9911796707
TMI Blog1980 (10) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... arious customers and dealers at an uniform price fixed by the appellant from time to time. According to the appellant it granted and still grants long term credit facilities to about 90 days to its various dealers in Bombay, Calcutta and Delhi to whom commission was also paid @ Rs.410/-per ton. In allowing such commission and fixing the prices various expenses or charges such as interest on long credit, transport charges, freight, insurance, handling charges, storage charges and godown charges were and are included in the selling costs and selling profits because they relate to post-manufacturing operation. Before May 11, 1968, the date of introduction of the 'Self Removal Scheme', assessment of duty used to be made on physical control basis according to which the assessing officer in each case after being satisfied with the selling price allowed clearance upon production of evidence of payment of the duty payable to the Collector of Central Excise, Calcutta and Orissa Collectorate. After the introduction of the 'Self Removal Procedure' the appellant had been filing with the appropriate Excise Officer for his verification list of goods manufactured by the appellant in various statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise leviable thereon under the said item as is equivalent of Rs. 425/- per metric ton. 7. Excise duty was demanded from the appellant and required to be paid on the basis of the selling price except for deduction, mentioned in the said notification dated September 1, 1962, as amended. The appellant filed pries lists for the purpose of assessment of excise duty under protest. According to the appellant price lists were submitted on the basis of selling price to the customers and dealers and they included the costs and expenses of post-manufacturing operations because it was only on that basis the respondents assessed excise duty and approved the price list submitted by the appellant. Several assessment orders in Form A.R.I. before the introduction of the self removal procedure and in Form R.T. 12 under Rule 173E after the introduction of the said procedure, were made on the basis of the amount mentioned in the statements filed before the Excise Officers by the appellant. 8. On March 2, 1973 the appellant came to know about the decision of the Supreme Court in the case of A.K. Roy v. Voltas Ltd., AIR 1973 SC 225 = 1977 (1) E.L.T. (J 177) and thereupon it discovered that the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and without prejudice to the appellant's rights and contentions. 12. Appellant's further case was that assessments and/or levy as also recovery and/or collection of the alleged excise duty on and from the appellant on the basis of the selling cost and selling profits as aforesaid were beyond the jurisdiction of the respondents and contrary to the provisions of Article 265 of the Constitution of India. 13. On the 6th of March, 1973 the appellant wrote a letter to the Collector of Central Excise with copies to the other respondents, enclosing a statement of price list showing the correct value of the goods manufactured by it for the purpose of Section 4 of the Central Excises and Salt Act, 1944 in accordance with the provisions of the judgment of the Hon'ble Supreme Court in Voltas' case. According to the appellant the said list was the correct price list in terms of Rule 173C of the Central Excise Rules. On the said date the appellant also made an application for refund of the excess amounts realised by the Excise Department. 14. Appellant's further case was that the notification dated 1st September, 1962 made under Rule 8(1) of the Central Excise Rules, 1944 to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rule 173C of the said Rules. On January 31, 1974 the Assistant Collector of Central Excise replied to the appellant's letter requesting it to intimate before February 7, 1974 whether the appellant desired to avail of the procedure for provisional assessment and if it was agreeable to make a written request under Rule 173C (2A). The Assistant Collector also asked the appellant for certain information connected with the matter of according approval to its new price list. On February 7, 1974 the appellant informed in writing to the Assistant Collector that it was agreeable to apply for provisional assessment as suggested in the said letter dated January 31, 1974. On March 1, 1974 the said notification dated September 1, 1962 was cancelled. On March 1, 1974 a revised price list was again submitted in terms of the said Supreme Court decision along with the certificate of a Cost Accountant. Similarly, on March 15, 1974 the appellant submitted its price list on the same line for approval by the Excise authorities. 