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of <h1>Remand of Duty Assessment Case for Fair Hearing | Bank Guarantees Required |</h1> <h3>MAHALAKSHMI GLASS WORKS PVT. LTD. Versus UNION OF INDIA</h3> MAHALAKSHMI GLASS WORKS PVT. LTD. Versus UNION OF INDIA - 1990 (46) E.L.T. 246 (Bom.) Issues:1. Assessment of duty on glass bottles including the cost of packing material.2. Approval of price lists excluding the cost of packing.3. Refund claims for duty paid on packing material.4. Approach of excise authorities and principles of natural justice.5. Interpretation of assessable value post the P.M.E. case.6. Decision to remand the matter to the Assistant Collector of Central Excise.7. Assignment of bank guarantees in favor of the Assistant Collector.8. Timeline for the Assistant Collector to hear and decide the matter.Analysis:1. The petitioners, a private limited company, produce glass bottles assessed under Item No. 23A of the Central Excise Tariff. They claim to have been paying duty on the glass bottles based on the assessable value, which includes the costs of packing material like gunny bags and cartons. The petitioners argue that the glass bottles are usually sold in durable and returnable gunny bags, with cartons only used upon customer request.2. In late 1977 and early 1978, the petitioners submitted price lists for approval, seeking to exclude the cost of packing from the assessable value. The Superintendent of Central Excise approved the price lists but included packing charges as part of the assessable value, citing Section 4(4)(d) of the Central Excise Act. The petitioners paid duty on packing costs under protest and lodged refund claims, which were neither accepted nor rejected by the authorities.3. Despite various representations and lack of response from the excise authorities, the Assistant Collector informed the petitioners to appeal to the Appellate Collector if they were dissatisfied with the approval of the price lists. Instead of appealing, the petitioners approached the High Court under Article 226 of the Constitution, citing breach of natural justice in the authorities' actions.4. The High Court found it unnecessary to delve into the petition's merits due to subsequent developments post the P.M.E. case by the Supreme Court and relevant decisions by a Division Bench of the High Court. The Court noted the lack of clarity in the excise authorities' orders and their reluctance to address the matter properly, leading to the decision to remand the case to the Assistant Collector for a fair hearing based on the previous rulings.5. The Court directed the Assistant Collector to decide the matter in light of the relevant rulings and provide both parties with an opportunity to present evidence supporting their claims. The petitioners were instructed to assign bank guarantees to the Assistant Collector by a specified date or provide fresh guarantees, failing which the excise authorities could proceed to recover the dues.6. The Assistant Collector was mandated to expedite the hearing and decision-making process, aiming for a resolution by a set deadline. The petitioners committed to providing all necessary data to the Assistant Collector within the given timeline.7. The Court made the rule absolute as per the directions provided, with no cost orders in the circumstances of the case.
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