1976 (11) TMI 69 - HC - Central Excise

Valuation - Wholesale cash price - Determination of - - Interpretation of Voltas decision - Interpretation of Atic s decision - Alternative remedy

Summary

Issues Involved:
1. Whether the excise duty should be levied on the price inclusive of post-manufacturing expenses.
2. Whether the petitioner is entitled to a refund of excise duty paid on the basis of the revised price list.
3. Whether the writ petition is maintainable despite the existence of alternative remedies.
4. Whether the claims for refund are barred by time.

Issue-wise Detailed Analysis:

1. Whether the excise duty should be levied on the price inclusive of post-manufacturing expenses:

The petitioner contended that excise duty is a tax on the manufacture of goods and not on its sale. Thus, it should be levied only on the amount representing manufacturing cost and manufacturing profits, excluding post-manufacturing expenses. The petitioner relied on the Supreme Court's decision in A.K. Roy and another v. Voltas Limited, which emphasized that the wholesale cash price must be free from loading non-manufacturing charges.

The respondents argued that the petitioner had been selling its goods directly to independent buyers at ex-factory rates and had been correctly paying excise duty under Section 4(a) of the Act. They contended that the facts of the Voltas case were different and not applicable to the present case.

The court noted that the petitioner had been paying excise duty as per the price list approved by the Department, which was the wholesale cash price at the factory gate. The court found that the petitioner's claim that the price list included post-manufacturing expenses was disputed by the respondents and that there was no finding by any authority that the approved price list included such expenses. The court held that it was not possible to go into the disputed questions of fact and that the premises on which the legal argument was based were non-existent in this case.

2. Whether the petitioner is entitled to a refund of excise duty paid on the basis of the revised price list:

The petitioner submitted revised price lists excluding post-manufacturing expenses and filed claims for the refund of excise duty paid in excess. The respondents rejected the refund claims, stating that the petitioner had been selling its products at ex-factory prices directly to independent buyers and that the facts of the Voltas case were distinguishable.

The court held that the petitioner had not exhausted the alternative remedies of appeal and revision provided under the Act. It noted that the petitioner's claim that the price list included post-manufacturing expenses was disputed, and there was no finding by any authority to support this claim. The court concluded that the petitioner could not get any relief in these proceedings without a finding on the disputed facts.

3. Whether the writ petition is maintainable despite the existence of alternative remedies:

The respondents argued that the petition was not maintainable as the petitioner had not exhausted the alternative remedies of appeal and revision. The court acknowledged that the Union of India, as the revisional authority, had taken a stand contrary to the petitioner's contentions in similar cases. However, the court held that before applying the ratio of the Supreme Court's decisions, the facts had to be found by the authorities. Since the petitioner had not approached the appellate or revisional authorities, the writ petition was not maintainable.

4. Whether the claims for refund are barred by time:

The respondents contended that some of the refund claims were barred by time. The court held that if the petition was well-founded on merits, the question of limitation could be addressed by the authority deciding the entitlement of the refund. Since the main contention of the petitioners did not prevail, the court did not need to address the issue of limitation in detail.

Conclusion:

The court dismissed both writ petitions (C.W.P. No. 6959 of 1975 and C.W.P. No. 6958 of 1975), holding that the petitioner could not get any relief in these proceedings due to the disputed facts and the non-exhaustion of alternative remedies. The court also ruled that there would be no order as to costs.