1991 (9) TMI 308 - AT - Central Excise

Tribunal upholds Notification No. 36/83, rejects refund claims, cites binding High Court decision

The Tribunal dismissed the appeals, upholding the validity of Notification No. 36/83 and rejecting the appellants' refund claims. It affirmed the ... Precedent - Valuation - Notification 201/85-C.E. Issues Involved:1. Competence of the Central Government regarding Notification No. 36/83.2. Levy of Central Excise duty based on maximum retail price vs. normal price.3. Validity and authority of Notification No. 36/83 under Section 4 of the Central Excises & Salt Act, 1944.4. Rejection of appellants' refund claims.5. Binding nature of High Court decisions on the Tribunal.Issue-wise Detailed Analysis:1. Competence of the Central Government regarding Notification No. 36/83:The appellants challenged the competence of the Central Government to issue Notification No. 36/83 dated 1-3-83, which levied Central Excise duty on cigarettes based on the maximum sale price marked on cigarette packs. The appellants argued that this notification was not in conformity with Section 4 of the Central Excises & Salt Act, 1944, which provides for the levy of excise duty based on the normal price of goods sold in wholesale trade. They contended that the notification could not operate under Section 4 and thus, they were eligible for a refund of the differential duty paid.2. Levy of Central Excise duty based on maximum retail price vs. normal price:The appellants argued that the notification's basis for levying excise duty on the maximum retail price printed on cigarette packs was inconsistent with the statutory requirement of basing the duty on the wholesale price. They claimed that the duty should be calculated as per Section 4 of the Central Excises & Salt Act, 1944, which considers the normal price in wholesale trade, not the retail price.3. Validity and authority of Notification No. 36/83 under Section 4 of the Central Excises & Salt Act, 1944:A show cause notice was issued to the appellants to explain why their refund claim should not be rejected, asserting that Notification No. 36/83 had become part of the Central Excises & Salt Act, 1944, and was in accordance with the law. The Assistant Collector rejected the appellants' contention, stating that the notification provided for excise duty liability based on the maximum wholesale price marked on cigarette packs. The appellants' request for a refund based on the wholesale price under Section 4 was denied.4. Rejection of appellants' refund claims:The Assistant Collector rejected the appellants' refund claim, and this decision was upheld by the Collector of Central Excise (Appeals). The appellants, dissatisfied with these decisions, appealed to the Tribunal. The Tribunal noted that the issue was already covered by the Bombay High Court's decision in the case of M/s. GTC Industries Ltd. v. Union of India, which held that the notification was valid and the duty had to be charged as per the notification.5. Binding nature of High Court decisions on the Tribunal:The Tribunal emphasized that it is bound to follow the decisions of the High Courts. Citing previous judgments, including the Delhi High Court's decision in the case of M/s. J.K. Synthetic Ltd. v. CCE, the Tribunal reiterated that it must adhere to High Court rulings unless they are overturned on appeal. The Tribunal referenced its own precedent in Silibans International, New Delhi v. CC, New Delhi, where it followed the Bombay High Court's decision in GTC Industries Ltd. v. Union of India.Conclusion:The Tribunal, respecting the binding nature of the High Court's decision, dismissed the appeals. It confirmed the findings of the lower authorities and upheld the validity of Notification No. 36/83, thereby rejecting the appellants' refund claims.