Enhancement of duty through amendment to Finance Bill - Effective from when?
VIDE clause 84 of the Finance Bill 2008, the following amendment to Central Excise Tariff was proposed:
"In the First Schedule to Central Excise Tariff Act,-
(1) in Chapter 24,-
(i) in tariff item 2402 20 10, for the entry in column (4), the entry 'Rs.659 per thousand' shall be substituted;
(ii) in tariff item 2402 20 20, for the entry in column (4), the entry 'Rs.1068 per thousand' shall be substituted;
(2) in Chapter 25, in tariff item 2523 10 00, for the entry in column (4), the entry 'Rs.450 per tonne' shall be substituted;
(3) in Chapter 39, in NOTE 16, for the word' metallization', the words 'metallization or lamination or lacquering' shall be substituted;
(4) in Chapter 85, in tariff item 8523 80 20, for the entry in column (4), the entry '12%' shall be substituted."
Under Provisional Collection of Taxes Act, 1931, the above clause was declared to be effective immediately.
However, on 29.04.2008, the FM during the debate of the Finance Bill, proposed some amendments, which include enhancement of duty on Cement to Rs 900/- PMT.
In the amended Finance Bill, the amendments to the First Schedule to the Central Excise Tariff were made vide clause 89. (In place of clause 84 of the unamended Bill)
Now, a Commissioner demanded enhanced rate of duty of Rs 900/- from 01.03.2008 till the enactment of the Bill by applying the declaration under PCTA.
The Tribunal had no hesitation to set aside the demand on the ground that there was no declaration under PCTA about clause 89 of the Amended Finance Bill.
We had mentioned this in 01.05.2008 and requested the Board to give a clarification at the earliest to avoid Show Cause Notices flying around, but they preferred the SCN route!
An almost similar issue pertaining to cigarettes was also covered by us in DDT 1935 with the caption ‘Going up in smoke - Central Excise duty on cigarettes' .