2011 (2) TMI 220 - SC - Central Excise

Duty liability - Excise duty increase - Liability of purchaser - The petitioner has contended that the delay in delivery of the vehicle to him by the respondents was not occasioned by any failure or negligence on his part and the liability to pay the increased amount on account of increase in excise duty, was not that of the petitioner, but of the respondents concerned - The receipt given to the petitioner for payment of the amount in the proforma invoice, it had been indicated that the prices prevailing on the date of billing would apply- The billing was done on 5th of April, 2009 - In the absence of any evidence of any deliberate intention on the part of the respondents to delay delivery of the vehicle, we are unable to agree with the petitioner that the increase in price has to be borne by the respondents - As regard to the provisions of Section 46A(1)(b) of the Sale of Goods Act, 1930, it is the liability of the petitioner to pay the extra price when the excise duty had been enhanced prior to the delivery of the vehicle.

Summary

Issues involved:
Delay in delivery causing price increase; Liability for increased price due to excise duty; Applicability of Sale of Goods Act, 1930.

Issue 1: Delay in delivery causing price increase
The petitioner applied for a car in 1985-1986, paid the full amount in 1989, but faced a delay in delivery due to an increase in excise duty. The petitioner argued that he should not bear the increased price as he was not responsible for the delay. The District Consumer Forum rejected his claim, but the State Forum allowed it. The National Commission later reversed the State Forum's decision, leading the petitioner to appeal to the Supreme Court.

Issue 2: Liability for increased price due to excise duty
The dealer argued that the petitioner was required to bear the increase in price due to excise duty as per the invoice date. The dealer claimed that the petitioner's chosen color was not available at the time of billing, despite documents showing otherwise. The dealer contended that there was no negligence in informing the petitioner about the vehicle's readiness promptly.

Issue 3: Applicability of Sale of Goods Act, 1930
The manufacturer and dealer relied on Section 64 of the Sale of Goods Act, 1930, stating that any increase in price due to additional taxes should be borne by the customer. They argued that since there was no negligence in making the vehicle available and no malafide intention, the petitioner should bear the price increase as per the Act.

The Supreme Court analyzed the documents and communications between the parties. The Court noted that the petitioner was informed about the price prevailing at the time of billing and that the billing was done in April 1989. The Court found no evidence of deliberate delay by the respondents and cited previous court decisions where there was a clear deficiency in service, unlike in this case. Referring to Section 46A(1)(b) of the Sale of Goods Act, the Court held that the petitioner was liable to pay the extra price due to the excise duty increase before the vehicle's delivery. Consequently, the Special Leave Petition was dismissed, and the other petition seeking interest was also rejected. No costs were awarded in either matter.