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TMI Blog1991 (12) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to the Hon ble High Court of Bombay, on certain points of law allegedly arising from the common order Nos. 801-802/WRB/91 dated 19-4-1991 passed by this Bench, disposing of two appeals filed by the applicants. 2. Facts and issues involved in these two appeals disposed of by this Bench can be briefly stated as below : 3. The applicants, who are manufacturers of cigarettes, received certain damaged/unsold cigarettes from their dealers. The said cigarettes are reportedly received back in their factory under due intimation to the Central Excise Department, and these damaged cigarettes, after verification by the excise officers, are reportedly taken for remaking cigarettes and such remade cigarettes were cleared on payment of duty. They, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the applicants. 4. Following questions have been sought for reference :- 1. Whether an amount admittedly paid by the applicants (by way of credit notes) was not the market value of the damaged cigarettes under clause (vi) of Rule 97(1) of the Central Excise Rules. 2. Whether the Tribunal was right in discarding a methodology prescribed and adopted by the Department in the applicants own case. 3. Whether the Tribunal was right in discarding the verifiable method prescribed by the Department (Deputy Collector) in favour of a proforma offer on the face of the fact that there is not going to be any sale. In other words, discarding a verifiable method to that of a fictional offer as the basis? 4. Whether under clause (vi) refund wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were returned to them unsold by the dealers because they were damaged. This Bench has rejected the plea that the value of credit notes issued by the applicants cannot be taken to be the market value of the damaged cigarettes. This is a point of law, as it involves interpretation of the term market value of the excisable goods returned. This Bench has mainly gone on the ground that the credit note issued by the applicants to the dealers was to reimburse the value of the original cigarettes. Hence it could not be taken to be the sale price or re-purchase price of the damaged cigarettes. However, in this case, the applicants did not want to spoil their reputation in the market. Hence they have offered to take back the goods and compensate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the damaged cigarettes and even the value of the cut tobacco is not furnished before the Assistant Collector so that he could form an opinion as to whether the market value of the retrievable material is more than the duty paid. Rule 97 does not contemplate reimbursement value and it is foreign to Rule 97. He also pleaded that the cost of reimbursement can only be deemed to be the value of the good quality cigarettes originally cleared and cannot be equated with the value of damaged unsold cigarettes returned. The position is clear in Rule 97 itself and hence no point of law arises. 8. As regards questions at Ser. 2 and 3 above, he pleaded that the Bench has rejected the formula suggested by the Deputy Collector based on appreciation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the damaged cigarettes returned, opinion for arriving at whether it is less than the amount of duty originally paid cannot be formed and hence rejected their appeals. On a plain and straight reading of the aforesaid clause it leads us to the aforesaid conclusion; because what is referred to is the market value of the excisable goods at the time of return to the factory. This would mean that when the damaged goods are returned to the factory, what is their market value, and that value, in the opinion of the Assistant Collector, should not be less than the amount of duty originally paid at the time of their clearance from the factory. The documents pertaining to return of the damaged cigarettes perused by us indicated that the dealers were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief has to be extended by making the rule workable and such a rigid interpretation would make the rule redundant in respect of cigarettes, especially when that item was not excluded from the purview of that Rule during the period in question. 12. For making a reference to the High Court, it should be a point of law and the point of law should arise out of the order passed by the Tribunal. If that point of law has not been settled one way or other, by way of any authoritative pronouncement from the High Courts, or from the Supreme Court, and if there is a possibility of another view existing, it calls for a reference to the High Court. Hence in this case, adopting the aforesaid yardstick, we find that Rule 97, prior to its amendment to e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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