19. In its writ petition the appellant prayed for quashing the orders of assessment passed by the Excise Officers for the period from 1962 to June 30, 1972 with a claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder self removal procedure it was stated on behalf of the respondents that within seven days after the close of each month, the appellant filed with the proper officer a monthly return under Rule 173G(3) in form R.T. 12 wherein it also included the assessable value, which was same as declared by the appellant in the price lists and approved by the proper officer from time to time. The assessable value was calculated after deduction of 12.5% of rebate from the customer's list price exclusive of duty, rate of duty and the total amount of duty so determined by the appellant was debited by it in such account. Such return also did not refer to any manufacturing or post-manufacturing expenses or profits. The appellant had withdrawn from the procedure of assessment under Section 4 of the said Act and had been availing the concessional assessment under Notification No. 166/62, dated 1st of September, 1962. The price fixed and declared by the appellant from time to time was the ex-factory price at which the goods were available for sale at the factory gate of the appellant and in fact numerous sales were made by the appellant in the usual course of business in which the goods on sale were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve directions to the effect that in respect of matters on which final order was not yet passed, the appellant would submit a revised price list, if not already done, on the basis of the principles laid down in the Voltas' case clearly showing the manufacturing costs and manufacturing profits of the appellant in respect of the goods sold or to be sold by them to the buyers and the respondents were directed to determine the assessable value and levy duty after proper verification and scrutiny of such price list. The respondents were also directed to dispose of the pending assessment cases in accordance with law. 26. With regard to the four periods, i.e., 27-2-1962 to 31-10-1962, 1-11-1962 to 13-3-1963., 14-3-1963 to 15-4-1965 and 16-4-1965 to 5-3-1973 Masud, J. held that the appellant used to remove goods from its factory on the basis of the amount mentioned by it under the column 'real value' in the A.R. 1 forms. One of the columns in the said form mentioned 'real value' and Note II of the said Form stated that-'Real value is the value referred to in Section 4 of the Central Excises and Salt Act, 1944'. Therefore, value declared by the appellant in the said form should be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 4 or that all the impugned orders of assessment prior to December 1, 1972 were nullities or that they were made by the Excise Officers in excess of their jurisdiction. His Lordship further observed that the Excise Officer's jurisdiction to assess the excise duty of the manufactured goods had not been challenged. Similarly, the validity of Rules and statutory forms had not been questioned. Even if it was argued that they were not in consonance with the principles of law laid down in the Voltas' case it could not be urged that the Excise Officers exceeded their jurisdiction in levying duty in the past or acted without any jurisdiction. 30. Further, according to the learned Judge of the Court of the first instance the question whether in calculating the duty on an ad valorem basis, as in the present case, the Excise Officer was justified in including or excluding a particular amount on the ground that the assessable value included the cost of packing charges, freight and commission for distribution etc., was a matter for decision for the Excise Officers and if they erred in including the amount which was not permissible in law there were provisions for appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode of assessment under which the manufacturer could take advantage of a concessional rate of the duty. The question whether Section 4 and the notification under Rule 8(1) were disjunctive or conjunctive had not been discussed in the decision of Voltas' case in the way it had been done in the instant case. Further, the power to exempt duty under the notification connotes the power of the Central Government to levy a duty by a special mode or manner. The mode, manner and nature of exemption is to be examined in determining the ultra vires character of a notification under Rule 8. Even in cases where Section 4 and the notification under Rule 8 are conjunctive and consistent the Central Government while exempting a particular article from duty in fact first assesses some duty. The scope of Rule 8 according to learned Judge is very wide. The duty can be assessed on ad valorem basis by a notification or percentage basis and can even increase or reduce the rates fixed in Schedule 1 to the said Act. The appellant having elected to be assessed under the said notification for the period between 14th March, 1963 and 15th April, 1965 and 31st March, 1972 the Excise Officers cannot be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that impugned assessments were made on the basis of price charged by the appellant to its various customers in different parts of India. Such prices included various items of post-manufacturing expenses i.e., selling cost and selling profits as also selling and administrative expenses and overheads. The above would also include interest on long term credit, transportation charges, freight, insurance, handling charges godown charges, storage charges as well as advertisement travelling expenses, bank charges and miscellaneous other items. According to counsel, from the various returns, assessment orders and other documents disclosed in this case it would appear that apart from the delivery charges various other items which related to post-manufacturing cost and profit were not excluded from the assessable value of the goods. Such items in view of the decision in Voltas' case could not be included in determining the real value or the 'wholesale cash price'. 