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TMI Blog1984 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... s the charge so levied was Rs. 150/- per package for 'N' Model refrigerators and Rs. 115/- per package for'P-3' and 'P-4' models. After April 1982, the charges were increased to Rs. 200/- and Rs. 165/- respectively. 3. The practice of levying a separate charge for secondary packing has been in vogue for a long time. The petitioners, during the relevant period, sold approximately 40% of their refrigerators to wholesale dealers in Bombay, wrapped in a polythene cover. The balance 60% of the refrigerators were sold and delivered to wholesale dealers outside Bombay. 4. It is the case of the petitioners that these refrigerators are sold at the factory gate to wholesale dealers in Bombay without the special secondary packing. Such special secondary packing is neither essential nor necessary for the purpose of marketing the refrigerators in the wholesale market. The charge levied for such packing should, therefore, not be added to the wholesale price for the calculation of excise duty payable on the refrigerators. 5. Under rule 173-C of the Central Excise Rules the petitioners filed a price list dated 20th October, 1977. For arriving at the assessable value of the refrigerators unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hy excise duty sought to be levied as a result, should not be recovered under Section 11A of the said Act. 8. The show cause notice of 11th January, 1983 required the petitioners to show cause why the amounts "erroneously" refunded in cash to the petitioners should not be recovered from them. This notice covered the refunds granted for the period from July, 1980 to November, 1980. 9. The petitioners have challenged these show cause notices as being without jurisdiction. They have also submitted that the issue is concluded by the order of the Appellate Collector dated 28th October, 1980 which is final and binding on the Department. The petitioners have also submitted that the show cause notices amount to an attempt by a subordinate officer to review the order passed by a superior officer and such a review is wholly without jurisdiction. The petitioners have submitted a chart relating to these show cause notices, the period to which they pertain and the amounts claimed under these show cause notices, in order to show that a substantial portion of the claim which is the subject matter of these notices is barred by limitation under the provisions of Section 11 A of the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment. The Department was under an obligation to follow the earlier Order. 13. In the case of Mercantile Express Co. Ltd. v. Assistant Collector of Customs and Others reported in 1978 E.L.T. (J 552) the Calcutta High Court held that the Customs authorities were bound by their own decisions in administering taxing statutes. It observed : "The Custom now say that they are not bound by their previous decisions. Whether the doctrine of precedents applies in its full rigour to Administrative Agencies and Officers, and whether a reasonable latitude should be given to them or administrative Tribunals to correct or modify their previous decisions may still remain debatable controversy in the world of law; nevertheless I am clearly of the opinion that neither the Appraiser nor the Collector of Customs can change his mind from time to time in respect of the same articles by assessing them in the case of one importer under one Section and then assessing them for another importer under different Section. To allow the Customs to do so will lead to utter confusion on the very basis and principles of taxation and grave uncertainty in business and foreign trade of India." What is true of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). According to him, by virtue of the decision of the Supreme Court the position in law has changed. In the light of this fact the show cause notices should be held as justified; and they cannot be said to be without jurisdiction. If these submissions were to be accepted, it would amount to upholding the validity of the show cause notices on the basis of a subsequent change in the law (assuming that there is such a change). There is no warrant for such a position being accepted in law, especially when no retrospective change in the law has taken place. 18. In the case of Jenson and Nicholson (India) Limited and another v. Union of India and others reproted in 1984 (17) E.L.T. 4 (Bom.) this High Court was required to consider a case where the petitioners had filed a price list in June,1977 claiming certain deductions. The Assistant Collector of Central Excise by his order of 1st September, 1979 had allowed only some of the deductions claimed by the petitioners and not others. In respect of the deductions which had not been allowed, the petitioners preferred an appeal and thereafter a revision application. In the meantime, the Supreme Court delivered the judgment in the Bombay Tyre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11A. From the chart it is clear that out of the total claim of Rs. 99,10,504.54 claimed by the respondents under these show cause notices, claims (approximately) of Rs. 45,91,871.54 are barred as beyond the time prescribed in Section 11A. The petitioners, therefore are right when they contend that a substantial portion of the amount claimed is barred by time. In any case, since the show cause notices are without jurisdiction, it is not necessary to examine the various claims made in the show cause notices in detail in order to ascertain the exact amount of such claims which are time-barred. 20. The respondents also contend that they should be allowed to proceed with the show cause notices. It is open to the petitioner to go in appeal from the orders that may be passed in respect of the show cause notices. The respondents submitted that Article 226 of the Constitution should not be- resorted to at the stage of the issue of show cause notices. In the present case however, the show cause notices are wholly without jurisdiction and hence the respondents can be prevented from proceeding with the show cause notices. In the case of Light Roofings Ltd. v. Superintendent of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. Explanation. - In this sub-clause "packing" means the wrapper, container, bobbin, pirn, spool, reel, or wrap beam or any other thing in which or on which the excisable goods are wrapped, contained or wound;" In interpreting the Section the Supreme Court has observed that the Explanation refers to the packing in which the goods are ordinarily sold in the recourse of wholesale trade. The Supreme Court goes on to say that the cost of primary packing, that is to say, the packing in which the article is contained and in which it is marketed for the ultimate ordinary consumer, must be regarded as a part of the value of the goods within Section 4(4) (d) (i). It gives the example of a tube of tooth paste or a bottle of tablets in a tube of tooth paste or a bottle of tablets is marketed for the ordinary consumer in the cardboard carton. This is the primary packing, the cost of which must be included in the value of the goods for the purpose of excise. The Supreme Court goes on to observe that the secondary packing can be of different grades, e.g. the secondary packing may consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of wholesalers in different areas. Section 4(1) (a) (i) of the said Act contemplates different prices to different classes of buyers e.g. if goods are sold at a special price to a Government Department or to a defence establishment, a separate price list can be filed to show that for a different category of buyers a different normal price is charged. But wholesale dealers in India cannot be considered as belonging to different classes simply because they are located in different towns or cities. Unless there are different classes of buyers, there cannot be different normal prices for excise purposes under Section 4. The petitioners however, will have to file different price lists qua wholesale dealers in Bombay and in other remoter areas, as the value of packaging will differ. An interpretation of the Supreme Court judgment which requires the petitioners to file such separate price lists is not warranted. Such different price lists for wholesalers in different areas are not contemplated under Section 4(1) (a) (i). Only the value of the polythene covers is required to be included in the price list of the refrigerators, because this packing, whether you call it primary or se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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