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1. In this petition, under Articles 226 and 227 of the Constitution ofIndia, the petitioner, prays for a writ of Certiorari, or any otherappropriate writ or order, quashing the levy made by the First Respondenton 16-11-1959 as well as the order of the Second respondent in appealmade on 14-10-1960.
2. The petitioner is a private limitd company manufactring ElectricBatteries. The Co. was stated in 1955. It’s factory as well as itsoffice (both housed in the same building)is located just outside thelimited of Bangalore City.
3. The facts found by the Assistant Collector of Central ExciseBangalore, and affirmed by the Collector of Central Excise Bangalore, andnot disputed in teh affidavit filed in this Court by the ptitioner, areas follows: The petitioner (Messrs. Amco Batteries Limited, Bangalore)manufactures Electric Storage Batteries under three trade marks i.e.”AMCO”, “OAKES” and “SHPEED”, “AMCO” Batteries are maketed through anetwork of distributors, about fourteen in number, each of whom is thesole distributor for a specified zone in India; Messrs. Addison andCompany (P) Ltd., Bangalore, are the distributors for the Mysore Stateand parts of Andhra. Messrs. Addison and Co. (P) Ltd., Madras, are thedistributors for the aresas comprised in the old Madras State and alsoareas included in the former State of Cochin and Travancore. The Addison& Co., Bangalore and Madras consume a major portion of the output of AmcoBatteries. “OAKEN” Batteries are manufactured b the petitioner, solelyfor Messrs. George Oakes (P) Lt., Bombay. Thelatter marked theseBatteries in bangalore through Messrs George Oakes (P) Ltd., Bangalaore,M/s George Oakes (P) Ltd., Bangalore, have their own net work ofwholesale dealers through whom they push forward their sales of “Oakes”Batteries. “Speed” Batteries were bing manufactued solely for seepd AWay Limited, Madras, nut for sometime now these Batteries have not beenmanufactured. For the purpose of levying excise duty, in the past, thewholesale cash price of these batteries were determined on the basis ofthe exfactory price charged by the petitioner to ites distributors. Itis alleged on behalf of the petitione and not denied by the respondentsthat the ex- factory prices charged to all the distributors were and arethe same.
4. ON 1-3-1956, 6-5-1956 and 21-1-1951, the petitioner declared thewholesale price fixed by it for its carious products as requied by theCentral Excise Rules and the same was intimated to the Authorities. Thewholesale price so declared was accepted and excise duty leviedaccordingly till 10-12-1958. In about December, 1958, the exciseauthorities intimated to the petitioner that the “wholesale price”declared by the petitioner cannot be accepted as correct as in their viewthe wholesale market price at Bangalore is very much more than thewholesale price declared by the petitioner. This conclusion was arrivedat on the ground that the Batteries manufactued by the petitioner havenot got a wholesale market at the factory site and therefore thewholesale cash price ruling at Bangalore have to be taken intoconsideration. It is said that the wholesale price charged by thepetitioner to its distributors are very much less than the wholesaleprice prevailing a bangalore even after deducting the distributo’sdiscount and incidental expenses. Incidentally it was mationed “further,these two firms [M/s Addsion & Co., (P) Ltd., and M/s George Oakes (P)Ltd.] are associate firms with Messrs Amco Batteries Limited”. We areunable to find out the real signigicance of this obervation. We areinformed that the aforementioned two firms as well as the petitioner firmhave some common directors. But it is not the case of the Central Exciseauthoritiesthat on that ground any concession was being shown to thesefirms. It is admitted that tsame Ex-facotyr price was and is charged toall the fourteen distributors. The goods manufactured by the petitionerare solely distributed by the aorementioned distributors, particulaarterritory bing as igned to each distributor.
5. In the instant case the “wholesale case price” of the Batteries inquestion was not determined with reference to the sale of other batteriesmanufactured by other Companies. It was determined on the basis of theprice charged by distributor like Messrs. Addison & Co, (P) Ltd and M/sGeorge Oakes (P) Ltd, at Bangalore.
6. But in determining the “wholesale cash price” of the Batteries inquestion on the relevant dates, the excise authories have solely reliedon the “wholesale cash price” charged by Messrs. Addison & Co, (P) Ltdand M/s George Oakes (P) Ltd., to their wholesale customers. No deductionappears to have been given for the overhead charges and the incidentexpenses incurred by Messrs. Addison & Co. (P) Ltd., and George Oakes (P)Ltd. Further, on provision appears t have been made for the discount towhich these com-panies whould have been ordinarily entitled to. The orderpassed by the authorities does not show that the “wholesale cash price”prevailing in Bangalore on the dated the goods were moved outof theFactory or the price privailing at about tat time, were taken intoconsideration. As observed in the National Tobacco Co.’s case, thedetermination of the value for the purpose of duty should be vbased onthe “wholesale cash price” for which the article in question or anarticle of the like kind and quality is sold or is capable of being soldat the time and at the location of the factory. If the ExciseAuthorities depend on the price list issued by Messrs. Addision and Co(P) Ltd., and George Oakes the relevant dates or at about those datesFurther , from the price shown in those list, necessary dedctions willhave to be made. In this connection I may usefully quote a passage fromthe decision in The National Tabacco Co’s case. The relevant passage isavailable at page 481 of the report. It reads thus:
I may add that the instant case in determining the wholesale cahe price”of the Batteries in question,l the authorities will have to deduct theexpenses that were likely to have been incurred by Messrs. Addision & Co.(P) Ltd., and George Oakes (P) Ltd., and the dicounts to which they areordinarily entitled to. Quite clearly all those factors were not borne in mind by the Excise Authorities while making the impugned levy.
7. The contention of Shri V.Krishnamurthy, the learned Counsel for thepetitioner, that the impugened order is hit by Article 14 of theConsitution becuase differnt Collectors have adopeted different basis forassessment and that no uniform rule has been applied in the matte oflevying excise duties on Batteries, deserve on serious consideration. Alaw cannot be struck doen under Article 14 merely because some officershave wtongly interpreated the relevant provisions.
8. For the reasons mentioned above, a Writ of Certiorari will be issuedquashing the impugned levy. Nothing ain this order will prevent therespondent from making fresh assessment in accordance with law and in thelight of the observation made above.
9. Under the circumstance of this cas, there will be no ordeer as tocosts.