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TMI Blog1984 (8) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of 25% of the duty leviable on the excess clearances. The base clearance of the appellants was fixed as 114.151 M.T. by the Assistant Collector on 22-12-1978. The appellants had crossed the base clearance figure on 26-5-1978 and consequently were eligible for the duty relief on the excess clearances effected by them during the year 1978-79. On 12-1-1979, the Assistant Collector received a claim for refund of the excess duty paid by the appellants during the period 26-5-1978 to December, 1978 amounting to ₹ 1,46,143.12. The Assistant Collector considered the claim with reference to the Cochin Collectorate Trade Notice No. 54/77, dated 9-3-1977 which provided that in the event of the duty concession not being passed on to consumers, the assessable value of the goods would have to be recalculated in accordance with a formula. Further, the claim for the period 26-5-1978 to 9-7-1978 was, according to the Assistant Collector, hit by limitation under Central Excise Rule 11. An amount of ₹ 23,444.11 on this ground and an amount of ₹ 35,006.88 on the basis of the recalculated assessable value was held by the Assistant Collector to be inadmissible. The balance a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Co. Ltd. v. Union of India in CWP No. 1006 of 1978 [1983 E.L.T. 349 (Del.)]. The Appellate Collector, however, did not follow these decisions though there was no contrary decision, but chose to decide the matter in the light of his interpretation of Section 4 of the Central Excises and Salt Act (called the Act hereafter) though the Assistant Collector had only relied on Trade Notice 54/77 and not on Section 4. The impugned order, therefore, deserves to be set aside for it disregards the aforesaid decisions, it relied on a trade notice which was struck down by the Court and it overlooked the fact that the trade notice deals with cum-duty prices and has no application to ex-duty prices as in the appellants case. (c) The Delhi High Court in Apollo Tyres Ltd. Ors. v. Union of India Ors. - 1980 E.L.T. 428 (Del.) reiterated the decision in the Modi Rubber case. Moreover, it quashed Trade Notice No. 54/77. The decision in 1978 E.L.T. (J 127) was followed by the Andhra Pradesh High Court in Andhra Pradesh Paper Mills Ltd. v. Assistant Collector of Central Excise - 1980 E.L.T. 210 (A.P.). (d) A trade notice is not law and has no statutory force. The Bombay High Court decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his customers even after the base-clearance was exceeded and further, the selling price was inclusive of duty. The decision in that case was ex parte and cannot be taken as a binding precedent. The Bench had not, in that case, noticed that the explanation to Section 4(4)(d)(ii) inserted by the 1982 amendment spoke of the amount of the duty of excise payable and not the rate of duty. 6. We have given our careful consideration to the submissions before us. The issue arising for determination in the present case is whether the redetermination of the assessable value and of the duty liability of the appellants products and the resultant denial of a part of the amount claimed as refund in terms of Notification No. 198/76 was warranted and correct or not. The appellant has vehemently contended it is not and has cited judicial pronouncements in support. The Assistant Collector supported this action on the basis of Trade Notice 54/77, dated 9-3-1977. Let us straightaway say that the Assistant Collector, functioning as a quasi-judicial authority, should not have founded his decision on the Collector s trade notice which, as the Counsel for the appellants has pointed out, is not law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale : * * * * (4) For the purpose of this section, - * * * * * * * * (d) value , in relation to any excisable goods,- * * * * (ii) does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale; * * * * Explanation.- For the purposes of this sub-clause, the amount of the duty of excise payable on any excisable goods shall be the sum total of- (a) the effective duty of excise payable on such goods under this Act; and (b) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the selling price purported to be duty calculated at the rate of 100% ad valorem, would not represent the correct amount of duty payable on the goods. The difference between the two amounts would not be duty and unless this difference is shown to be on account of some element which is, by law, required to be excluded from the computation of the assessable value, it should form part of the assessable value. The Supreme Court in its recent judgment in the Union of India and Others v. Bombay Tyres International Ltd. etc. - 1983 E.L.T. 1896, considered at length the question whether any post-manufacturing expenses are deductible from the price when determining the value of excisable goods. The Court held that the expenses incurred on account of the different factors which have contributed to its value up to the date of sale, which apparently would be the date of delivery, are liable to be included. The Court further held that where the sale is effected at the factory gate, the expenses incurred by the assessee up to the date of delivery on account of storage charges, outward handling charges, interest on inventory (stocks carried by the manufacturers after clearances), charges f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods change hands and not some of the components thereof. The selling price in the present case is admittedly comprised of ex-duty price, an amount towards duty worked out at 100% ad valorem, and the sales tax. This is the normal price from which the assessable value has to be worked out in accordance with the principles laid down in the Section and in the light of the Supreme Court judgment. If this were not so, the difference between 100% ad valorem and 75% ad valorem which is neither the duty payable nor is shown to be a deductible element would escape charge to duty despite its being part of the normal price. 9. We are in agreement with the Counsel for the appellants that a statutory notification is law and cannot be circumscribed by administrative instructions, guide-lines, press notes or trade notices. However, in the present case what is involved is not so much a question of the applicability of a trade notice, which, in terms, was struck down by the Delhi High Court, but the proper application of Section 4 of the Act to the facts of the case which is what the Appellate Collector has done. Our attention has been drawn by the Departmental Representative to two decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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