JUDGMENT
1. This petition under Article 226 of the Constitution arises out of proceedings under the Central Excise & Salt Act (hereinafter the Act).
2. The petitioner – The Tata Oil Mills (hereinafter the Company) – is a public limited company engaged inter alia in the manufacture of (1) vegetable products; (2) glycrine, (3) cosmetics and toilet preparations, (4) soaps, and (5) organic surface activiely of the First Schedule to the Act. In or about January 1980 the Company filed 19 price lists in respect of the various a aforesaid a price, what according to it, were post-manufacturing expenses viz., sales office expenses, advertisement and publicity expense interest on borrowings administrative overheads allocable to sales and marketing activities and also outer packing charges i.e., packing in addition to primary packing and which asking, according to the Company, constituted secondary packing. Subsequent to the filing of these 19 price lists, the Company filed further 72 price lists. In these price lists also the Company educated form the wholesale price the amounts representing the aforesaid items. The excise authorities, however, returned four out of thee 19 price lists Supra and called upon the Company to furnish details of the deductions claimed which details were also subsequently furnished by the Company.
3. While the matter was thus pending before the excise authorities, the Company contained to pay duty not he wholesale price without the deductions claimed by it. This was for the period 12th January 1980 upto 26th August 1980 and the amount paid was Rs. 10,84,892/- as duty on the outer packing charges. With effect from 26th August 1980, the Company started paying duty only on the assessable value arrived at after deducting the post – manufacturing costs and expenses and the outer packing charges because the Company had to reduce the prices for reversing the trend in spiraling prices in response to, what the Company terms as, the national need. The Company informed the third respondent accordinly and maintained a running bond account wherein the Company debited the duty invoked on post – manufacturing expense and outer packing charges. The said duty was paid provisionally under Rule 9B of the CEntral Excise Rules and one execution of a B-13 Bond.
4. By order dated 2nd April 1981 the third respondent rejected the Company’s claim and contentions. The Company on its own paid under protest Rs. 29,41,2177/- as duty on post-manufacturing expenses and outer packing charges for the period 26th August 1980 till 31st March, 1981. And from 1st April 1981 the Company commenced paying under protest duty not he wholesale price without deducting therefrom the postmanufacturing costs and expenses or the outer asking charges.
5. Against the above order dated 2nd April 1981 the Company preferred appeal before the Collector of Central Excise (Appeals)a and requirested for stay pending hearing thereof Stay was, however, not granted. The appeal is pending. In the meanwhile, the Company has filed this petition challenging the legality and validity of the order dated 2nd April 1981 (Exhibit E) as also the order dated 25th August 1982 (Exhibit H) refusing stay.
6. Mr. Bharucha, learned Consel for the Company, submitted that through when this petition was field, several question were raised, the controversy now, in view of the recent decision of the Supreme Court in the P. M. E. case, narrows down qua this Company to only one item viz., sales – tax, additional sales – tax, surcharged on sales – tax, turn – over tax and octroi/centry tax. He also stated that after the P. M. E. ruling Supra the Company has also paid over the revenue, bulk of the differential duty retaining with it an amount of only Rs. 13,65,762.60/- p. pending decision of this Court on the Item relating to taxes aforesaid.
7. On the question of these taxes, learned Counsel Mr. Bharucha contends that the Company is entitled to deduct the entire amount thereof while arriving at the assessable value under Section 4 of the Act. Mr. Sethna, learned Counsel for the respondents, fairly conceded this position and further state that even if deductions of these taxes may not have been claimed by the Company under the precise head or heads, it would even so be entitled to the said deduction in law. There is thus no dispute on the question and issue that the Company is entitled to deduction of all the aforesaid taxes while computing the assessable value of the goods under Section 4 of the Act.
8. The quantum of these taxes which the Company is entitelds to deduct for the period 12th January 1980 to 224th January 1984 is, according to the petitioners’ learned Counsel, Rs. 5,22,487.82. Deduct the said amount from the amount of Rs. 13,65,7622.60 which is the amount supra retained by the Company pending decision of this Court on the question of taxes, the balance is Rs. 8,43,274.78. This balance the Company is liable to pay over to the excise authorities which they should do latest by 31st October 1984. It is, however, clarified that in the event of the excise authorities finding the aforesaid quantum of taxes viz., Rs. 5,22,487.82 (relief in which behalf has been granted to the Company by this judgment) a to be more than the actual or the real qunatum, inrespect whereof the Company is entitled to relied, the respondents will be at liberty latest till 10th December 1984 to apply to and move them Court for rectification. This liberty will laps thereafter.
9. As final orders on this petition dispose of the entire controversy between the parties, the Company appeal before th Collector of Central Excise (Appeals) does not survive. Mr. Bharucha stated that the Company would consequently withdraw the said appeal.
10. In the result, this petition is partly allowed. The impugned order dated 2nd April 1982 (Exhibit E) to the extent it relates to sales- tax, additional sales – tax, surcharge on sales – tax., turn – over and octroi/entry tax is set aside and qauashed. It is held and declared that the petitioner-Company entitled to claim dedication in respect of all the aforesaid taxes while computing the assessable value of the manufacture articles under Section 4 of the Act. It is ordered and detracted That after deduct in relation to these taxed the amount of Rs. 5,22,487.82 from the amount of Rs. 13,65,762.60 presently retained by the Company, the balance Rs. 88,43,274.78 shall be paid over by the Company to the excise authorities latest by 31st October 1984.
11. Rule is made partly absolute interms aforesaid. In the circumstances of the case, however, there will be no order as to costs.
