1991 (12) TMI 70 - HC - Central Excise

Summary

Issues:
1. Assessment of excise duty on glass bottles inclusive of printing charges.
2. Review of refund order by Collector of Central Excise and Customs, Pune.
3. Interpretation of assessable value under Tariff Item No. 23A(4).
4. Applicability of Supreme Court judgments on determining assessable value.
5. Jurisdiction to challenge Collector's order in writ petition.

Analysis:

1. The petitioners, glass manufacturers, entered into an agreement to supply bottles with printed logos. They sought exclusion of printing charges from assessable value for excise duty calculation under Tariff Item No. 23A(4). The Assistant Collector approved this exclusion initially, leading to a refund claim by the petitioners.

2. Subsequently, the Collector of Central Excise and Customs, Pune, issued a show cause notice to review the refund order. The Collector set aside the refund, asserting that the assessable value should include printing costs. This decision was challenged by the petitioners.

3. The High Court analyzed the Collector's decision, emphasizing that the taxable event for excise duty is the completion of bottle manufacture, not printing. The court rejected the notion that printing increased the bottle's value, as it was solely for identification purposes. The court found the Collector's interpretation erroneous and set aside the order.

4. The court distinguished Supreme Court precedents cited by the Department, highlighting that those cases involved substantial changes to the articles' identity, unlike the present case where printing did not alter the bottle's fundamental characteristics or marketability. Therefore, the principles from those cases were deemed inapplicable.

5. Lastly, the court addressed the jurisdictional argument that the petitioners should have pursued an appeal instead of a writ petition. The court rejected this, citing the prolonged pendency of the case and the clear unsustainability of the Collector's decision. The court upheld the petition, setting aside the Collector's order and discharging the petitioners' bond.

In conclusion, the High Court ruled in favor of the petitioners, emphasizing that the cost of printing should not be included in determining the assessable value of glass bottles for excise duty calculation. The court found the Collector's decision erroneous and unsustainable, providing clarity on the issue and dismissing the need for further litigation through an appeal.