JUDGMENT
G.B. Patnaik, J.
1. Petitioner No. 1, a manufacturer of paper, and petitioner No. 2, its shareholder, have filed the writ application with the prayer to direct the opposite parties to approve the revised price list submitted by the petitioner-company and to complete and finalise the assessment on the said revised monthly return in Form R.T. 12 by levying duty on manufacturing cost and manufacturing profit after excluding the post-manufacturing cost and expenses and to refund the duties paid by the petitioner on a mistaken notion. It has further been prayed that let it be declared that
Section 4 of the Central Excise and Salt Act, 1944, purports to levy duty only on the cost of manufacturing and not on any post-manufacturing cost.
2. The petitioner’s case, briefly stated, is that as a licensed manufacturer of paper, the petitioner-company was paying the duty on the goods prior to 1975 with reference to the weight of the goods which was the prevalent rule in the field. Section 4 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the “Act”) was amended and under the amended provision, with effect from 16th of March, 1976, the duty of excise on the manufacture of paper was made on ad valorem basis though under the pre-amended provision the duty was payable at the rate set forth in item No. 17 of the First Schedule which was on the basis of weight. Section 4, as it stood prior to its amendment in October, 1975, is quoted here in below in extenso:
4. Determination of value for the purpose of duty–Where under this Act any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be:
(a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production or if a wholesale market does not exist for such articles at such place at the nearest place where such market exists, or
(b) where such price is not ascertainable the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production, or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto.
Explanation: In determining the price of any article under this section, no abatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid.
The said provision after amendment reads thus:–
4.Valuation of excisable goods for purposes of charging of duty of excise.–(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be–
(a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale:
Provided that
(i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in Clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers;
(ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in Clause (iii) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof;
(iii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related person), who sell such goods in retail.
(b) where the normal price of such goods is not ascertainable for the reason that
such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof
determined in such manner as may be prescribed.
(2) Where in relation to excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price.
(3) The provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed under
Sub-section (2) of Section 3.
(4)For the purposes of this section-
(a) ‘assessee’ means the person who is liable to pay the duty of excise under this Act and includes his agent:–
(b) ‘place of removal’ means–
(i) a factory or any other place or premises of production or manufacture of the excisable goods; or
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty,
from where such goods are removed;
(c) ‘related person’ means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee, and any sub-distributor of such distributor.
Explanation.– In this clause ‘holding company’, ‘subsidiary company and ‘relative’ have the same meanings as in the Companies Act, 1956 (1 of 1956);
(d) ‘value’, in relation to any excisable” goods,
(i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee.
Explanation. In this sub-clause ‘packing’ means the wrapper, container, bobbin, pirn, spool, reel or warp beam or any other thing in which or on which the excisable goods are wrapped, contained or wound;
(ii) does not include the amount of the duty of excise, sales-tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount, (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale.
(e) ‘wholesale trade’ means sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase their requirements otherwise than in retail.
According to the petitioners’ case, under the amended provisions, the excise duty leviable on paper is on its value and the said value cannot include the post-manufacturing and other expenses incurred subsequent to the manufacture. The Central excise authorities required the petitioner-company to file price list of the goods manufactured by it for determination of the assessable value and in the price list so filed after March 16, 1976, the petitioner not knowing the correct legal position declared the value in respect of the products not at manufacturing cost but also including other post-manufacturing expenses. The said list was also duly approved by the central excise authorities, which is also contrary to law. In accordance with the approved list, the petitioner has been furnishing monthly returns in form R.T.12 and provisional assessments have been made on the basis of the said return though no final assessment has been made for the period subsequent to March 16, 1976. The petitioner realising that it has been paying more duty than that is leviable on its products filed a revised list for approval of the excise authorities. The petitioner also filed revised monthly returns for the period April, 1976 to March 1980, and claimed refund of the money which it has paid in excess on a mistaken view of the law and which the opposite parties are not entitled to collect under the law. As no further action was taken by the opposite parties on the petitioner’s application for approval of the revised list and passing any order on the application for refund, the petitioner approached this Court. In the meantime, the petitioner also filed some appeal against the price list and claimed certain discount before the Collector (Appeals) and the Collector (Appeals) by his order dated 16.12.1980 as well as by order dated 8.4.1987 allowed some reliefs to the petitioner, but notwithstanding the same, the petitioner’s application for refund after making final assessment on R.T.12 returns, has not been disposed of by the opposite parties.
3. On behalf of the opposite parties counter affidavit has been filed wherein the stand is that the amended provision of section 4 of the Act does not alter the basis of levy of excise duty and in view of the decision of the Supreme Court in the case of Union of India and Ors. etc., etc. v. Bombay Tyre International Ltd. and etc., etc. [1984] 2 ECC 102 (SC) AIR. 1984 Supreme Court, 420, levy in the present case has been correctly done and the question of approving a revised list or refunding the money paid does not arise. Though it was admitted in the counter affidavit that R.T.12 returns
filed by the petitioner are still pending finalisation, yet according to the opposite parties, the said finalisation is not for allowing discount claimed by the petitioner and since the petitioner itself filed returns and paid duties before removal of goods on self-assessment basis, the question of refunding any amount to the petitioner does not arise. It was admitted in the counter affidavit that in view of the pendency of the writ application, the adjudicating authority had not passed any final order on the application for refund as well as on all other applications filed by the petitioner.
4. In course of hearing of the writ application, Mr. Mohanti, the Learned Counsel for the petitioners, though made lengthy submissions with reference to the provisions of the Act and the Rules in the matter of payment of duty on post-manufacturing costs and expenses, yet later on submitted that the petitioner would be satisfied if keeping these points open to be urged before the excise authority, a direction is given to dispose of the petitioner’s application for refund as well as the application for approval of the revised list and also final assessment on the R.T.12 returns. It is admitted in the counter affidavit on behalf of the opposite parties that the adjudicating authority has not taken any final decision on the applications of the petitioner in view of the pendency of the writ application. In our opinion, there can be no objection for giving such a direction to the opposite parties without expressing any opinion on the merits of the contention of the petitioner and leaving it open for the petitioner to urge those contentions before the excise authorities. We have no doubt in our mind that while disposing of the petitioner’s application, the excise authorities will give an opportunity of hearing to the petitioner’s counsel and also will take into consideration the orders passed by the Collector (Appeals) dated 8.4.1987 and dated 16.12.1980, by which orders the Collector has allowed some discount to the petitioner and also gave some reliefs in respect of the price list. In the premises, as aforesaid, we are not expressing any opinion on the merits of the rival contentions, but we call upon the opposite party No. 3, the Assistant Collector of Central Excise and Customs, Sambalpur Division, to dispose of the petitioner’s application for refund and pass final order on the petitioner’s application for assessment on R.T. 12 returns in accordance with law bearing in mind the observations made by us earlier in this judgment and the same may be done within a period of three months from the date of receipt of this order.
This writ application is allowed with the aforesaid direction, but without any order as to costs.
A.K. Padhi, J.
I agree.