1988 (2) TMI 70 - HC - Central Excise

Issues Involved:
1. Approval of assessable value in Price List No. 2/82.
2. Inclusion of excise duty and additional excise duty in assessable value.
3. Validity of Clause 47 of the Finance Bill, 1982, and relevant provisions of the Finance Act.
4. Renewal and enforceability of bank guarantees.
5. Transfer of business and obligations between Duncans Agro-Industries and New Tobacco Company.
6. Contempt of Court for non-compliance with court orders regarding bank guarantees.

Issue-wise Detailed Analysis:

1. Approval of Assessable Value in Price List No. 2/82:
The petitioners sought a writ directing the respondents to approve the assessable value as declared by the 1st petitioner in Price List No. 2/82, filed on 25-3-1982. The court initially allowed the clearance of goods based on the assessable values declared without including the excise duty and additional excise duty exempted under Notification No. 30/79-CE.

2. Inclusion of Excise Duty and Additional Excise Duty in Assessable Value:
The petitioners challenged the inclusion of excise duty and additional excise duty in the assessable value of their products. The court's interim orders allowed the petitioners to clear goods without including the exempted duties in the assessable value, pending further orders. However, the final judgment dismissed the writ petition, thereby upholding the inclusion of these duties in the assessable value.

3. Validity of Clause 47 of the Finance Bill, 1982, and Relevant Provisions of the Finance Act:
The petitioners contended that Clause 47 of the Finance Bill, 1982, and the relevant provisions of the Finance Act were illegal, unconstitutional, and invalid. The court did not find merit in this argument and ultimately dismissed the writ petition, thereby upholding the validity of the contested provisions.

4. Renewal and Enforceability of Bank Guarantees:
The court ordered the petitioners to renew the bank guarantees initially furnished to secure the differential duty amount. Despite orders dated 27-10-1986 and 14-11-1986 directing the renewal of these guarantees, the petitioners failed to comply fully. Four bank guarantees expired without being renewed, leading to a loss of Rs. 60 lakhs for the Central Government. The court emphasized that the obligation to renew the bank guarantees persisted throughout the pendency of the writ petition.

5. Transfer of Business and Obligations Between Duncans Agro-Industries and New Tobacco Company:
During the pendency of the writ petition, the tobacco business of Duncans Agro-Industries was transferred to New Tobacco Company. The court noted that neither Duncans Agro-Industries nor New Tobacco Company informed the court of this transfer. Despite the transfer, the court held that both entities were liable for the obligations arising from the court's orders, as New Tobacco Company had renewed the bank guarantees and benefited from the court's interim orders.

6. Contempt of Court for Non-compliance with Court Orders Regarding Bank Guarantees:
The Central Excise authorities filed a contempt case against the respondents for failing to renew the bank guarantees as directed by the court. The court found that the respondents' failure to renew the guarantees constituted a violation of its orders, causing a loss to the public exchequer. The court directed the respondents to deposit Rs. 60 lakhs into the court within six weeks, warning that failure to do so would result in further orders in the contempt case.

Conclusion:
The court dismissed the writ petition, upholding the inclusion of excise and additional excise duties in the assessable value and the validity of the contested provisions of the Finance Act. The court held both Duncans Agro-Industries and New Tobacco Company liable for the obligations arising from the court's orders, directing them to deposit Rs. 60 lakhs into the court. The court postponed passing orders in the contempt case, contingent on the respondents' compliance with the directive to deposit the amount.

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