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TMI Blog1984 (8) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ls. The first question is whether on a true consideration of the Notification No. 25/70, dated 1-3-1970 issued by the Government of India, the appellant is entitled to claim exemption from the imposition of excise duty on fertilisers which, according to the appellant, are mixed fertilizers manufactured by the appellant. The other question is whether the amount of commission paid by the appellant to its selling agents should be deducted as trade allowance in computing the value of the goods for assessment of excise duty. 3. It may be noted that some of these appeals are concerned with the first question, namely the exemption under the Notification No. 25/70, dated 1-3-1970 and in the remaining appeals the question of exclusion of the commission paid to the selling agent is involved. Same questions are involved in the special leave petitions. 4. The broad facts about which there does not appear to be any serious dispute may be briefly noticed. The appellant carries on business as manufacturers of diverse kinds of fertilizers at the factory situated at Vishakhapatnam. The appellant considered that it would be advisable to entrust the sale of its products to organisations with experi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also claimed deduction of the selling agency commission paid by the appellant to its selling agents for sale of the fertilizers manufactured by the appellant as trade discount in the matter of computation of excise duty payable on the fertilisers manufactured by the appellant. The claims on both these accounts were disallowed by the Assistant Collector whose decisions were upheld by the Appellate Collector. Aggrieved by the decisions of the authorities concerned, the appellant filed writ petitions in the High Court. As we have earlier observed, the High Court by its common judgment refused to entertain the claims of the appellant under these two heads and dismissed all the writ petitions filed by the appellant in the High Court. Against the decision and judgment of the High Court disallowing these claims, these appeals with special leave granted by this Court have been filed by the appellant. 7. The case of the appellant in support of its claim for exemption under the Notification may be indicated. The claim is made in respect of the Fertiliser known as 'Gromor N.P.K. 14 : 35 : 14 which, according to the appellant, is a mixed fertiliser qualifying for relief under the Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is his comment that the exemption granted under the Notification cannot in any way le curtailed or taken away or otherwise affected by the issue of a Trade Notice purporting to qualify the meaning and scope of the Notification and the right of any party entitled to the benefit under the Notification cannot be taken away by any purported clarification of the Notification without amending the Notification itself. 8. It may be noted that before the High Court the very same contention was raised and the very same arguments were advanced. The High Court has elaborately and very carefully considered the case made for exemption under the Notification and the arguments advanced in support thereof. On a careful and proper consideration of the contention raised and the arguments advanced, the High Court, in our view, rightly disallowed the claim for exemption and rejected the arguments advanced. While declining to entertain the claim in this respect the High Court held : "What is exempted is 'Mixed fertilisers' falling under Item No. 14HH of the First Schedule to the Act. Item 14HH refers to 'fertilisers, all sorts, but excluding natural, animal or vegetable fertilisers when not chemicall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are also used in manufacturing the mixed fertilisers, then the said mixed fertiliser walks out of the exemption." The High Court has further observed : "We have already noted the averments in paragraph 8 of the writ petition describing the process of manufacture of NPK 14:35:14 and the fertilisers and commodities used therein. The petitioner company itself stated that NPK 14 : 35 : 14 is manufactured by mixing with the aid of power from two imported fertilisers viz. Rock Phosphate and Muriate of Potash. The manufacturing process, according to the averments in the writ petitions consists of treating Rock Phosphate with Sulphuric Acid, which treatment produces Phosphoric Acid. The Phosphoric Acid that is thus produced is further treated with Ammonia as a consequence of which Mono and Di-Ammonium Phosphate in Slurry form comes into existence. Let us not think at the present of the Phosphoric Acid and Mono and Di-Ammonium Phosphate which come into existence in the process of manufacture. Let us concentrate on the basic commodities used in the manufacture of this fertiliser. From the averments in paragraph 8 of the writ petition it is obvious that not only the two fertilisers i.e., R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forms a part of the Notification itself. The Notification has to be construed as a whole and in properly interpreting the Notification; the Explanation which has been added to the Notification cannot be ignored. The question as to whether the Explanation seeks to control the operation or the effect of the Notification is indeed immaterial, as the Explanation purports neither to control nor to alter but only seeks to explain. What the Explanation provides is not in any way in conflict with or contrary to what the Notification provides. 11. Mr. Setalvad made a grievance that the authorities concerned had allowed the benefit of the Notification under similar circumstances to a rival company. If the grievance of the appellant is true, the appellant may no doubt have reasons to feel sore about it. We have, however, to point out that the grievance of the appellant, even if it is well-founded, does not entitle the appellant to claim the benefit of the Notification. A wrong decision in favour of any particular party does not entitle any other party to claim the benefit on the basis of the wrong decision. We are, therefore, clearly of the opinion that the fertiliser manufactured by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Law Reports Chencery Division 1] relied on by Mr. Setalvad are not any assistance in deciding the question in the present case. 15. In the case of M.C.V.S. Arunachala Nadar etc. v. The State of Madras & Ors. (Supra) this Court was concerned -with the question of the constitutional validity of the Madras Commercial Crops Markets Act (Madras XX of 1933), the rules framed thereunder and also certain notifications issued in pursuance thereof. Bye-law 25 dealt with "Trade allowance applying to the market and notified area". While considering the nature of trade allowance his Court observed at page 109. "What is a trade allowance ? Trade involves exchange of commodities for money, the business of buying and selling and the transaction involves the seller, the buyer, the commodity sold and the price paid for the sale. Allowance means something given as compensation, rebate or deduction. Under the section, the said deduction should be in any transaction in respect of commercial crops. The deduction may be out of the commodity or out of the price. The recipient may be the seller, the buyer or a third party. When A sells a quantity of cotton to B for a hundred rupees. B, the purchaser, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deduction in the computation of the assessable value of the goods for the purpose of levy of excise duty. The commission paid to the selling agents is not a trade discount given either to the wholesale buyer or to the retail buyer, it is not given to the consumer or the trader. The commission paid on the basis of the agreement to the selling agent by way of remuneration for services rendered by the agent cannot by any process of reasoning be said to be trade discount payable or paid at the time of removal of the goods from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production. The amount of commission paid to the selling agents, therefore, is not trade discount within the meaning of the Explanation to section 4 of the Act and does not qualify for any deduction. In our view, the High Court was clearly justified in rejecting this claim of the appellant.
19. Both the claims made by the appellant, therefore, fail and have been rightly rejected by the High Court. We, accordingly, dismiss the appeals as also the Special Leave Petitions. We, however, propose to make no order as to costs.
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