38. According to counsel, the appellant is an organisation having two wings, viz,, (a) manufacturing of products and (b) sale thereof. For sale of the product manufactured by the appellant its selling organisation incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a specific provision of the Act. Even if the Rule has the strength of the provision of an act by virtue of the language of Section 38 still the Rule or the notification has to be reconciled with the Act, only then it will have the force and effect of the Act. If they are contrary to or inconsistent with any provision of the Act they must give way to the provision of the statute. prima facie the said notification are contrary to and inconsistent with the essence and character of an excise duty. The facture and production of goods can be levied on the manufacturing costs and manufacturing profits only. By the said notification besides manufacturing cost and manufacturing profits selling expenses are taken into consideration for the determination of the value for the purposes of assessment of duty. This is beyond the legislative competency of the Parliament itself. It has been further submitted that how can a delegated authority make a notification which even Parliament cannot make or pass. It is the submission of the counsel that by Section 38 of the Act greater force is given to the notification issued under the said Act than the notification issued under the said Rules because l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are to be excluded while determining value under Section 4(a) of the Act counsel has relied on various decisions, to wit, Indian Tobaco Company Ltd. v. Union of India, 1979 (4) E.L.T. (J 476) (Bom.) ; Madras Rubber Factory Ltd. v. Superintendent of Central Excise, 1979 E.L.T. (J 485) (Mad.); Premier Tyres Ltd. v. Assistcnt Collector of Central Excise, 1979 E.L.T. (J) 490 (Ker); Superintendent of Central Excise v. Madras Rubber Factory Ltd., 1979 E.L.T. (J 89); Indo-National Ltd. v. Union of India, 1979 E.L.T. (J 334) (Andh Pra); Cibatul Ltd. v. Union of India, 1979 E.L.T. (J 407) (Guj); Golden Tobacco Co. Ltd. v. Union of India, 1980 E.L.T. (J 311) (Guj); American Universal Electric (India) Ltd. v. Union of India, 1979 E.L.T. (J 125) (Punj Har.); Alkali Chemical Corporation of India Ltd. v. Union of India, 1979 E.L.T. (J 57) (Cal.) and Bata Shoe Company Private Ltd. v. Collector of Central Excise, (1972) 76 Cal WN 519. 44. Referring to the observation at paragraph 7 of the judgment reported in AIR 1963 SC 98 = 1978 E.L.T. (J 311) (Orient Weaving Mills v. Union of India) and the contention of the respondents to the effect that the notifications issued under the Rules sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, there was no question of any involvement of post-manufacturing expenses or profit in the assessable value of the goods of the appellant. Further, the price charged by the manufacturer (i.e., the appellant) for sale of its goods represented the real value of the goods for the purpose of assessment of excise duty. The only relevant price for assessment of value of the goods for the purpose of excise duty in a case, according to counsel, would be the wholesale cash price which a manufacturer would receive from its sale to the first wholesale dealers, that is, when the goods first enter the stream of trade. For the purpose of imposition of duty it is the first immediate contact between the manufacturer and the trade that made decisive for determining the wholesale cash price and that is measure of the value of the goods for the purpose of assessment of duty. It is also the submission of the counsel that there can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) In the price list of Voltas necessarily those expenses had been neglected. (4) If that was so then when the Supreme Court observed that wholesale price was the list price less 22% trade discount it impliedly held that other expenses relating to sales might be post-manufacturing expenses but deductible in case of first wholesale sale to a wholesale dealer at arms length. Had the position been otherwise then the Supreme Court, according to counsel, would have said that the list price less selling expenses as also less 22% discount, would represent the wholesale cash price under Section 4(a) of the Act. 49. Counsel has further submitted that it is for assesse while filing its price list and at the time of assessment to say that the listed price includes something which cannot be taken into account in arriving at the assessable value. 50. Respondents counsel also submitted that if post-manufacturing expenses of the manufacturer were excludible for the purpose of arriving at the assessable value then the appellant would have claimed and got such exemption. Therefore, in the impugned assessments the assessable value determined by the Department did not include any post-manufacturi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s could not be included or taken into consideration for the purpose of determining ex-factory wholesale cash price. The appellant also accepted the assessments and did not prefer any appeal therefrom. Hence, it cannot now question such assessments. In this connection reliance was placed on the cases reported in AIR 1976 SC 2136: (Thvl. Bombay Ammonia Pvt. Ltd. v. Stale of Tamil Nadu); 30 STS 120; (Andhra Pradesh), (Gurram Sreeramulu, Garlapati Anjanayulu Co. v. State of Andhra Pradesh); (1972) 30 STC 132 (Delhi) ; [Sales Tax Officer v. Indian Wood Products Co. Ltd.) and (1959) 35 ITR 312 : (Commr. of Income tax, Bihar Oirisa v. Rama Krishna Deo]. 53. It is also the submission of the counsel that the appellant has made applications for refund of duty under Section 11 of the Act which are still pending. Therefore, the writ application is not maintainable. In this connection counsel relied on the cases of Mahalaxmi Rice Mills v. Addl. Commr. of Commercial Taxes, West Bengal, (1963) 67 Cal WN 405 and Tilokchand Motichand v. H.B. Munshi, Commr. of Sales Tax, Bombay AIR 1970 SC 898. 