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TMI Blog1984 (11) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... n the factory asking it to pay a sum of Rs.53,476.37 because the assessee had not passed on the benefit to the consumers. The Assistant Collector passed an order rejecting the claim of the factory and in appeal, the Appellate Collector also ruled against the appellants on the ground that the provisions of Section 4 of the Central Excises Salt Act, 1944, could not be overruled. 3. The sanctioned sum of Rs. 5,28,825.07 as rebate under the notification was sanctioned on 3-5-1979. The differential duty demanded in the Assistant Collector s order was the result of the redetermination of the assessable value by including the rebate retained by the appellants. 4. The learned Counsel for M/s Southern Petrochemical Industries Mr. Uttam Reddi said that the redetermination was not correct because the goods here were fertilizers. They were sold in accordance with a price fixed under the law by the Government of India. They sold the goods at the priced fixed by the statutory price fixing authority, and this has not been disputed by the central excise. When they found that they had become entitled to the benefit from a past date, they asked for a refund of the money under the exemption 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for by any tax that he has to pay, but is a pure profit for the factory. If should, therefore, enter into the assessable value. 6. In ordinary circumstances, the arguments of the learned Counsel for M/s Southern Petrochemical Industries would be impossible to resist but there are peculiar factors here. He argued that under the law he was obliged to sell only at a given price and any sale beyond that price would be an infraction. This argument overlooks the fact that while the factory has the obligation to follow the statutory control price in its sale, the central excise are governed only by the price at which the goods are sold or the price and money benefit derived by the manufacturer from the sale. It is to be noted that the price fixation like this one is not price fixation in which the tariff values are fixed for goods under the central excise law under section 3(2) of the Central Excises and Salt Act, 1944. The provisions of Section 4 themselves have been excluded from goods for which a tariff value has been fixed under Section 3(2). This is the important difference because price fixed by statute or price fixed for sale of the goods to the consumers and tariff values. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bring to it a monetary gain directly flowing from the transaction. This is not to suggest that the appellants are guilty of wrongdoing in asking for the refund but only that when they received the money, they must also accept the chain of events that might flow if the money so received can influence the tax liabilities. It can, therefore, be said in the light of subsequent events that the fertilizers were not sold at such fixed price, and therefore, were not goods so sold so as to qualify under this definition. 8. Accordingly, the action of the central excise authorities was correct and we reject the appeal. [Contra per: G. Sankaran]. - I have perused the order proposed by my learned brothers but regret that I find myself unable to agree with them. I have also perused Order No. 343/84-C, dated 6th June, 1984 in Appeal No. ED(SB)(T) A.No. 463/80-C. 10. The relevant portion of Section 4 of the Central Excises and Salt Act, 1944 (the Act, for short) reads thus:- 4. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be - (a) the normal p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady paid on the raw material or component parts used in the production or manufacture of such goods) from the duty of excise under such Act is for the time being in force, the duty of excise computed with reference to the rate specified in such Act in respect of such goods as reduced so as to give full and complete effect to such exemption; and (ii) in any other case, the duty of excise computed with reference to the rate specified in such Act in respect of such goods." 11. It may be seen that in the case of goods required to be sold at a price fixed under any law for the time being in force, the statute provides that the price so fixed (or, the maximum price, so fixed) shall be deemed to be the normal price of the goods. The value for charge of excise duty in such a case is deemed to be the normal price so arrived at, of course, provided that the assessee sells such goods in the course of wholesale to all at such statutorily fixed prices. 12. It is not in dispute that the goods herein, namely, urea, was sold by the assessee at the price statutorily fixed under Clause 3 of the Fertilizer (Control) Order, 1957. The Notification G.S.R. 865 (E), dated 2-11-1976 (a copy of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of excisable goods whose sale prices are statutorily fixed does not, in my opinion, detract in any way from the position set out in the preceding para which is the inherent result of the provisions of Section 4 I have adverted to. 14. In order No. 343/84-C the effect of the statutory price fixation does not seem to have been considered. 15. In the result, I would propose an Order allowing the appeal with consequential relief to the appellants. But then, in accordance with the majority opinion, the appeal fails. EDITOR S COMMENTS In cases where there are statutory control prices they are the assessable values for the purpose of Central Excise in view of the provision of Section 4(1)(a)(ii) of the Central Excises and Salt Act, 1944. There is no authorisation under Section 4 or elsewhere for making any add on to such statutory control price except for packing charges under Section 4(4)(d)(i). The majority judgment seems to have confused between tariff values and control prices and ignored that the control price fixed in this case was exclusive of excise duty. The control price in other words is not a cum-duty price. There is no question therefore of re-computing t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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