It is the night before (or more accurately, the morning of) my Indirect Tax viva voce, and I am trying to come to grips with reams of notes on what must surely be one of the driest subjects taught in law school. Around 3 am, just as I am warming to my task, the following Kafkaesque provision comes to my notice.
Rule 7 of the Central Excise Rules, 1944 states that the producer or manufacturer of excisable goods is liable to pay the duty leviable on such goods. The proviso to this rule, intriguingly states that nothing contained in the rule shall apply to khandsari molasses. In other words, for khandsari molasses, alone among the ranks of manufactured or produced goods, the excise duty is to be paid by the purchaser and not the manufacturer.
Why have an exception to the perfectly sensible rule that excise duty should be paid by the manufacturer? Why make it applicable to khandsari molasses alone? What, when it comes to that, are khandsari molasses?
I did what any red-blooded law student would do under the circumstances: put away my notes and directed my attention to answering these questions. When I eventually found a case (Ranson Industries v. Union of India) where the constitutionality of the exception was challenged, I thought my questions would be answered at last. But incredibly, the Division Bench of the J&K High Court, in a 5,070-word judgment, never once saw fit to answer the one question anyone might reasonably be interested in: Why has a special provision been made for khandsari molasses? The closest they came to an explanation was the lame-ass justification: “A duty on home produced goods will obviously be imposed at the stage which the authorities find to be the most convenient and the most lucrative.” Judges…
Anyhow, my researches led me to the Wikipedia article on molasses, which took me to Carob Tree, and thence to Simon bar Yochai and…well, you know how it goes. For the exam, the teacher asked me to speak on “taxable event”. On any other day, I’d have knocked ’em dead with my gripping account of the In Re Sea Customs Act case. As it happens, eyewitnesses say that my performance consisted of rubbing my eyes and mumbling brokenly about excise duty and molasses.
8 comments:
Rule 4(2) of CE rules discusses the duty liability in case of molasses. There are other exceptions as well such as in the case of warehousing (Rule 20 of CE Rules).
Ah nice to have you back. Missed all your random rumblings.
mmmm...molasses...sticky...sweet. haven't had anything sweet in a long time. must save money(or easier, ask thatani for it) for chocolate fantasy during break someday. and oh yaaay! my b'day cake! my b'day's just a week away!!!
but what are khandsari molasses??
I have never once seen you mumble brokenly about anything... be it in the viva or anywhere else... so stop lying! :-)
also... i love indirect tax....or more accurately, i love shiela rai and so love whatever she teaches! - and no i have not lost my mind.. thank you very much!
@ayan: Well the warehousing exception applies to all kinds of products. It's only Khandsari molasses that have been singled out as a product per se.
@saha: Well, it's nice to be back, too.
@pratiti: Who knows, kid. Who knows?
@indecision: You love it when we have to read twelve cases which say the exact same thing?
the rubbing my eyes bit..is just to draw some attention....sound funny etc...such a wannnabe I tell yu!!!
umm... actually I don't mind the cases very much.. since,u see, i do not end up remembering even half of them. So they all serve as a mildly interesting first read and then i proceed to forget all about them.. :-)
btw... how was your exam?
@mrunmayee: Congratulations. You've got me figured out.
@indecision: Kick-ass :)
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