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COMMISSIONER OF CENTRAL EXCISE, LUCKNOW Versus M/s. BAJAJ HINDUSTAN LTD.

2015 (11) TMI 961 - SUPREME COURT OF INDIA

Valuation of goods - part of sugar was to be sold at controlled rates to be fixed by the Government - Section 4 of the Central Excises and Salt Act, 1944 - Held that:- As per clause (a) of sub-Section (1) of Section 4, the duty which is payable is on a normal price of the goods i.e. price at which the goods are ordinarily sold by the assessee to a buyer. As pointed out above, the High Court had passed interim orders permitting the assessee to charge higher price and thereafter at that price the .....

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R. ROHINTON FALI NARIMAN, JJ. For The Appellant : Mr. K. Radhakrishnan, Sr. Adv., Ms. Sunita Rani Singh, Adv., Ms. Shirin Khajuria, Adv., Mr. H.K. Naik, Adv., Mr. B. Krishna Prasad,Adv. For The Respondent : Mr. Alok Yadav, Adv., Ms. Ruby Singh Ahuja, Adv., Mr. Utsav Trivedi, Adv., Mr. Chahat Chawla, Adv., Mr. Sanjeev Singh, Adv., Mrs Manik Karanjawala,Adv., Mr. Kanandev Chopra, Adv. ORDER The respondent herein is the manufacturer of sugar under the Essential Commodities Act. Part of sugar, at th .....

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etition filed by the respondent and other similarly situated manufacturers of sugar, allowing these manufacturers to charge higher price than the price that was fixed by the Government. On the basis of the aforesaid orders passed by the High Court on the sugar which was cleared by the respondent for sale during the period March, 1978 to November, 1980, higher price as per the orders passed by the High Court was charged. However, the respondent cleared the goods by paying the excise duty only on .....

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een charged. However, he further found that some of the period for which the assessee was directed to pay the duty was not covered by the show cause notice and on that ground alone matter was remitted back to the Assistant Commissioner for recalculation of the duty only for the period covered by the show cause notice i.e. March, 1978 to November, 1980. On remand the Assistant Commissioner went into the aforesaid calculations for the aforesaid period and found that the amount realisable on differ .....

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demand of ₹ 30,58,904.79. This order was upheld by the Commissioner (Appeals). The assessee carried the matter further before the Tribunal and the Tribunal has allowed the appeal of the assessee vide impugned order dated 21.07.2006 and set aside the differential duty claimed by the Revenue. While allowing this appeal of the respondent, the Tribunal has referred to the judgment of this Court to the final order dated 21.05.2004 passed by the Tribunal in its earlier Appeal No. E/1631-33/04 a .....

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the learned counsel for the parties on this aspect and find adequate force in the submission made by Mr. Radhakrishnan. Section 4 of the Central Excises and Salt Act, 1944, which was invoked at the relevant time and deals with the valuation of excisable goods for purposes of charging of duty of excise, reads as under: 4. Valuation of excisable goods for purposes of charging of duty of excise. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to val .....

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re 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 other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers; (ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being th .....

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be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail; (b) where the normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as .....

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b- section (2) of section 3. (4) For the purposes of this section,- a) "assessee" means the person who is liable to pay the duty of excise under this Act and includes his agent; (b) "place of removal" means- (i) a factory or any other place or premises of production or manufacture of the excisable goods; or (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed; .....

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e", in relation to any excisable goods,- (i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing 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 warp beam or any other thing in which or on which the excisable goods are wrapped, contained or wound; (ii) does not in .....

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which purchase their requirements otherwise than in retail. As per clause (a) of sub-Section (1) of Section 4, the duty which is payable is on a normal price of the goods i.e. price at which the goods are ordinarily sold by the assessee to a buyer. As pointed out above, the High Court had passed interim orders permitting the assessee to charge higher price and thereafter at that price the goods were normally sold by the assesse to the FCI as well as other buyers. Learned counsel for the assessee .....

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ction of Clause 5-A of the Sugar-cane (Control) Order and the Bhargava Commission Report of 1974. The contention of the sugar manufacturing units against the then notified price was that since the price had to be fixed under Section 3(3-C) of the Sugar-cane (Control) Order, 1976, taking into account the four factors mentioned therein, such notified price could not take into account excess sale realisation of free sale sugar, and this being the case, the notified price being an artificially depre .....

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