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Showing 61 to 63 of 63 Records

• 1960 (2) TMI 3
  
  Issues Involved:
  1. Liability to pay excise duty.
  2. Definition and identification of the "manufacturer."
  3. Exemption entitlement under Appendix V.
  4. Legality of the demand for excise duty.
  
  Detailed Analysis:
  
  1. Liability to Pay Excise Duty:
  The petitioner, involved in the purchase and sale of groundnuts and groundnut oil, was called upon to pay excise duty amounting to Rs. 10,356.02 nP by the Central Excise authorities for the years 1956-57 and 1957-58. Despite initially consenting to pay the duty in installments, the petitioner later contested the liability, claiming he was not the manufacturer of the excisable goods. The court examined the provisions of the Central Excises and Salt Act, 1944, particularly Section 3 and Rule 7, which mandate that excise duty is payable on excisable goods produced or manufactured in India. The court concluded that the petitioner was liable to pay the excise duty as demanded.
  
  2. Definition and Identification of the "Manufacturer":
  The core contention was whether the petitioner could be considered the manufacturer of the oil extracted from his groundnuts. The petitioner argued that the actual manufacturers were the Mirza Oil Mills and Rameswara Oil Mills, where the groundnuts were crushed. However, the court noted that in his application for a license and request for installment payments, the petitioner had admitted to being the manufacturer. The court found that the petitioner had de facto control over the operations of the mills and that no evidence was presented to support the claim that the mills were paid for their services. The court held that the petitioner was indeed the manufacturer under the Act.
  
  3. Exemption Entitlement Under Appendix V:
  Appendix V of the Act provides certain exemptions from excise duty. The petitioner claimed that the mills were entitled to exemptions for the quantities of oil produced. However, the court pointed out that the petitioner had himself admitted in his communications that he was the manufacturer and was entitled to the exemptions. The court emphasized that exemptions are available to the manufacturer for the first 125 tons of oil produced in a given year, and since the petitioner was the manufacturer, he could not claim exemptions for each mill separately. The court rejected the petitioner's claim for additional exemptions.
  
  4. Legality of the Demand for Excise Duty:
  The petitioner argued that the demand for excise duty was unlawful as the oil had already been sold and was no longer in existence when the demand was made. The court referred to Rule 9, which stipulates that excise duty must be paid before the removal of goods from the manufacturing premises but also allows for the collection of duty even after the removal of goods. The court cited the Federal Court's decision in Province of Madras v. Boddu Paidanna and Sons, which upheld the imposition of excise duty irrespective of the subsequent disposition of the goods. The court concluded that the demand for excise duty was lawful and within the authority of the Central Excise Department.
  
  Conclusion:
  The court dismissed the petition, affirming that the petitioner was liable to pay the excise duty as the manufacturer of the groundnut oil. The petitioner's admissions and lack of evidence to the contrary were pivotal in the court's decision. The exemptions claimed were not applicable beyond the specified limits, and the demand for excise duty was found to be lawful.

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• 1960 (2) TMI 2
  
  Issues Involved:
  1. Method of Calculation for Excise Duty
  2. Limitation on Demand Notices
  3. Violation of Rules of Natural Justice
  
  Issue-wise Detailed Analysis:
  
  1. Method of Calculation for Excise Duty:
  The primary issue revolves around the correct method for calculating the excise duty on cigarettes manufactured by the petitioner. The petitioner argued that the wholesale cash price should be the price at which it sells to its stockists in Calcutta. However, the Excise authorities contended that the assessment should be based on the price at which the stockists or agents sell to an independent buyer in an open market.
  
  The court clarified that the correct interpretation of Section 4 of the Central Excise Act involves three factors: location, time, and method of calculation. The location for determining the wholesale cash price is the factory or nearest place where a wholesale market exists. The time for calculation is when the goods are removed from the factory. The method involves determining the price at which the goods or goods of like kind and quality are sold or capable of being sold in a wholesale market to an independent buyer.
  
  The court found that both parties had misinterpreted Section 4. The Excise authorities' principle of using the price at which stockists sell to independent buyers was incorrect as it did not necessarily reflect the wholesale market price at the factory location or nearest wholesale market. The petitioner's method of using the stockist price was also rejected as it did not conform to the requirements of a wholesale market.
  
  2. Limitation on Demand Notices:
  The petitioner raised the issue of limitation concerning the demand notices issued under Rule 10 and Rule 10A of the Central Excise Rules, 1944. The court noted that no objection was taken regarding the first notice under Rule 10. However, the petitioner argued that the other two notices were wrongly issued under Rule 10A and should have been issued under Rule 10, making them barred by limitation.
  
  The court decided not to address the limitation issue at this stage, given that the assessments were being set aside. The point of limitation was kept open to be canvassed if and when a proper assessment is made.
  
  3. Violation of Rules of Natural Justice:
  The petitioner argued that the abrupt change in assessment methods by the Excise authorities was done without notice or opportunity for representation, violating the rules of natural justice. The court agreed, stating that the determination of value for duty involves complex factors and cannot be done wholly behind the back of the assessee. The evidence relied upon by the authorities should be disclosed to the assessee, allowing them to test the materials and provide their own.
  
  The court emphasized that while the proceedings are not akin to a judicial trial, the rule of natural justice must be observed. The assessee must be given a proper opportunity to challenge the materials used for assessment.
  
  Conclusion:
  The court concluded that the assessments made by the Excise authorities were based on incorrect principles and must be set aside. A writ of certiorari was issued to quash the demand notices, and a writ of mandamus directed the respondents not to proceed based on the invalid notices unless a proper assessment is made. The point of limitation was left open for future determination. No order as to costs was made.

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• 1960 (2) TMI 1
  

  The respondent a partnership firm which, by an agreement was appointed the managing agent. The total commission was a sum of Rs. 3,09,114 accrued to such managing agent. At the oral request, the managing agent agreed to accept a sum of Rs. 1,00,000 only as its commission which was credited to the account of the managing agent. Assessee claimed Rs. 2,09,114 as deduction on account of surrender of income. Held that Rs. 2,09,114 to be accepted as deducible expenditure.

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