in force. Sub-section (4)
provided that the provisions of the Central Excise Act and the rules made
H thereunder shall apply, as far as may be, in relation to the levy and
\.
COLLECTOR OF CENTRAL EXCISEv. VAZIR SULTAN TOBACCO CO. LID. [B.P. JEEVAN REDDY, J.] 1197

collection of the special duties of excise levied under the said section. The A
question in this batch of appeals is whether the goods manufactured prior
to March 1, 1978 but removed on or after March 1, 1978 are liable to pay
the special duty of excise. Section 37 reads as follows :

"(1) In the case of goods chargeable with duty of excise under the
Central Excise Act as amended from time to time, read with any B
notification for the time being in force issued by the Central
Government in relation to the duty so chargeable there shall be
levied and collected a special duty of excise equal to five percent
of the amount so chargeable on such goods.

(2) Sub-section (1) shall cease to have effect after the 31st day of
c
March, 1979, except as respects things done or omitted to be done
before such cesser and section 6 of the General Clauses Act, 1897
(10of1897) shall apply upon such cesser as if the said sub-section
had then been repeated by a Central Act.
D
(3) The special duty of excise referred to in sub-section (1) shall
be in addition to any duties of excise chargeable on such goods
under the Central Excise Act or any other law for the time being
in force.

(4) The provisions of the Central Excise Act and the rules made E
thereunder, including those relating to refunds and exemptions
from duties shall, as far as may be, apply in relation to the levy
and collection of the special duties of excise leviable under this
section in respect of any goods as they apply in relation to the levy
and collection of the duties of excise on such goods under that Act F
or those rules, as the case may be."

It is not necessary to refer to the facts of the several appeals before
us. It would be enough if we state the facts in Civil Appeal No. 3199 of
1986. The respondent, M/s. Vazir Sultan Tobacco Company Limited, is
engaged in the manufacture of cigarettes. The appeal relates to the levy of G
special excise duty on cigarettes removed by the respondent between
March 1, 1978 and March 12, 1978. The respondent's case was and is that
though cleared on or after March 1, 1978, they were manufactured prior
to the said date. It contended that inasmuch as the special duty of excise
like any other duties of excise is upon the manufacture or production of H
I
(

1198 SUPREME COURT REPORTS [1996] 2 S.C.R.

A excisable articles and not upon removal, no duty is leviable upon the said
cigarettes. The authorities rejected the contention and levied the duty.
Subsequently, the respondent filed an application for refund agitating the
very same issue, which too was rejected by the Assistant Collector. An
appeal before the Collector (Appeals) proved fruitless. The respondent
then carried the matter by way of further appeal to the Tribunal. The
B matter was heard by the Special Bench of the Tribunal. They allowed the
appeal under the impugned order upholding the contention of the respon-
dent.

Sri Joseph Vellapally, learned counsel for the Revenue, assailed the
C correctness of the view taken by the Tribunal on several grounds. He
submitted that Section 37 evolved a simple formula, viz., wherever central
excise duty is payable on certain goods, special excise duty shall also be
payable at the rate of five percent of the central excise duty. Counsel
submitted that the levy and collection of the central excise duties is
D governed by Section 3 of the Central Excise and Salt Act, 1944 read with
Rules 9, 9A and 9B of the Central Excise Rules. According to these Rules,
the levy collection is at the stage of clearance of the goods from the factory
or warehouse, as the case may be. Both for the purpose of rate and
valuation, one has to look to the date of removal and it is the said date
which determines the levy, the rate and the valuation. He submitted that
E the question at issue in these appeals is concluded by the decision of this
Court in Wallace Flour Mills Company v. Collector or Central Excise, (1989)
44 E.L.T. 598. The fact that duties of excise are levied upon the production
· or manufacture of goods, the learned counsel contended, does not detract
from the clear position emerging from the provisions of the Act and the
Rules.
F
Sri Soli J. Sorabjee, learned counsel appearing for respondents,
!iUpported the reasoning and conclusion of the Tribunal. He submitted that
the. duties of excise are leviable only upon the manufacture or production
·of the goods as contemplated by Entry 84 of List-I of the Seventh Schedule
G to the Constitution. The mere fact that, for the sake of convenience, the
duty is collected at the stage of removal cannot and does not change the
character of the tax. It is upon the manufacture or production of goods
and not on any other basis. The special excise duty is a separate and
distinct levy from the Central Excise. It is levied for the first time by
H Section 37 of the Finance Act, 1978 on and with effect from March 1, 1978.
\
\

COLLECTOR OF CENTRAL EXCISE v. VAZIR SULTAN TOBACCO CO. LID. [B.P. JEEVAN REDDY, J.] 1199

Counsel submitted that when the goods in question were manufactured, A
there was no levy of special excise duty. If there is no levy of special excise
duty on the date of their manufacture or production, it cannot attach at
the stage of removal. Saying otherwise, the learned counsel contended,
would detract from the very concept of duties of excise. Learned couusel
also relied upon certain decisions both of this Court and High Courts in B
support of his submission.

