1.     Attention is drawn to Notification 162/86-CE dated 1/3/86, as it was prior to 28/2/1993 which granted concessional rate of duty to saloon cars provided a certificate was required to be furnished to the satisfaction of the Assistant Collector, (now Assistance Commissioner) from the State Transport Authority to the effect that such saloon cars has been registered for use solely as a taxi, within three months from the date of removal or such extended period as the Assistant Collector may allow.

2.     A doubt has arisen regarding the relevant date for determination of the rate of duty and tariff valuation under Rule 9A of the Central Excise Rule, 1944 where the saloon cars were removed at concessional rate of duty under Notification 162/86-CE dated 1/3/86 as taxis but could not be registered as taxis, as stipulated in the aforesaid notification, whether such saloon cars should discharge duty in terms of sub-rule 1 (ii) or under Sub-rule (5) of Rule 9A of the Central Excise Rules, 1944.

3.     The matter has been examined by the Board.

4.     In this connection, Circular No. 14/80-CX.6 (F.No. 207/2/80-CX.6) dated 24/4/1980 may be referred (copy enclosed) wherein it has been clarified that in cases of unauthorised, illegal or clandestine removals, duty will be payable in terms of sub-rule (5) of Rule 9A, not otherwise.

5.     In the instant case where the saloon cars were cleared in accordance with the provisions of an exemption notification cannot be regarded as unauthorised, illegal or clandestine removals so as to attract provisions of sub-rule (5) of Rule 9A for determination of date for ratio of duty and tariff valuation though certain conditions thereof, were not fulfilled. It is therefore, clarified that such removals shall more appropriately be governed by sub-rule (1) (ii) of Rule 9A of the Central Excise Rules, 1944 and the relevant date for determination of rate of duty and tariff valuation shall be the date on which such saloon cars were removed from the factory or the warehouse, as the cases may be, and the rate of duty and tariff valuation shall be the rate and tariff valuation in force on that date.

Central Excise - Applicability of Sub-rule (1) or Sub-rule (5) of rule - 9-A in the case of clandestine removals

Circular No. 14 dated 24^th April 1980

I am directed to say that the question whether in the case of clandestine removals of dutiable excisable goods without observing Central Excise formalities demands are to be raised in terms of sub-rule 1 (ii) or sub-rule (5) of rule 9-A, where the date of clandestine removal for the factory etc. can otherwise be established, has been examined by the Board in consultation with the Ministry of Law. The said Ministry has opined that ".............. when the goods are clandestinely removed, it cannot be said that the goods have been cleared after the payment of duty. The expression cleared in rule 9-A has reference to clearance after payment of duty and with gate pass. That being the position, all cases of unauthorised and illegal removal of excisable goods should fall under the residuary provisions, namely rule 9-A (5) which provides that in such cases that rate of duty and tariff valuation, if any, applicable to excisable goods shall be the rate and valuation in force, on the date on which duty is paid."

2.     It may be further clarified that the expression "cleared" used in rule 9A (1) (ii) cover even clearances made without payment of duty under bond as the words "on payment of duty" do not occur in rule 9A (1) (ii). In other words, where the goods have been cleared in accordance with the provisions of the rules either with or without payment of duty, rule 9A (1) (ii) will be attracted, while in case of unauthorised, illegal and clandestine removal, duty will be payable in terms of rule 9 A (5).