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TMI Blog1976 (4) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner's products manufactured at their factories in Kottayam including the Muttambalam Unit from the period May 1970 onwards covered by Exts. P2 to P9". Additional prayers have been added in that O.P. by orders dated 28-2-1974 on C.M.P. No. 13722 of 1973 and 3-6-1975 on C.M.P. No. 3146 of 1974. 2. The learned Judge observed thus in paragraphs 6 and 7 of the judgment :- "6. Hence the petitioner is entitled to succeed in O.P. 1290 of 1973. The respondents will levy excise duty on items manufactured by the petitioner taking into account the manufacturing cost and the manufacturer's profit and that would be determined in accordance with what has been said in this judgment. 7. The connected petition, O.P. 1524 of 1973, is for refund of the amounts wrongly collected as excise duty in the past. Of course, no relief was obtained from the department by the petitioner in the light of the view taken by it. But in the light of what I have said about the liability to pay excise duty, the question calls for a fresh approach. Since I am directing the authorities to look into the matter of the liability of the petitioner that should apply equally well to the prayer for refund also. That al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld". The petitioner is having a factory at Kottayam in which factory she manufacture of' automobile tubes and other rubber products was commenced from 1970. The petitioner company has a sales and technical organisation independent of the manufacturing units. There is no ex-factory price for the products manufactured by the petitioner and normally no contract is entered into for the sale of its product for delivery at the factory gate. On the other hand the goods are sent over to the sales depots of the petitioner company situate in various places in India and irrespective of the distance of the depots from the factory or its location goods are sold at a uniform price in all these depots. There are two prices fixed for the products, one of them is the billing price and the other the price at which it is sold to the consumers. The billing prices are the prices at which the goods are sold at the depots to dealers. As stated earlier this is the same all over India. The prices at which the dealers are to sell these goods to the consumers are again uniform throughout India. The petitioner has all along been paying excise duty under Section 3 of the Central Excises and Salt Act, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... think that for a wholesale market to exist, it is necessary that there should be a market in the physical sense of the term where articles of a like kind or quality are or could be sold or that the articles should be sold to so-called independent buyers. Even if it is assumed that the latter part of Section 4(a) proceeds on the assumption that the former part will apply only if there is a wholesale market at the place of manufacture for articles of a like kind and quality, the question is what exactly is the concept of wholesale market in the context. A wholesale market does not always mean that there should be an actual place where articles are sold and bought on wholesale basis. These words can also mean the potentiality of the articles being sold on a wholesale basis. So, even if there was no market in the physical sense of the term at or near the place of manufacture where the articles of a like kind and quality are or could be sold, that would not in any way affect the existence of market in the proper sense of the term provided the articles themselves could be sold wholesale to traders, even though the articles are sold to them on the basis of agreement which confer certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturing profit but the freight, insurance and the sale promotion cost and the portion of the cost attributable to overheads as far as the sales organisation is concerned. This was the specific contention of the respondent and the contention is acceptable. On the wording of the section and as it is interpreted by the Supreme Court, there is no justification for taking the billing price, unless it be as contended by the learned Advocate-General that it is possible to postulate that on the facts of the cases it is the latter part of Section 4(a) of the Act that should apply. We must therefore now turn to that aspect. The Advocate-General contended that it is an admitted fact that the respondent does not effect any sales of the manufactured articles at the site of manufacture. It is also contended that there is no material and not even an averment that there are sales of articles of like kind and quality at the site of manufacture. It was therefore urged that the authorities were right in taking the billing price which represented the wholesale cash price at the nearest place where such market existed. This argument fails to take note of two specific relevant factors. In paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations in such and similar cases are of varying strength and being obiter dicta we should not place too much weight on those observations. The observations made by the Supreme Court in H.H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur and others etc. v. Union of India, AIR 1971 S.C. 530 are observations made by the Supreme Court itself with regard to the Court's earlier decision. It is certainly open to the Supreme Court to make those observations or even overrule the earlier decisions as has been held In re : Bengal Immunity (AIR 1955, S.C. 661). But we do not think that the High Courts can ignore even observations made by a superior court which are in their nature obiter. We think we are bound by these observations. We must add that we are not satisfied that the particular observations on which reliance was placed by the respondent were obiter. In both the decision the Supreme Court had to deal with the scope and ambit of Section 4 bearing in mind the concept of Excise Duty and Section 3 of the Act, and construe Section 4. The facts of the case in A.K. Roy and another v. Voltas Ltd., AIR 1973 S C. 225 [1977 E.L.T. (J 177)] indicated that certain percentages of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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