1978 (11) TMI 69 - HC - Central Excise

Summary

Issues involved:
The judgment involves the rejection of a refund claim of Central Excise duty by the Assistant Collector of Central Excise, Goa, based on the grounds of non-passing of relief to consumers and interpretation of statutory notifications.

Details of the Judgment:

Issue 1: Refund Claim Rejection
The petitioner, a rubber manufacturing company with factories in Madras and Goa, sought a refund of Central Excise duty amounting to Rs. 11,51,380.77. The rejection of the refund claim was solely based on the non-passing of relief obtained to consumers, as per a press note issued by the Central Government. The court found this ground for rejection to be unfounded as there was no specific condition in the statutory notification requiring the passing on of relief to consumers. It was deemed illegal for the Board to issue directives restricting relief under excise notifications, leading to the quashing of the impugned order.

Issue 2: Assessment of Excisable Goods
The petitioner also argued regarding the assessment of excisable goods for excise duty purposes. Referring to Section 4(4)(d)(2) of the Act, it was contended that only the amount of excise duty payable on goods should be excluded from the value of goods, not considering the relief granted. The court emphasized that excise duty is levied on the manufacturing cost and profit, excluding post-manufacturing costs or profits. Citing a Supreme Court case, it was clarified that excise duty is imposed only on the manufacturing cost and profit, not on post-manufacturing elements.

Conclusion:
The writ petition was allowed, and the impugned order rejecting the refund claim was quashed. The Assistant Collector of Central Excise, Goa was directed to reevaluate the refund claims in accordance with the court's observations and the previous judgment. The determination was to be done promptly, within two months. No costs were awarded in this case.