1974 (9) TMI 51 - HC - Central Excise

Summary

Issues Involved:
1. Validity of orders of assessment under the Central Excises and Salt Act, 1944.
2. Refund claim of Rs. 5,90,362/- for excess excise duty paid.
3. Applicability of the Supreme Court decision in A.K. Roy v. Voltas Limited.
4. Inclusion of post-manufacturing costs and selling profits in the assessable value.
5. Jurisdiction and errors of fact and law by Excise Officers.
6. Discretionary jurisdiction of the writ court.
7. Statutory remedies and limitations under the Central Excise Rules.
8. Nature of transactions with distributors and trade discounts.
9. Alternative remedies under Article 226 of the Constitution.

Detailed Analysis:

1. Validity of Orders of Assessment:
The petitioner challenged the validity of the assessment orders made under the Central Excises and Salt Act, 1944, for the years 1971 to 1973. The court held that the Excise Officers have jurisdiction to levy duty on the wholesale cash price of the products, and the orders of assessment cannot be deemed nullities due to lack of inherent jurisdiction. The assessments were based on the petitioner's own representations and statements, which included manufacturing costs and profits.

2. Refund Claim of Rs. 5,90,362/-:
The petitioner sought a refund of Rs. 5,90,362/- for excess excise duty paid, arguing that the duty was levied on post-manufacturing costs and selling profits, which should be excluded. The court directed the respondents to treat the applications for refund submitted in June 1972 and December 1972 as valid and to dispose of them in accordance with the law.

3. Applicability of the Supreme Court Decision in A.K. Roy v. Voltas Limited:
The petitioner relied on the Supreme Court decision in A.K. Roy v. Voltas Limited, which held that post-manufacturing expenses should not be included in the assessable value. The court noted that the principles laid down in the Voltas case confirm earlier principles and that the Excise Officers did not commit an error of law by including post-manufacturing costs and profits, as the petitioner had not made a case before the officers.

4. Inclusion of Post-Manufacturing Costs and Selling Profits:
The court found that the petitioner had included post-manufacturing costs and selling profits in their statements, and the Excise Officers assessed the duty based on these representations. The court held that any errors made by the officers were errors of fact, not law, and the officers acted within their jurisdiction.

5. Jurisdiction and Errors of Fact and Law by Excise Officers:
The court held that the Excise Officers acted within their jurisdiction and any errors made were factual, not legal. The officers assessed the duty based on the petitioner's own statements, which included manufacturing and post-manufacturing costs and profits.

6. Discretionary Jurisdiction of the Writ Court:
The court emphasized that the writ court exercises discretionary jurisdiction and would not grant relief if the petitioner had not suffered any loss. The court noted that the petitioner had already collected the excess duty from their purchasers, and refunding the amount would result in unjust enrichment.

7. Statutory Remedies and Limitations under the Central Excise Rules:
The court noted that the petitioner had not appealed or revised the assessment orders but had applied for a refund under Rule 11 read with Rule 173J. The court held that the refund application was made within the special period of limitation and directed the respondents to dispose of the applications in accordance with the law.

8. Nature of Transactions with Distributors and Trade Discounts:
The court examined the agreements with distributors and found that they were not outright sales but controlled by the petitioner as agents. The Excise Officers allowed a 12.5% trade discount, and any errors in allowing trade discounts were factual and not subject to writ jurisdiction.

9. Alternative Remedies under Article 226 of the Constitution:
The court held that the petitioner had alternative statutory remedies available and should have pursued them. The writ petition was deemed premature and speculative, and the court discharged the rule, directing the respondents to handle the refund applications as per the law.

Conclusion:
The court discharged the rule and directed the respondents to treat the petitioner's applications for refund as valid and dispose of them in accordance with the law. The court emphasized that the petitioner should pursue alternative statutory remedies and that any errors made by the Excise Officers were factual, not legal. The court also noted that refunding the excess duty would result in unjust enrichment for the petitioner.