We are inclined to agree with Sri Sorabjee. Entry 84 of list-I of the
Seventh Schedule to the Constitution empowers the Parliament to make a
law providing for levy of duties of excise on tobacco and other goods
manufactured or produced in India (except, of course, certain goods C
mentioned therein). Indisputably, the special excise duty is an excise duty
and is relatable to Entry 84. If so, levy must be on the manufacture or
production of goods. That is now the words "goods manufactured or
produced in India" in Entry 84 have been understood by this Court
throughout. 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 D
removal of the said goods. The 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 collecti.on that is done at the stage of removal.
Admittedly, the special excise duty is an independent duty of excise
separate and distinct from the duties of excise levied by the Central Excise E
and Salt Act, 1944. This levy came into effect only on and from March 1,
1978 which means that the goods produced prior to that date were not
subject to such levy. If that is so, the levy cannot attach nor can it be
realised because such goods are removed on or after March 1, 1978. The
provisions of the Central Excise Act and the Rules, in our opinion, do not
say otherwise. F

Section 3(1) of the Central Excise Act says:

(1) There shall be levied and collected in such manner as may be
prescribed duties of excise on all excisable goods other than salt G

- which are produced or manufactured in India and a duty on salt
manufactured in, or imported by land into, any part of India as,
and at the rates, set forth in the First Schedule."

The expression "prescribed" is defined in clause (g) of Section 2 to
mean prescribed by Rules made under the Act. H
1200 SUPREME COURT REPORTS [1996] 2 S.C.R.
I
A It is evident that the words "in such manner as may be prescribed"
qualify the word "collected" and not the word "levied". While the levy is
created by Section 3 itself, the collection of the duty is left to be regulated
by the Rules made under the Act.

Rule 9 and 9-A are relevant for our purpose. Rule 9(1) provides that:
B
"No excisable goods shall be removed from any place where th~y
are produced, cured or manufactured or any premises appurtenant
thereto, which may be specified by the Collector in this behalf
whether for consumption, export or manufacture of any other
c commodity in or outside such place, until the excise duty leviable
thereon has been paid at such place and in such manner as is
prescribed in these Rules or as the Collector may require and
except on presentation of an application in the proper form_ and
on obtaining the permission of the proper officer on the form."

D Rule 9 says that "no excisable goods" should be removed from the
place their manufacture until excise duty leviable thereon has been paid "at
such place and in such manner" as is prescribed in these Rules. It is
relevant to notice that the Rule specifically uses the expression "excisable
goods" - and not "goods" - and for good•reason. The expression "excisable
E goods" has been defined in clause (d) of Section 2 to mean "goods specified
in the First Schedule as being subject to a duty of excise and includes salt." .
The goods removed must be excisable goods first - which means that the
goods were subject to the levy of duty before their removal. Rule 9-A is to
the same effect. Sub-rules (1) to (3-A) of Rule 9-A may be set out in their
entirety in view of the reliance placed by bo.th the counsel upon them. They
F read:

"(1) The rate of duty and tariff valuation, if any, applicable to any
excisable goods shall be the rate and valuation in force.

(i) in the case of goods removed from the premises of a curer
G on payment of duty, on the date on which the duty is as-
sessed; and

(ii) the case of goods removed from a factory or a warehouse
subject to sub-rules (2), (3) and (3)(a), on the date of the
-
'

H actual removal of such g?ods from such factory or wareh<mse.
\
l
' COLLECTOROFCENTRALEXCISEv. VAZIRSULTANTOBACCOCO.L'ID.[B.P.JEEVANREDDY,J.] 1201

(2) If the goods have previously been removed from a warehouse A
to be re-warehoused, and the duty is paid on such goods without
their being re-warehoused the rate and valuation, if any, applicable
thereto shall be the ra.te and valuation, if any, in force on the date
on which duty is paid or, if the duty is paid though an account-
current maintained with the Collector under rule 9, on the date on B
which an application in the proper form is delivered to the officer-
in-charge of the warehouse from which the goods were removed.

