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Issues:
1. Determination of assessable value of extruded aluminium tubes for excise duty purposes. 2. Entitlement to refund of erroneously recovered duty. 3. Legality of show cause notice issued under Section 36(2) of the Central Excises and Salt Act. Detailed Analysis: 1. The petitioners, a registered company manufacturing packaging materials, including aluminium tubes, disputed the inclusion of post-extrusion operation costs in the assessable value for excise duty. The Department argued that these costs should be considered part of manufacturing activities. The Single Judge upheld the petitioners' claim in a previous judgment. The Department's appeal was dismissed by the Division Bench. The petitioners were entitled to a refund for duty overpaid between June 2, 1973, and January 20, 1974, as per the High Court's direction. 2. The petitioners sought a refund from the Department, which was initially rejected but later granted by the Collector of Central Excise (Appeals) in compliance with the High Court's decision. However, the Government of India issued a show cause notice under Section 36(2) of the Act challenging the refund order. The notice questioned the Appellate Collector's decision post the High Court judgment and the pending appeal before the Supreme Court. The petition challenged the legality of this notice. 3. The Court found the show cause notice to be misconceived and aimed at preventing the petitioners from claiming the refund due to the pending appeal. The Court deemed the notice as not bona fide, as the objection was procedural rather than based on the merits of the refund order. The Court highlighted that the Department could have sought a stay from the Supreme Court but failed to do so. Consequently, the Court struck down the show cause notice as illegal and ruled in favor of the petitioners, directing the respondents to pay costs and discharge the bank guarantee furnished by the petitioners.
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