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TMI Blog1984 (8) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... tification were eligible for exemption from duty to the extent of 25% of the duty leviable on the excess clearances. The base clearance of the appellants was fixed as 114.151 M.T. by the Assistant Collector on 22-12-1978. The appellants had crossed the base clearance figure on 26-5-1978 and consequently were eligible for the duty relief on the excess clearances effected by them during the year 1978-79. On 12-1-1979, the Assistant Collector received a claim for refund of the excess duty paid by the appellants during the period 26-5-1978 to December, 1978 amounting to ₹ 1,46,143.12. The Assistant Collector considered the claim with reference to the Cochin Collectorate Trade Notice No. 54/77, dated 9-3-1977 which provided that in the event of the duty concession not being passed on to consumers, the assessable value of the goods would have to be recalculated in accordance with a formula. Further, the claim for the period 26-5-1978 to 9-7-1978 was, according to the Assistant Collector, hit by limitation under Central Excise Rule 11. An amount of ₹ 23,444.11 on this ground and an amount of ₹ 35,006.88 on the basis of the recalculated assessable value was held by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated by Delhi High Court in Indian Aluminium Co. Ltd. v. Union of India in CWP No. 1006 of 1978 [1983 E.L.T. 349 (Del.)]. The Appellate Collector, however, did not follow these decisions though there was no contrary decision, but chose to decide the matter in the light of his interpretation of Section 4 of the Central Excises and Salt Act (called the Act hereafter) though the Assistant Collector had only relied on Trade Notice 54/77 and not on Section 4. The impugned order, therefore, deserves to be set aside for it disregards the aforesaid decisions, it relied on a trade notice which was struck down by the Court and it overlooked the fact that the trade notice deals with cum-duty prices and has no application to ex-duty prices as in the appellants' case. (c) The Delhi High Court in Apollo Tyres Ltd. & Ors. v. Union of India & Ors. - 1980 E.L.T. 428 (Del.) reiterated the decision in the Modi Rubber case. Moreover, it quashed Trade Notice No. 54/77. The decision in 1978 E.L.T. (J 127) was followed by the Andhra Pradesh High Court in Andhra Pradesh Paper Mills Ltd. v. Assistant Collector of Central Excise - 1980 E.L.T. 210 (A.P.). (d) A trade notice is not law and has no sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee charged excise duty at the full rate from his customers even after the base-clearance was exceeded and further, the selling price was inclusive of duty. The decision in that case was ex parte and cannot be taken as a binding precedent. The Bench had not, in that case, noticed that the explanation to Section 4(4)(d)(ii) inserted by the 1982 amendment spoke of the amount of the duty of excise payable and not the rate of duty. 6. We have given our careful consideration to the submissions before us. The issue arising for determination in the present case is whether the redetermination of the assessable value and of the duty liability of the appellants' products and the resultant denial of a part of the amount claimed as refund in terms of Notification No. 198/76 was warranted and correct or not. The appellant has vehemently contended it is not and has cited judicial pronouncements in support. The Assistant Collector supported this action on the basis of Trade Notice 54/77, dated 9-3-1977. Let us straightaway say that the Assistant Collector, functioning as a quasi-judicial authority, should not have founded his decision on the Collector's trade notice which, as the Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee 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 : * * * * (4) For the purpose of this section, - * * * * * * * * (d) 'value', in relation to any excisable goods,- * &em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise payable". According to the explanation, it is only the effective duty of excise payable on excisable goods under the Act (and other Central Acts, if any) and "the effective duty of excise" has been defined to be, in a case where an exemption notification under the Acts is for the time being in force, the duty of excise computed with reference to the rate specified in such Act in respect of the goods as reduced so as to give full and complete effect to such exemption. To put it simply, if the Schedule to the Act prescribes a duty of 100% ad valorem, and an exemption notification under Rule 8 of the Central Excise Rules exempts the goods from duty in excess of 75% ad valorem, then, the amount of duty computed with reference to the rate of 75% and not 100% is the amount to be excluded in arriving at the assessable value of the goods. The reason for this stipulation is not far to seek. If the duty payable on the goods is only that calculated at the rate of 75% ad valorem, then any amount included in the selling price purported to be duty calculated at the rate of 100% ad valorem, would not represent the correct amount of duty payable on the goods. The difference between the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, we have to consider the present matter in the light of Section 4 as it stands today and as it is deemed to have stood from 1-10-1975 by virtue of the retrospective amendment and in the light of the latest decision of the Supreme Court. Viewed in this light, we have, no doubt, that the method adopted by the Revenue for arriving at the assessable value and the liability to duty and the consequent denial of a portion of the amount claimed as refund were correct and in accordance with the law. The argument that the appellants' prices were ex-duty prices, is of no avail because according to Section 4(1) of the Act, the basis for arriving at the assessable value is the normal price, that is, the price at which the goods are ordinarily sold by the assessee 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. Evidently, the normal price contemplated is the price at which the goods change hands and not some of the components thereof. The selling price in the present case is admittedly comprised of ex-duty price, an amount towards duty worked out at 100% ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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