(3) Where any person who has removed excisable goods for export
in bond fails to export or to furnish proof of such export to the
satisfaction of the Collector or diverts the goods for home con- C
sumption, the rate of duty leviable and the tariff valuation, if any,
in respect of such goods shall be the rate and valuation in force
on the date on which the duty is paid.

(3A) Where duty becomes chargeable on any material or com-
ponent parts in respect of which credit of duty had been allowed D
under rule 56A, the rate of duty leviable and the tariff valuation,
if any, in respect of such material or component parts shall be the
rate and valuation in force on the date on which the duty is paid."

According to sub-rule (1) of Rule 9-A, the rate of duty (part from tariff E
valuation) applicable to any "excisable goods" shall be the rate in force on
the date of actual removal of such goods from the factory or the warehouse,
as the case may be. This is the general rule. Sub-rules (2), (3) and (3A)
provide certain exceptional situations which are not relevant for the pur~
pose of these appeals. It is the general rule contained in sub-rule (1) - and
in particular clause (ii) ~f sub-rule (1) - that is relevant here. In other F
words, the rate of duty as well as the valuation of goods shall be the rate
and the valuation as on the date of actual "removal". This rule too opens
with the expression "excisable goods".

Sri Vellapally contended that if the above interpretation is adopted,
it may lead to an enigmatic situation. He explains his apprehension thus : G
the special excise duty is levied only for the period March 1, 1978 to
February 28, 1979; Take a case, where the goods are manufactured on or
before February 28, 1979 are removed on or after March 1, 1979, what
would be the rate of duty ( ~nd which would be relevant date for valuation
purposes); the assessee may say that on the date of removal, neither the H
J
j
f

1202 SUPREME COURT REPORTS [1996] 2 S.C.R.

A levy is in force nor are Rules 9 and 9A and, hence, he need not pay any
special excise duty on such goods. We do not see any valid basis for this
apprehension. In the situation contemplated by Sri Vellapally, the date of
removal has to be taken as February 28, 1979. It cannot be otherwise. If
Rules 9 and 9A are held inapplicable, it would logically follow that the
moment the goods are manufactured, the levy becomes payable and, in the
B circumstances, the last date of levy can reasonably be taken to be the date
of removal. Of course, an absurd consequence would follow if it is held .•
that in the above situation, no special excise duty is payable if the removal
is on or after March 1, 1979. Such an absurd consequence could not be
presumed to have been intended by the Parliament.
c
We are of the opinion that Section 3 cannot be read as shifting the
levy from the stage of.manufacture of production of goods to the stage of
r~moval. The levy is and remains upon the manufacture or production
alone. Only the collection part of it is shifted to the stage of removal,. Once
D this is so, the fact that the provisions of the Central Excise Act are applied
in the matter or levy and collection of special excise duty cannot and does
not mean that wherever the Central Excise duty is payable, the special
excise duty is also payable automatically. That is so as an ordinary rule.
But insofar as the goods manufactured or produced prior to March 1, 1978
are concerned, the said rule cannot apply for the reason that there was no
E levy of special excise duty on such goods at the stage and at the time of
their manufacture/production. The removal of goods is not the taxable
event. Taxable event is the manufacture or production of goods

In our opinion, the decision in Wallance Flour Mills does not lay
F down a contrary proposition, - neither does it support the contention of Sri
Vellapally. That was a case were the goods were excisable goods prior to
March 1, 1987, though by virtue of an exemption notification, the rate of
duty was nil. This does not mean that they were not excisable goods. They
were excisable goods. Nil rate of duty is also a rate of duty. With effect
from March 1, 1987, the said goods become excisable to duty at the rate
G of fifteen percent ad valorem. It is in the above circumstances that the
Court held, on the basis of Section 3 and Rule 9-A, that though the goods
were produced or manufactured prior to March 1, 1987, still they attracted
duty at the rate prevailing on the date of their removal, i.e., fifteen percent.
Para-7 clearly brings out the ratio of the said decision. The relevant portion
H in Para 7 reads :
\
COLLECTOR OF CENTRAL EXCISEv. VAZ!R SULTAN TOBACCO CO. LTD. [B.P. JEEVAN REDDY, J.] 1203

