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TMI Blog1981 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... d for home consumption on or after the first day of April in any financial year by or on behalf of a manufacturer from one or more factories were exempted from the payment of excise duty laviable thereon, provided that the total of the value of capital investment made from time to time on plant and machinery installed in the industrial unit in which the goods were manufactured was not more than Rupees 10 lakhs; that this exemption was not applicable to a manufacturer if the total value of all excisable goods cleared by him or on his behalf in the preceding financial year had exceeded Rupees 30 lakhs, and that the exemption applied only to the first clearance for home consumption up to a value not exceeding Rupees 30 lakhs during a financial year subsequent to 197778. The notification explained that in determining the value of such clearances the value of goods cleared for captive consumption within the factory was not to be taken into account. 4. The petitioners satisfied all the requirements of the said exemption and were, consequently, not assessed to excise in respect of the connecting rods processed by them on job work and were not required to take in that behalf an excise li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application of the 1979 notification to the petitioners' job work. On 24th August, 1979 the petitioners wrote to the Assistant Collector, Central Excise Division, Kolhapur, on the subject of computation of value for determination of duty liability with reference to the 1979 notification. They stated that the Jurisdictional Superintendent of Central Excise had informed them that, for the computation of the value limit to determine the duty liability as contemplated by the 1979 notification, the value in respect of the job work undertaken by them would be taken as the value of raw material plus the job work charges charged by them as determined under Section 4 of the Act. The petitioners contended that such mode of computation of value had no support in law. They required the Assistant Collector to intimate to them whether this procedure had the concurrence of the Central Board of Revenue to enable them to take up the matter with them. On 7th September, 1979, the Assistant Collector laconically replied that the decision of the Superintendent, Central Excise, "is correct as per law". 7. Pursuant to this communication of the Assistant Collector the petitioners were compelled to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal contention raised by the respondents in their affidavit in reply is based upon Section 4 of the Act. The submissions of Mr. Govilkar before us were based principally upon Section 4 of the Act. It is, therefore, convenient to take up this argument, which, indeed, goes to the root of the matter, at the outset. Section 4(1) of the Act, which is material,reads :- "Valuation of excisable goods for purpose, of charging of duty of excise.- (1) Where under this Act, the duty of excise is chargeable on any excisable goods reference to value, shall, subject to the other provisions of this section, be deemed to be- (a) The normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessees 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: Provided that- (i) Where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw material the value of the raw material had to be taken into account for the purposes of determining the real value of the manufactured goods. He relied upon a judgment of the Allahabad High Court in Ganga Dhar Ram Chandra v. Collector, Central Excise, 1979 E.L.T. (J 597). This was a case in which a firm, which manufactured and sold vegetable non-essential oils, took oil seeds belonging to it to other oil mills and got the oil manufactured there upon payment of manufacturing charges. It was contended by the excise authorities that the firm was liable to pay excise duty even on the oil manufactured at its instance by other oil mills. The Court posed this as being the real question that arose for determination: was the firm the manufacturer of the oil manufactured by other oil mills out of oil seeds supplied by it. In para 5, upon which Mr. Govilkar placed great reliance, the Court held that the oil manufactured by the other oil mills was excisable. The Court concluded that it was not the firm which was the manufacturer but the other oil mills which had manufactured the oil at its instance. Mr. Govilkar wanted us to read the observations in pare 5 as implying that the real va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had to be taken into consideration was the value of the clearances and not the value of the goods themselves. In his submission, in the case of goods made on job work, such was done by the petitioners, the value of the clearances would only be the job work charges shown upon the invoices which accompanied the goods when they were cleared. He drew support for the distinction from a notification issued under the Central Excise Rules in relation to Section 174A of the Act, dealing with the exemption of goods or categories of manufacturers from the provisions requiring an excise licence. The notification states, inter alia, that exemption from excise duty leviable on goods may be granted "(a) based on the value of the goods "or" (d) based on the value of clearances made in a financial year". In Mr. Hidayatullah's submission, there was thus a distinction recognised by the excise authorities themselves between the value of goods and the value of clearances. Mr. Govilkar on behalf of the respondents suggested that, in either event, the value had to be the value of the goods and that what clause (d) in the aforesaid notification referred to was an exemption based on the value of clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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