TaxTMI 
TaxTMI 
1974 (9) TMI 53
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....cted as excise duty, be refunded to the respondents. 4. Two short points arise in this appeal. But before we discuss them it is necessary to set out some facts. 5. has been stated that the respondents are manufacturers of vegetable products and under Item No. 13 of the First Schedule to the Act of 1944 the excise duty leviable before the 1st of March, 1969 was by weight i.e. per quintal of the excisable goods. 6. By the Finance Act of 1969, which came into force on the 1st of March, 1969, Item No. 13 of the said First Schedule was amended so that from that date the excise duty leviable was made ad valorem. Therefore, the duty of excise which was earlier chargeable on the actual weight of the vegetable products i.e.. the excisable goods, was altered to ad valorem duty on the value of the vegetable products. 7. Under Rule 173-C the respondents were required to file a price list of goods assessable ad valorem for the purpose of determination of value in accordance with Section 4 of the Act of 1944. It would appear that the respondents' price lists were not accepted by the Central Excise Authorities and that the respondents were ordered to pay excise duty on higher pric....
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....is that to the value of the vegetable product that is to say, hydrogenated oil in the case before us, falling under Item No. 13 of the First Schedule of the Act of 1944 the appellants have illegally and improperly added the value of the tin-containers which are not excisable goods under Item 13 as well as-the railway freight. In other words, the contention of the respondents is that the appellants have illegally and improperly disallowed the deduction of the cost of the tin-containers and the railway freight. It is not disputed that the value of the tin-containers if Rs. 3.78 and the railway freight is Re. 0.99 P. per tin of 16.5 Kgs. 13. On the question of quantum, therefore, there is no dispute. It may also be mentioned that there was at one time a difference of opinion between the parties as to which maximum price was applicable because the Government of India in the relevant Notifications prescribed different maximum prices as between the producer and wholesaler, and the wholesaler and the dealer. Fortunately, this dispute has been resolved and need not therefore be discussed by us. 14. The claim of the respondents as the plaintiffs in the suit, is, therefore, for recover....
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....period from the 1st of March, 1962 to the 7th of March, 1969 mentions the wholesale price by producer to wholesale buyer for the vegetable product packed in tin-containers containing 16.5 kgs. as being Rs. 65.58. The freight to destination is shown as 0.99 P. and the cost of tin-containers at Rs. 3.78. 19. According to the respondents, the value for the purpose of assessment under section 4 of the Act of 1944 would, therefore, be Rs. 65.58 less Rs. 4.77. The Central Excise authorities contend that the value for the purpose of ad valorem duty must include the value of the container as well as the cost of freight. 20. Some of the relevant provisions of the Act of 1944 and the Rules made thereunder may now be noticed. 21. Section 2(4) of the Act of 1944 defines "excisable goods" to mean "goods specified in the First Schedule as being subject to a duty of excise and include salt". 22. Section 2(f) defines "manufacture" as including any process incidental or ancillary to the completion of a manufactured product. 23. Item No. 13 of the First Schedule with which we are concerned refers to vegetable product in the following words:- "Vegetable product' means any ....
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....rect value for the purpose of assessment as provided in Section 4 of the Act. A duty is, therefore, cast on the proper officer to determine the value in terms of Section 4 of the Act of 1944 and not otherwise. 29. As we have mentioned, Section 4 of the Act of 1944, before its amendment, came in for determination in many cases. In Voltas Limited v. A.K. Roy, 73 Bom. LR 229, a Division Bench of this Court interpreted the term "wholesale cash price" as contained in clause (a) of Section 4 of the Act of 1944 and held that the phrase "wholesale cash price" as used in the section was in contradistinction with retail price and that that price is relieved of the loading represented by post-manufacture expenses unless they form part of the profits of the manufacturer himself. 30. The matter went in appeal to the Supreme Court and the Supreme Court affirmed the judgment of this Court and held that Section 4 of the Act of 1944 provides that the value should be found after deducting the selling cost and the selling profit and that the real value can include only the manufacturing cost and the manufacturing profit. 31. This is what the Supreme Court observed in A.K Roy v. Voltas Limite....
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....o show that where it was the intention of the Legislature to include the packaging in the definition of excisable goods it has said so. For instance, Item No. 3 of the First Schedule which deals with 'Tea", specifically provides that tea may be sold in bulk and would be assessed to excise duty at a particular rate. But sub-clause (2) of Item No. 3 refers to "Package tea, that is to say, tea packed in any kind of container not more than 27 kgs. net of tea" as being excisable goods within the meaning of Section 2(d). Thus, in the case of loose tea there is one rate per kilogram and in the case of package tea there is a different rate. 36. Now, Item No. 13, which deals with, vegetable product, does not mention any packaging at all and it follows that the only article on which duty can be levied is the vegetable product or the hydrogenated vegetable oil which constitutes excisable goods and not the container. 37. Mr. Nain has also referred to Section 2(f) of the Act of 1944 which define "manufacture" and has shown to us that where it was intended that packaging should be included as a process of manufacturing, the Legislature has said so. In sub-clause (iii) to Section 2(f) t....
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....d not form part of the value for the purpose of assessment of excise duty is, therefore, correct and we affirm the same. 44. The next point to be considered is the challenge to the maintainability of the suit on the ground that such a suit is barred because the respondents have not availed of the remedies provided by the Act of 1944 itself in form of an appeal under Section 35 and revision under Section 36 of the Act of 1944 as well as by Section 40 of the Act of 1944, which, according to the learned Assistant Government Pleader, bars the filing of a suit in matters arising under the Act of 1944. 45. Section 35 of the Act of 1944 provides that any person deeming himself aggrieved by any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under the Act may file an appeal as therein provided and that every such order passed in appeal under Section 35 shall, subject to the power of revision conferred by Section 36, be final. 46. Section 36, of course, provides for a revision by the Central Government. These two sections obviously come into play when an order has been passed under the Act and any person is aggrieved by any such decision....
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....he scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Court. "(3) Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result f the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not." ***** "(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies. ***** "(7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply." 51. Now, in the case before us we have held that imposition of central excise dut....