Law: Excise Duty on Production Capacity (Aerated Water) Rules, 1990

Section: R-7,7A(3),10(2)

(a) Excise Duty on Production Capacity (Aerated Waters) Rules, 1990----Rr. 7-A(3) & 10(2)---Demand of excise duty and additional tax for period prior to actual installation of permitted spouts---Central Board of Revenue through letter, dated 27-2-1993 allowed assessee to install additional spouts w.e.f. 1-1-1993---Such spouts were actually installed w.e.f. 1-4-1993---Revenue raised demand of excise duty and additional tax w.e.f. 1-1-1993 to 31-3-1993---Validity---Board having granted permission on 27-2-1993 could not demand duty two months prior to grant of such permission ---Assessee could not be required to pay tax even before a taxable activity had come into being---Tax-payer, irrespective of his consent, could not be burdened with payment of duty before machinery to be used in taxable activity was actually installed---Machinery had actually been installed only after such permission---High Court accepted appeal and set aside demand of excise duty for impugned period alongwith additional tax and penalty. (b) Taxation--- ---- Assessee could not be required to pay tax even before a taxable activity had come into being. (c) Taxation--- ----Tax-payer, irrespective of his consent, could not be burdened with payment of duty before machinery to be used in taxable activity was actually installed. (d) Interpretation of statutes--- ---Fiscal statute---Where two equally acceptable interpretations of a provision were possible, then the one favourable to tax-payer should be adopted. ORDER NASIM SIKANDAR, J.---Through this single order we intend to dispose of Customs Appeals Nos. 380 and 381 of 2001. 2. These cross appeals assail the impugned order recorded by the Customs, Excise and Sales Tax Appellate Tribunal, Lahore on 13-11-2001. 3. The assessee-appellant is a private limited company and is engaged in, bottling and sale of Aerated water. It appears that on 18-11-1992 they approached the Central Board of Revenue for their permission to add 10 spouts alongwith franchise to be purchased from Messrs Jamrud Industries (Pvt.) Limited. The relevant part of their letter reads as under:-- "Bottling operations at Peshawar may not be feasible. Therefore, we shall start…

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