1977 (4) TMI 166 - HC - Central Excise

Summary

Issues:
Challenge to Excise duty assessment and orders passed by Excise authorities and Government of India under Central Excises and Salt Act, 1944.

Analysis:
The petitioner, a partnership firm manufacturing and selling electric lamps, fluorescent tubes, etc., challenged the demand for short assessment of Excise duty from March 1969 to November 1969. The Excise authorities assessed the duties based on the contract rate between the petitioner and bulk purchasers, leading to the demand for short assessment under rule 10A of the Central Excise Rules, 1944. The petitioner objected to this demand through appeal and revision applications, which were unsuccessful.

The key contention revolved around the interpretation of section 4(a) of the Central Excises and Salt Act, 1944, which determines the value for duty purposes. The petitioner argued that the wholesale cash price for goods sold to bulk purchasers should be the actual price charged, relying on the Supreme Court decision in A.K. Roy v. Voltas Ltd. The respondents, however, contended that the wholesale purchase price should be the same irrespective of the amount charged by the manufacturer and distinguished the Voltas Ltd. case.

The court analyzed the Voltas Ltd. case, emphasizing that the wholesale cash price should be ascertained based on transactions at arm's length. It clarified that the observations in the Voltas case cannot be extended to mean that contract price always equals wholesale cash price. Section 4(a) explicitly states that wholesale cash price is the value for duty assessment and should be consistent for all parties during the same period. The authorities' determination that the wholesale cash price should be uniform for general trade and bulk purchasers was deemed legal, leading to the dismissal of the application without costs.