TMI Blog1800 (1) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are manufacturers ofvegetableproducts and under Item no. 13 of the First Schedule to the Actof 1944 the excise duty leviable before the 1st of march, 1969 was byweight i.e. per quintal of the excisable goods. 6. By the Finance Act of 1969, which came into forces on the 1st ofMarch, 1969, Item No. 13 of the said First Schedule was amended so thatfrom that date the excise duty leviable was made ad valorem. Therfore,the duty of excise which was earlier chargeable on the actual weight ofthe vegetable products i.e. the excisable goods, was altered to advalorem duty on the value of the vegetable products. 7. Under Rule 173-C the respondents were required to file a price listof goods assessable ad valorem for the purpose of determinastion of valuein accordance with Section 4 of the Act of 1944. It would appear that therespondents' price list were not acceopted by the Central ExciseAuthorities and that the respondents were ordered to pay excise duty onhigher prie.] 8. After some correspondence with the Central Excise Authorities therespondents disputed the power of the Central Excise Authorities to levyexcise duty on the basis of a wholesale price, which included the priceo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable goods under Item 13 as well as therailway freight. In other words, the respondents is that the appellantshave illegally and improperly disallowed the deduction of the cost of thetin-containerrs and the railway fright. It is not disputed that thevalue of the tin-containers if ₹ 3.78 and the railway fright is Re.0.99 P. per tin of 16.5 Kgs. 13. On the question of quantum, therefore, there is no dispute. It mayalso be mentioned that there was at one time a difference of opinionbetween the parties as to which maximum price was applicable because theGovernment of India in the relevant Notification prescribed differentmaximum price as between the producer and wholesaler, and the wholsealerand the dealer. Foetunately, tjis disputw has been resolved and need nottherefored be discussed by us. 14. The claim of the respondents as the plaintiffs in the suit, is,therefore, for recovery of the amount levied illegally on the value ofthe tin-containersand on account of the fright on the products. 15. The appellants have taken up two defences. According to theappelants,the article manufactured by the respondents viz., thevagetable oil,is such that it cannot be present for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of assesmentunder section 4 of the act of 1944 would, therfore, be ₹ 65.58 less₹ 4.77. The Central Excise authorities contend that the value for thepurpose of ad valorem duty must include the value of the container aswell as the cost of freight. 20. Some of the relevent provisions of the Act of 1944 and the rulesmade thereunder may now be notice. 21. Section 2(4) of the Act of 1944 defines excisavle goods to mean goods specified in the First Schedule as being subject to a duty ofexcise and include salt . 22. Section 2(f) defins manufacture as including any processincidental or ancillary to the completion of a manufactured product. 23. Item No. 13 of the First Sechdule with which we are concerned refersto vegetable product in the following words :- Vegetable product' means any vegetable oil or fat which, whether byitself or in admixture with any other substance, has by hydrogenation orby any other process been hardened for human consumption. It is obvious that Item No. 13 read with Section 2(d) of the Act of 1944would clearly show that the excisable goods which are the subject- matterof this appeal consist of hydrogenated vege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in clause (a) of Section 4 of the Act of 1944 and held that the phrase wholesale cash price asused in the sectionwas in contradistinction with retail price and thatthat price is relieved of the loading represented by post-manufactureexpenses unless they form part of the profits of the manufacturerhimself. 30. The matter went in appeal to the Supreme Court and the SuperemeCourt affirmed the judgment of this Court and held that Section 4 of theAct of 1944 provides that the value should be found after deducting theselling cost and the selling profit and that the real value can includeonly the maunfacturing cost and the manufacturing profit. 31. This is what the Supreme Court observed in A.K.Roy v. VoltasLimited, Excise is a tax on the production and manufacture of goods (see Union ofIndia v. Delhi Cloth and General Mills, . Section 4 of theAct therfore provides that the real value should be found after deductingthe selling cost and selling profits and that the real value can includeonly the manufacturing cost and the manufacturing profit. The sectionmakes it clear that excise is levied only on the amount representing themanufacturing cost plus the manufacturing profits an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of package tea there is adifferent rate. 36. Now, Item No. 13, which deals with vegetable products, does notmention any packaging at all and it follows that the only articles onwhich duty can be levied is the vegetable products or the hydrogenatedvegetable oil which constitutes excisable goods and not the container. 37. Mr.Nain has also referred to Section 2(f) of the Act of 1944 whichdefine manufacture and has shown to us that where it was intended thatpackaging should be included as a process of manufacturing, theLegislature has said so. In sub- clause (iii) to Section 2(f) there is aprovision that in relation to patent or proprietary medicines as definedin Item No. 14-E as also in relation to cosmetics and toilet preparationsas defind it Item No. 14-F of the First Schedule to the Act of 1944manufacture would include labelling or relabelling of containers intendedfor consumers and re-packaging from bulk packs to retail packs, or theadoption of any other treatment to render the product marketable to theconsumers. This shows that in the case of medicines, the packagingthereof is by statute considered to be a part of the manufacturingprocess. It is a matter of comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides that any person deeminghimself aggrieved by any person deeming himself aggrieved by any decisionor order passed by a Central Excise Officer under Act may file an appealas therin provided and that every such order passed in appeal underSection 35 shall, subject to the power of revision conferred by Section36, be final. 46. Section 36, of course, provides for a revision by the CentralGovernment. These two sections obviusly come into play when an order hasbeen passed under the Act and any person is aggrieved by any suchdecision or order. 47. Section 40 of the Act of 1944 as it stood before 1973 provided for bar of suits and limitaiton of suits and other legal proceedings andits specific phraseology may be noted. It reads as follows :- (1) No suit shall lie against the Central Government or agaist anyofficer of the Government in respect of any order passed in good faith orany act in good faith done or ordered to be done under this Act. (2) No suit, prosecution, or other legal proceedings shall be institutedfor anything done or ordered to be done under this Act after theexpiration of Six months from the accural of the cause of action ot fromthe date of the act or orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eprescribed by the said statute or not. (5) Where the particuler Act contains no machinery for refund of taxcollected in excess of constitutional limits or illegally collected asuit (7) An exclusion of the jurisdiction of the Civil Court is not readilyto be inferred unless the conditions above set down apply. 51. Now, in the case before us we have held that imposition of centralexcise duty on the tin-container and on fright was not warranted by anyof the provisions of the Act of 1944. Thus any levy of central exciseduty on the value of the tin-container and the cost of freight was whollyoutside the law and it could Central Excise and Salt Act of 1944 onlyprovides for the duty of excise on excisable goods so that when anattempt is made to levy duty of excise on goods which are not excisablethen such a levy falls outside the law and, therfore, would be illegal. 52. Even if Section 40 of the Act of 1944 wewre to be construed as thelearned Assistant Government Pleader would have us do, that is to say,that it bars the jurisdiction of civil courts, the legal position asenundiated by the Supreme Court clearly shows that the juridiction of theCivil Courts would not be there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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