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TMI Blog1970 (4) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. The company is supplying these dyes in bulk packings in drums and its price do not have any extra charge for these drums. After the Ciba purchased dyes, the Ciba repacked these goods in smaller containers. It is the case of the company that Ciba is absolutely free to deal with the dyes after receiving them for the petitioner company. The Ciba sells these dyes to its own customer in its own packing under its own name and label and after reblending and/or reprocessing. The Ciba sold these dyes to its customer in bulk containers as well as in small containers. For bulk containers, the Ciba charges no extra packing charges to their customers but for small containers, they charge extra packing charges. The smallest size of 1/4 kilo had the packing charge of ₹ 2.60 per kilo while for the packing 25 kilos, extra packing charge was only 0.45p. per kilo. The excise authorities had in the first instance approve the prices and had assessed these goods. However, by the notice dated January 31, 1962, respondent No. 3 Superintendent informed the company that separate packing charges should be included in the price list. The company submitted its reply to his notice. The respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t delivery operations by the Ciba and on the petitoner s own admission had subsequently reprocessed, reblended and reassorted the products and marketed them in smaller packages. They have also stated that the Ciba sells these goods to their own customers under their particular label or nomenclature. The authorities have tried to support this order on these grounds. At the hearing Mr. Sorabji raised the following points : (1) That in respect of Ciba Atul Dyes the assessment should have been on the basis of the price charged by the company to Ciba and not on the Ciba prices. (2) That, in any event, the excise authorities had no jurisdiction to include repacking charges of Ciba of assessable value for the purposes of excise levy under Section 4(a) of the Act. (3) That the demand notices, in any event, be issued only under rule 10 on the ground of short levy and of demands beyond three months limitation period wholly incompetent. (4) That the order of the Collector, dated April 3, 1964, violates the essential principles of natural justice as no personal hearing was given to the company and as the authority abdicated its functions by seeking directions of higher author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t over an open market at the factory side. That is why the second part of section 4(a) would apply in the case of Ciba Atul Dyes only where the prices of Ciba would have to be taken into account. That alone, however, would not justify a different basis being adopted for arriving at the assessable value by including the packing charges. There is neither logic nor principle to justify any distinction being made between these two cases. Mr. Vakil rests his entire argument to make a distinction because of difference of language in two parts of Section 4(a). Section 4 (a) runs as under : 4. Determination of value for the purpose of duty. - Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value be deemed to be - (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. the time factor which is provided which governs both the parts which would clinche this issue. If we are to take the wholesale cash price of the excisable article at the time of the removal from the factory or the place of manufacture or product, it is obvious that if there are other activities which have taken place after the removal of the excisable article which has contributed to an increase in the price, those factors would have to be included. What we are concerned with is that the excisable article which was charged with excise duty at the time of removal from the factory or other premises of manufacture or production. There is no dispute in this case that both the Atul dyes or Atul Ciba dyes at the time of their removal from the petitioner company s factory were only in the original state of bulk of packing. It is only when they are removed from the site of the factory or the place of production of manufacture when a subsequent activity takes place by other trader viz. Ciba who packs it in smaller size container. There is also no dispute on facts that even the other trader, who is not the agent of the company but which sells independently its products to its own custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charge sought to be levied by the excise authorities on the packing charges of the Ciba on the ground that it had repacked the goods in smaller containers would be wholly ultra vires and outside the scope of section 4(a). Mr. Vakil in this connection had also argued that was to be the wholesale unit is a pure question of fact to be considered and determined by the excise authorities. If, therefore, the wholesale market is even for the smaller containers that price can be taken as the relevant wholesale unit. In this connection Mr Vakil ignores the fact that this would be true only if the company had this wholesale unit at the time when the article was removed from its factory. If the company had packed its goods in smaller containers and if there was separate wholesale market at the time of removal of such goods, of course, such packing charge would be included in the company prices. In the present case, however, this kind of wholesale unit comes into existence only after the goods are removed from the factory and when Ciba as per exigencies and requirements of its customers puts in the extra effort to repack the goods in the smaller containers. Therefore, even on this ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der was confirmed in appeal and, therefore, no question arose of confirming the demands in question. If a technical plea of Mr. Vakil is to be met only a technicality, these demand notices are not confirmed and, therefore, there would be no question of any appeal being filed. In fact, even the authorities have always considered that they were seeking to change the basis of the earlier assessment and that is why two earlier orders are passed and the entire basis of assessment was really as per the final order, in pursuance to which consequential steps were taken to issue demand notices. That is why, there are no final confirmation orders passed in July, 1964. In any event, the existence of an adequate alternative remedy is not a fetter. In the exercise of jurisdiction of this Court as it is only one of the factors to be considered. After the decision of the Supreme Court in Bhopal Sugar Industries Limited v. Sales Tax Officer, Bhopal AIR 1967 SC 549, the legal position is well settled that the jurisdiction of the High Court under Article 226 is normally not be exercised by entertaining writ petitions against the order of taxing authority when the taxing statute for this nature provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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