1992 (3) TMI 72 - HC - Central Excise

Summary

Issues:
1. Calculation of assessable value for excise duty based on wholesale prices.
2. Alleged non-passing of approved discount to wholesale dealers.
3. Demand of duty amount collected on non-passed discount value.
4. Validity of order directing payment of the collected duty amount.
5. Determination of related persons for excise duty purposes.
6. Entitlement to discount based on related persons determination.

Analysis:

1. The petitioner, a public limited company, submitted a price list for excise duty calculation based on ex-factory wholesale prices. Dispute arose regarding the assessable value determination by Excise Authorities, leading to a show cause notice. The Collector of Central Excise directed duty calculation based on the company's selling prices to wholesale dealers, which was challenged through a writ petition.

2. Subsequently, the petitioner started a factory in a different location and was alleged to have not passed the approved discount to wholesale dealers fully. A show cause notice was issued for non-passing of the discount amount, leading to a demand for the duty amount collected on the non-passed discount value. The Collector of Central Excise directed the petitioner to pay the collected sum, prompting the filing of a writ petition to quash the order.

3. During the pendency of the writ petition, a remand order was issued, leading to a finding that wholesale dealers were not related persons. Consequently, the petitioner was deemed entitled to the full discount amount. The impugned order was quashed, and a direction was given for the petitioner to reimburse the differential amount collected from the wholesalers.

In conclusion, the judgment addressed the calculation of assessable value for excise duty, the non-passing of approved discounts, determination of related persons, and the entitlement to discounts based on related persons determination. The court quashed the order demanding payment of the collected duty amount, directing reimbursement to wholesalers based on the entitlement to the full discount amount.