"Excise is a duty on manufacture or production. But the realisation A
of the duty may be postponed for administrative convenience to
the date of removal of goods from the factory. Rule 9A of the said
mies merely does that. That is the scheme of the Act. It does not,
in our opinion, make removal be the taxable event. The taxable
event is the manufacture. But the liability to pay the duty is B
postponed till the time of removal under Rule 9A of the said Rules.
In this connection, reference may be made to the decision of the
Karnataka High Court in Kamataka Cement Pipe Factory v. Super-
intendent of Central Excise, (1986) 23 E.L.T. 313. Were it was
decided that the words 'as being subject to a duty of excise' C
appearing in Section 2(d) of the Act are only descriptive of the
goods and not to the actual levy. 'Excisable good', it was held, do
not become non-excisable goods merely by the reason of the
exemption given under a notification. This view was also taken by
the Madras High Court in Tamil Nadu (Madras State) Handloom
D
Weavers Co-operative Society Ltd. v. Assistant Collector of Central
Excise, (1978) 2 E.L.T. (J.57). On the basis of Rule 9A of the said
rules, t~e Central Excise authorities were within the competence
to apply the rate prevailing on the the date of removal. We are of
the opinion that even though the taxable event is the manufacture
or the production of an excisable article, the duty can be levied E
and collected at a later date for administrative convenience."

Sri Sorabjee relied strongly upon the decision of this Court in D.R.
Kholi & Ors. Y. Atul Products Ltd., [1985] 2 SCC 77. But that was a case
which turned on its peculiar facts and the main discussion in that case was F
with respect to the applicability of Rules 10 and 10-A as in force at the
relevant time. The Court found that the Revenue was virtually inveigled
into a trap by the respondent suggesting that it was too eager to pay excise
duty on certain goods which to the knowledge of the respondent were not
liable for excise duty with the object of getting the benefit of the right to
clear its products which were liable for higher excise duty (because of their G
increased value) without paying any duty at all. In those facts, the question
of applicability of Rule 10 and for that matter, Rule 10-A arose. It was held
that while Rule 10 was not applicable, Rule 10-A was attracted.

Sri SQrabjee also relied upon the decision of this Court in Union of H
j
1204 SUPREME COURT REPORTS [1996] 2 S.C.R.

A India & Ors. v. Modi Rubber Limited, [1986] 4 SCC 66 to emphasise his
submission that the central excise duties leviable under the Central Excise
and Salt Act, 1944 are distinct and different from the special duty, addi-
tional duty or any other duty of excise levied under any other Parliament
enactment. Since the aforesaid proposition is not in dispute, it is not
necessary to refer to the facts in the said decision.
B
Before we conclude, it is necessary to notice a few facts having a
bearing upon the relief to be granted in these matters. The special excise
duty was being levied from 1963 upto 1971 by various Finance Acts passed
from time to time. It was discontinued from 1972 until 1978 when it was
c revived by the Finance Act, 1978. Thereafter, it was being levied from year
to year by annual Finance Act. The provisions of these Finance Acts,
insofar as the levy special excise. duty is concerned, are identical. In the
Finance Acts of 1987 and 1988, however, the rate of special excise duty was
raised to ten percent but then notifications were issued exempting the duty
D on all goods in toto. In other words, with effect from March 1, 1986, there
was, in effect; no special excise duty until February 28, 1988. With effect
from March 1, 1988, the duty was again imposed @ 5%, while exempting
certain essential commodities and other priority item from the said impost.
We have held hereinabove that the goods manufactured/produced before
E March 1, 1978 but cleared on or after March 1, 1978 are not exigible to
special excise duty. At the same time, we have also expressed the view that
the goods manufactured/produced on or before February 28, 1979 but
cleared thereafter would be liable to pay the said duty at the rate and
valuation in force as on February 28, 1979. In the light of the fact that t~
duty was continued from 1978 to 1986, indeed upto February 28, 1989 and
F
also in view of the principle behind the presumption incorporated in
Section 12-B of the Central Excise Act inserted by the Central Excises and
Customs. Law (Amendment) Act, 1991 - which is but a legislative recogni-
tion of a widely accepted presumption - we think it appropriate to direct
that the assessees shall not be entitled to refund of any amount collected
G from them by way of special excise duty on or after March 1, 1978 in
respect of goods manufactured prior to the said date. Looked at from the
standpoint of avoidance of multiplicity of proceedings and of unending ·
'legal quibbling also, it is desirable to give a quietus to thiS controversy. To
avoid any discriminatory consequences, it is further directed that if any /
H amount are due and are yet to. be recovered in respect of such goods on
\ COLLECTOR OF CENTRAL EXCISE v. VAZIR SULTAN TOBACCO CO. LTD. [B.P. JEEVAN REDDY, J.] 1205

account of special excise duty, the same can be recovered according to law. A

For the above reasons, the appeals filed by the appellant-State are
dismissed and the appeals filed by the respondents-assessees are allowed
subject to the above directions. There shall be no order as to costs.

R.A. State's appeal dismissed and assessees appeal allowed.