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Issues: Determination of excise duty on gases sold, inclusion of cylinder price in value of gas for excise duty assessment.
Analysis: 1. The petitioner, a manufacturer of oxygen and acetylene gases, sells gases to Southern Gas Limited, the only buyer, who provides cylinders for gas delivery. The petitioner submitted a price list for excise duty assessment without including the cylinder value. The excise department directed provisional assessment including cylinder cost, leading to the petitioner seeking a Writ of Mandamus to exclude cylinder value from excise duty calculation. 2. The primary issue is whether the cylinder price supplied by the buyer can be included in the gas value for excise duty calculation. The respondents argued based on Section 4(d)(i) of the Act and a notification granting exemption for durable packing. However, the court found no merit in these arguments as the petitioner does not bear the cost of such packing supplied by the buyer. 3. The court clarified that Section 4(d)(i) does not exempt packing supplied by the buyer as the manufacturer does not incur its cost. Hence, the value of such packing cannot be included in the excisable goods' value. The legislative intent was clear in not exempting such packing from excise duty calculation. 4. Regarding the non-retrospective notification granting exemption for durable packing, the court emphasized that the notification does not authorize including cylinder price if not warranted by law. The court asserted that the notification does not dictate the decision on whether the cylinder price should be included in the gas value for excise duty assessment. 5. Notably, as the cylinders belong to the buyer and are used only for gas delivery, the court concluded that the gas alone is sold to the buyer, excluding the cylinder cost from the excise duty calculation. The court held that including the cylinder price in the gas value for duty assessment was incorrect, and the petitioner was not required to resort to provisional assessment based on such inclusion. 6. Consequently, the court allowed the petition, making the Rule absolute without any cost implications. The judgment clarified the exclusion of cylinder price from gas value for excise duty assessment, emphasizing the manufacturer's liability only for the gas sold, not the containers provided by the buyer.
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