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TMI Blog1981 (6) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... s set at various places. The petitioner Company clear the Vanaspati under the self Removal procedure without filing price lists as per order passed under Rule 176C (4) of the Rules framed under the Central Excise Act. As far as soaps are concerned, the petitioner Company have been filing price lists from time to time. 3. Section 4 of the Act was amended with effect from October 1, 1975. The petitioners cleared their goods after paying duty thereon and the duty paid included the full price recovered from the dealers without excluding therefrom the post-manufacturing expenses and the selling profits attribute thereto. On November 28, 1979, a Single Judge of this High Court held in the case reported in 1979 (4) E.L.T. (J 625) (Bombay Tyres International Ltd. v. Union of India and Ors.) that the ratio laid down by the Supreme Court under the old Section 4 in Voltas case and Atic Industries case and by the Bombay High Court in I.T.C. case is applicable even to new Section 4. The learned Judge held that the excise duty is leviable only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post-manufacturing costs and profit arising from post-manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim is based upon the fact that an illegal levy was recovered from them by inclusion of post-manufacturing expenses in the assessable value right from October 1975 onwards and the petitioners are entitled to claim refund as the recovery was without jurisdiction. The petitioners claim that they became aware of the correct position of law and discovered the mistake only after the judgment was delivered by this Court in Bombay Tyres International Ltd. case. 6. In answer to this petition, Shri Jagmohan v. Shah, working as Assistant Collector in the office of the Assistant Collector, Jalgaon Division, has filed a return sworn on March 12, 1981. By this return it is inter alia claimed that the remedy adopted by the petitioners in filing the writ petition is not an appropriate remedy and the petitioners should be driven to file a suit in the civil Court. The respondents also claim that the grant of relief to the petitioners would amount to unjust enrichment and that should not be permitted by this Court. It is further claimed that in any event the petitioners are not entitled to the relief of refund from October 1, 1975 onwards as the claim is barred both under Rule 11 of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty levied on manufacturer and can only be imposed on manufacturing operations and the assessable value cannot include post-manufacturing expenses and profits attributable to post-manufacturing and non-manufacturing operations. In this view of the matter, the first ground given by the Assistant Collector while refusing the request of the petitioners for refund cannot be sustained. 8. The second ground given for turning down the claim is that sufficient data was not produced to determine the exclusion of post-manufacturing expenses incurred by the petitioners. In this connection the petitioners have produced a certificate of a Chartered Accountant and the Chartered Accountant has given the certificate on the basis of definition of post-manufacturing (selling and distribution) expenses as per the cost Accounting Records (Vanaspati) Rules, 1972, enunciated in the Department of Company Affairs, Government of India Notification dated November 27, 1972. The Assistant Collector without going into the details of the certificate merely observed that the certificate does not spell out anywhere in detail the selling and distribution expenses and therefore it is not possible to ascertain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a civil Court and seek a decree instead of approaching this Court in its writ jurisdiction. We fail to appreciate what difference would it make by driving a citizen to file a suit in a civil Court, which as experience shows remains pending for several years. Once the constitutional position is clear and it is well settled that the recovery of duty by inclusion of post-manufacturing expenses is totally illegal, then in our judgment, it would be futile to drive the citizen to a long drawn trial in the civil Court. We are satisfied that it would not be proper and adequate remedy. 10. The submission of Shri Govilkar that the claim of the petitioners is barred by Rule 11 of the Central Excise Rules is also without any merit. The levy of Central Excise by inclusion of post-manufacturing expenses is totally without jurisdiction and outside the provisions of Section 4 of the Act and would not attract the bar of limitation prescribed by Rule 11. The ambit and scope of Rule 11 has been repeatedly considered by this Court and it has been held that Rule 11 has no application where recovery of duty is illegal and without jurisdiction. It would be suffice to make a reference to a decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 735 in the case of Hyderabad Asbestos Cement Products Ltd. Anr. v. Union of India Ors. Shri Govilkar relied upon the observations made by the learned Judge in paragraph 32 of the judgment and claimed that the relief should be refused to the petitioners. We are not impressed by this submissions. In the first instance it must be noted that the claim for refund of duty was turned down by the Delhi High Court on the ground that the imposition was perfectly valid. The learned Judge thereafter made certain observations which are clearly obiter in nature. The learned Judge observed that the benefit, if any, of the refund illegally levied excise duty should in all fairness normally belong to the consumers and therefore a question may well be raised that the petitioners cannot be allowed to unjustly enrich themselves to obtain refund. The learned Judge declined to record-any conclusive finding as the question did not specifically arise. Realising this position, Shri Govilkar fall back upon the reference made to the Judgment given by Mr. Justice Krishna Iyer in Special Leave Petition No. 1330 of 1979 to the effect that the benefit of illegally levied price really belong to the actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt and therefore we must decide what exactly the concept of manufacturing cost. We fail to appreciate why it was necessary for the learned Counsel to agitate this contention in the present proceedings. In the first instance we are not called upon to record any conclusion or findings or make observations in respect of the contention which are not required for determination of this petition. Secondly, we fail to appreciate the force in the submission of Shri Govilkar when he urges that the concept of manufacturing cost has not been considered by any Court. The learned Counsel obviously overlooked the decision of the Division Bench of this Court in l.T.C.'s case reported in 1979 (4) E.L.T. (J 476). Shri Govilkar desired to urge that the decision of the Supreme Court in Voltas case and Atics case is being reconsidered and some of the High Courts have made observations which are not in consonance with the decision in I.T.C.'s case. We decline to consider this contention, because in our judgment it is entirely unnecessary to do so in the present case. In any event, we are bound by the decision of the Division Bench in I.T.C.'s case and with which we are in respectful agreement. In our ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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