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TMI Blog1979 (11) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... y of price at an all-India level was maintained during the period relevant to this petition, viz. 22nd April 1968 till 25th January 1969, and a uniform wholesale price list was maintained throughout India. This wholesale price list known as "net dealer pricelist" included all post-manufacturing expenses such as selling and distribution expenses as well as freight on the shipment of goods not only from the place of manufacture to the various depots situate throughout India but also for delivery to the nearest railway station to the destination of the customers. In all the invoices given to the customers the net dealer price list was shown separately and in addition thereto, the customers were required to bear the local sales-tax and other local levies, if any, and such items were shown separately in the invoices. 2. In several parts of India, including Greater Bombay, octroi is levied on goods, including tyres, brought within the limits of the local authority for consumption, sale or use. As the petitioner's factory is located within the limits of Greater Bombay, the tyres manufactured by the petitioner are, therefore, not liable to octroi, unlike the tyres manufactured elsewhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced assessable value, by including in the assessable value of the totality of the tyres manufactured by the petitioner, the said local levy of 2%. The petitioner's appeal was dismissed by the Appellate Collector of Central Excise, viz., the 1st respondent, who by his order dated 24th July, 1974 upheld the four demand notices dated 29th May, 1969. Thereafter, the 2nd respondent issued a demand notice dated 30th September 1974 calling upon the petitioner to pay the amounts demanded in the demand notices dated 29th May 1969 under threat of coercive action. Hence the present petition for an appropriate writ to set aside the impugned order dated 28th May 1969 passed by the 2nd respondent, the four demand notices dated 29th May 1969, the appellate order dated 24th July 1974 passed by the 1st respondent and the demand notice dated 30th September 1974 passed by the 2nd respondent. 4. It was urged by Mr. Joshi, the learned Counsel appearing on behalf of the petitioner, that for the purpose of Section 4 of the Central Excises and Salt Act, 1944, the wholesale price must be computed on the sales made by the petitioner in other places in India which comprised 91% of the total sales and not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-company from its customers on sales made in Greater Bombay did not form part of the petitioner's manufacturing costs and/or manufacturing profits but constituted a non-manufacturing element with the result that the same could not be considered and taken into account for determining the wholesale cash price under Section 4(a) of the Act. On the other hand, it was urged by Mr. Dalal, the learned Counsel appearing on behalf of the respondents, that the 2% local levy recovered by the Petitioner was nothing but a profit by whatsoever name it was called. Mr. Dalal elaborated that the items to be deducted from the wholesale cash price are (i) trade discount, (ii) cost of post-manufacturing expenses on post-manufacturing operations, and (iii) profit derived therefrom, namely, selling cost and rolling profit. Mr. Dalal urges that the 2% extra levy charged by the petitioner was a profit and not a non-manufacturing element and was merely an increase in price and hence a manufacturing profit earned by the petitioner on its sales in Greater Bombay. 8. The meaning of the term "wholesale cash price" is to be found in the decision of the Supreme Court in A.K. Roy and another v. Volta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of Section 4 it cannot be disputed that Section 3(1) is a charging section, which creates the liability to pay the excise duty on the goods produced or manufactured in India and the said sub-section clearly indicates the nature and character of the duty, namely, that it is a tax on production and manufacture of goods, while the provision of Section 4 is in the nature of machinery provision and, therefore, anything said therein must be read so as to carry out the basic concept of excise duty and not so as to militate against that concept. In other words, Section 4 cannot be construed so as to enlarge the ambit of duty by in. including therein the post-manufacturing or non-manufacturing elements......" In para 14 it was observed as under:- "In our view, therefore, there is nothing either in the deeming provision nor in the language of the section which suggests that while arriving at the assessable value of manufactured article the expenses of profits attributable to post-manufacturing activity should or non-manufacturing activity should not be excluded for the purpose of calculating the excise duty payable on such article." 10. Mr. Joshi's contentions are supporte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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