Wallace Flour Mills Co. Ltd. vs Collector Of C. Ex.

on 9/5/1989

ORDER

G.P. Agarwal, Member (J)

1. This appeal is directed against the impugned order-in-appeal dated 1-3-1988.

2. Brief facts leading to the present appeal are that the appellants are manufacturers of
various types of products such as Sapaghetti, Macaroni, Vermicelli, etc., falling under
Tariff Item No. 1902.10 of the Central Excise Tariff Act. They filed their classification list
No. 38/87 effective from 1-3-1987 claiming that their pre-budget stocks of non-excisable
goods namely various types of food products declared in the classification list were
entitled to duty free clearance being pre-budget stock. However, the Assistant Collector
concluded that the question of clearing pre-budget stock duty free did not arise because
these products were excisable though exempted from duty. Against the said order of the
Assistant Collector, the appellants filed their appeal before the Col-ledtor of Central
Excise (Appeals), Bombay but without any success. Hence the present appeal.

3. We have heard Shri N. Kothare, the learned Counsel for the appellants and. Smt. V.
Zutshi, the learned SDR for the respondent. Shri Kothare, learned Counsel for the
appellants submitted that the aforesaid products manufactured by the appellants were
not leviable to duty under Heading 1902.10 until 28-2-1987 and the said products were
made dutiable only by Finance Bill, 1987-88 with effect from 1-3-1987. He further
submitted that on 27-2-1987, the Appellants had in their factory a stock of the said
products which were fully manufactured, packed and ready for sale and the inventory of
the said stock (hereinafter called pre-budget stock) was prepared by the Supdt. of
Central Excise on 1-3-1987. He also submitted that thereafter the appellants filed their
Classification List in Form I showing the verified and properly authenticated "Pre-
Budget Stocks" for approval to the Assistant Collector of Central Excise. However, the
Assistant Collector by his Memorandum of Approval dated 23-7-1987 returned the said
Classification List back to the appellants with an erroneous remark that "these items
were already excisable but exempted, the question of pre-excise stock does not arise".
On appeal the Collector (Appeals) also held accordingly. In this background he
submitted that both the authorities below erred in not allowing the appellants to remove
the pre-budgetary stocks without payment of duty. In a nutshell his contention was that
the goods forming "pre-budget stocks were manufactured the, same were not excisable
goods".