54. Regarding the said notifications counsel for the respondents had submitted that Rule 8 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer in order to avail of the exemption from duty. 57. Counsel has also submitted that the appellant having opted for the exemption available under the notification as also having enjoyed the benefit under the same cannot now raise any question regarding its validity. There has been a complete waiver and acquiescence on the part of the appellant. Reference was made to the case of Thvi. Bombay Ammonia Pvt. Ltd. v. State of Tamil Nadu, AIR 1976 SC 2136. 58. According to connsel no illegality is attached to the said notifications. Further, Section 4 of the Act does not lay down any principle or formula for determination of the value for exemption from duty. The expression 'value' in Section 4 of the Act is different from the expression 'value' used in a notification for exemption. Under Rule 8 exemption is granted in respect of excisable goods from the whole or any part of duty leviable thereon. That means that the goods should be both 'excisable goods' and be 'leviable' with the duty. Therefore, the 'value' for purposes of exemption from duty is the real and/or actual value after the duty has been paid and not the deemed value of Section 4 of the Act "for the purpose of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value for the purposes of duty.- Where under this Act, any article is chargeable with duty at a rate dependent on the article, such value be deemed to be- (a) The wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or (b) Where such price is not ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto, Explanation.- In determining the price of any article under this Section no abatement or deduction shall be allowed except in respect of trade discount and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 977 E.L.T. (J 177), facts were that Voltas Limited carried on amongst others the business of manufacturing air conditioners, water coolers and component parts thereof. It organised the sales of these articles from its head office at Bombay as also from its branch offices at Calcutta, Delhi, Madras, Bangalore, Cochin and Lucknow. From those offices it effected direct sales to consumers at list prices and the sales so effected came to about 90 to 95 per cent of its production of the above articles in the factory in question during the relevant period. Apart from those sales, it also sold the articles to wholesale dealers from different parts of the country in pursuance of agreements entered into with them. The agreements with the wholesale dealers for the relevant years contained terms and conditions similar to those mentioned in Exhibit 'A' annexed to the writ petition. The agreements provided, among other things, that the dealers should not sell the articles sold to them except in accordance with the list prices fixed by the respondent, that the respondent would sell them the articles at the list prices less 22 per cent discount, that the dealers would not be entitled to any discou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 a 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 agreements which confer certain commercial advantages upon them. In other words, the sales to the wholesale dealers did not cease to be wholesale sales merely because the wholesale dealers had entered into agreement with the respondent under which certain commercial benefits were conferred up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harges involved in the transport of the articles. As already stated it is not necessary for attracting the operation of Section 4(a) that there should be a large number of wholesale sales. The quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant. The mere fact that such sales may be few or scanty does not alter the true position." In Voltas' case the dispute was whether in calculating the wholesale cash price the consumer's list price or the consumer's list price less 22% discount as was paid by the wholesaler was the real value of the goods under Section 4(a) of the Act. In deciding that question the Supreme Court had to interpret and explain the meaning and scope of the term 'wholesale cash price' appearing in Section 4(a) of the said Act. According to the Supreme Court- "Excise is a tax on the production and manufacturing of goods. Section 4 of the Act, therefore, provides that the real value should be found after deducting the selling cost and selling profits and that the real value can include only the manufacturing cost and the manufacturing profit. The section makes it clear that excise is levied only on the amount representing the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that value was the price at which ICI and ATUL sold the goods to the distributors, and no deduction should be allowed in respect of the discount given by them to the distributors. 75. The Supreme Court came to the conclusion that the assessable value of the dye-stuffs manufactured by the appellants must be taken to be the price at which they were sold by the appellants to ICI and Atul less 18% trade discount, and not the price charged by ICI and Atul to their dealers. The Supreme Court also directed the respondents in that case to refund to the appellants the amount collected in excess of the correct duty of excise leviable in accordance with the principles laid down in that judgment. 76. In Atic's case while explaining the expression 'wholesale cash price' in Section 4(a) as interpreted by Voltas' case the Supreme Court observed as follows (paras 12 and 13) :- "In the first place, as pointed out by Mathew, J., in Voltas' case (supra), excise is a tax on the production and manufacture of goods...... Section 14 of the Act therefore provides that the real value should be found after deducting the selling cost and selling profit and that the real value can include only the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of price, even though on wholesale basis, is not material. If excise were levied on the basis of second or subsequent wholesale price, it would load the price with a post-manufacturing element, namely, selling cost and selling profit of the wholesale dealer. That would be plainly contrary to the true nature of excise as explained in the Voltas' case (supra). Secondly, this would also violate the concept of the factory gate sale which is the basis for determination of value of the goods for the purpose of excise. There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arm's length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise. That would be the wholesale cash price for which the goods are sold at the factory gate within the meaning of Section 4(a). The price received by fie wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealers would be irrelevant to the determination of the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or quantified in accordance with express provisions of law. Assessment mide without application of mind thus would be bad and null and void." 80. Reference in this connection may be made to the case of Asstt. Collector of Central Excise v. National Tobacco Company of India Ltd., AIR 1972 SC 2563 = 1978 E.L.T. (J 416). Liability to assessment for duty would depend upon whether the appellant in fact manufactures dutiable item and the duty is payable thereon under the express provisions of law. See in this connection Photo Optical Company Pvt. Ltd. v. Union of India, 1976 Tax LR 1430 (Cal). 81. The respondent's contention in the instant case is that the ex-factory wholesale cash price is not ascertainable on account of the secret internal arrangement or agreement between the appellant and its customer companies who are, according to the respondent, favoured customers and/or related persons because of the relationship between the customer companies and the holding company of the customer companies as well as that of the appellant as stated hereinbefore. But because of the aforesaid facts we are unable to hold that the customer companies are favoured customers or 'related person' e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured by the appellant on the basis of manufacturing cost and manufacturing profit only for the year 1961 to the date of the application and direct the respondents to refund to the appellant the amount found to have been levied and collected in excess of the correct duty of Excise leviable in accordance with the principles laid down in this judgment." 84. In the case of Union of India v. Vazir Sultan Tobacco Company Limited, 1978 E.L.T. (J 461), similar question came up for consideration before a Division Bench of the Andhra Pradesh High Court and following the decisions in Voltas and Atic cases the court held that excise duty, which was a duty payable on manufacture or production of goods, could only be levied on the aggregate of manufacturing costs and manufacturing profits. Even if on the first sale to the first wholesale dealer there was an element other than that of manufacturing cost and manufacturing profit and so the price charged to the first wholesale included post-manufacturing cost, such post-manufacturing cost must be deducted by the Excise Authorities in assessing the duty leviable on manufacturing cost and manufacturing profit. 85. In Vazir Sultan's case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are necessarily incidental to the process of manufacture, they will also be part of the manufacturing costs. But if it can be demonstrated by a particular manufacturer that, even on the first sale to the first wholeseller dealer there is an element other than that of manufacturing cost and manufacturing profit and thus the price charged to the first wholesale includes post-manufacturing cost must be eliminated by the excise authorities from their calculations. It must be pointed out that there may be two broad categories of manufacturers. The first category consists of manufacturers who only manufacture in the case of Atic Industries case but do not sell the goods except to the first wholesaler with whom they have arrived at an agreement at arm's length. The second category is the category of manufacturer who not only manufacture, but also sell and incur the expenditure for the sale of goods as distinguished from manufacturing cost and manufacturing profit and if it can be demonstrated that, when the manufacturer of the seccnd category sells the goods to the first wholesaler and incurs some post-manufacturing costs which have entered into the calculations and that the price charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at which dealers were to sell to the consumers were again uniform throughout India) billing price reflected not only the manufacturing cost and manufacturing profit but also the freight, insurance and the sale promotion cost and promotion cost attributable to overheads of sales organisation and therefore it could not represent the wholesale cash price of an article under Section 4(a). Again where various products of the company were sold on its uniform price list and according to the company the list prices comprised not only manufacturing cost and manufacturing profit but also post-manufacturing expenses, octroi, freight, interest, service charges, royalty, publicity, advertisement charges and selling expenses incurred in the marketing and distribution, those post-manufacturing cost and expenses were to be excluded for the determination of value under Section 4(a). Similarly, where net dealer price of the company regarding tyres and other goods included equalised freight, insurance expenses and distribution expenses referable to sales organisation alone, travelling expenses of sales and inspection staff and advertisement expenses wholly attributable to sale promotion and all inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... App 258 : 1978 E.L.T. (J 260) and Ford Motor Co. Ltd. v. Secretary of State, (1938) 65 Ind App 32 : (J 978) E.L.T. (J 265), the expression "wholesale cash price" was considered by the Judicial Committee in the context of import duty leviable under the Sea Customs Act, 1878. It however appears that the question of determination of real value under Section 4 and the expression "wholesale cash price" appearing in Section 4(a) of the Central Excises and Salt Act, 1944 for the first time directly arose for consideration and was determined in Voltas' case. Therefore, it cannot be said that the law with which we are concerned in this appeal was amply clear in view of the decisions of the Judicial Committee. 93. The case of British India Corporation v. Collector of Central Excise, AIR 1963 SC 104 = 1978 E.L.T. (J 307) also in our view, is of no assistance to the respondents in the instant appeal. The observation in para 10 of the report relied upon on behalf of the respondents, it appears, was made on the basis of the concession made by the appellant in that case. 94. In AIR 1939 FC 1 (In the matter of Central Provinces and Berar Sale of Motor Spirit and Lubricants Taxation Act, 1938) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes any element other than manufacturing costs and manufacturing profits. If any post-manufacturing cost or profit arising from post-manufacturing operation is included in the price charged by the manufacturer to a first wholesale dealer then that has to be excluded according to the decision of the Supreme Court and of other High Courts as stated earlier. In the instant case stress was mainly given on behalf of the Department on the facts that price charged by the appellant to a wholesale dealer in respect of sale at the factory gate should be taken as 'wholesale cash price' and further the price declared by the appellant from time to time in various forms and price lists were stated to be the wholesale cash price and duty was calculated and levied on that basis. According to Department such price lists were binding on the appellant. But if such price lists were not in accordance with the law then neither they could be said to be binding on the appellant nor would create any estoppel against it. Considering the pleadings and the records of the case it appears that the prices declared by the appellant in its various returns, forms and in the price lists submitted to the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessment of excise duty as contended on behalf of the Department, has been laid down by the said notifications and, if so, what is the effect thereof. 98. The Departments case is that the said notifications provide, for an alternative method of assessment and the appellant has availed of the procedure of concessional assessment under the said notifications. 99. According to the said notifications 'value' is to be calculated on the price specified in the price list and that the procedure of assessment elected by the manufacturer shall apply uniformly to all the 'Plastics, all sorts' cleared by him. It appears to us that the said notifications are not legal or valid. Whether they are considered as part of the Act or not the same result would follow. The notifications were issued pursuant to Rule 8 which was made in exercise of the power conferred by Section 37(2)(xvii). The scope of the said clause and the said Rule is limited to the grant of exemption from duty. They cannot be construed as providing for an alternative mode of assessment, far less any mode of assessment which is contrary to any of the statutory provisions. Calculation of value on the basis of price list as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und of duty are of no relevance in view of the decision in the case of Electric Lamp Manufacturers (India) P. Ltd., (1980) 2 Cal HN 49 : 1981 E.L.T. 37 (Cal). Further, as slated hereinbefore the law on the point became well settled directly in the Voltas' case. 102. Therefore, the above Supreme Court decision, in our view, is of no assistance to the respondents. In the above view of the matter other decisions referred on behalf of the respondents viz. Gurram Sreeramulu Garlapati Anjaneyulu Co. v. State of Andhra Pradesh, (1972) 30 STC 120; Sales Tax Officer v. Indian Wood Products Co. Ltd., (1972) 30 STC 132 (Delhi) and Commr. of Income Tax, Bhiar Orissa v. Ram Krishna Deo, (1959) 35 ITR 312 also do not help the respondents. 103. It, therefore, appears that for the purpose of determination of value under Section 4 of the Act in connection with the assessment of excise duty post-manufacturing cost and profits arising from post-manufacturing operation are to be excluded. In the instant case, it appears, that assessments were made on the basis of the prices declared by the appellant in the relevant forms and the price lists submitted by it with the Excise Authorities. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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