TMI Blog1986 (7) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... rs submitted price list to the Assistant Collector in which the assessable value stated was one determined after excluding the post manufacturing expenses. The petitioners also filed revised price list but the Assistant Collector rejected the price list holding that the petitioners cannot deduct the post manufacturing expenses for ascertaining the assessable value. The petitioners thereafter filed fresh price lists from time to time, but on the insistence of the Department that the assessable value should include ths post manufacturing sxpenses proceeded to clear the goods on payment of duty under protest. The petitioners thereafter institued the present petition under Article 226 of the Constitution of India on July 28, 1982. 2. During the pendency of this petition, the Supreme Court delivered judgment dealing with deduction of post manufacturing expenses in ascertaining the assessable value under Section 47 of the Central Excises and Salt Act (hereinafter referred to as the "Act") and that judgment is in the case of Union of India v. Bombay Tyres International Limited reported in 1983 Excise Law times, 1896. In view of this judgment when the petition came up before me for heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Excisable articles in the condition in which it is generally sold in the wholesale market at the factory gate must be included in the value of the article for the purpose of excise duty. The Assistant Collector observed that secondary packing is very essential for the petitioners to forward the products to the branches and as such costs are incurred in the normal course of business and, therefore, the deduction for the expenses incurred in respect of secondary packing cannot be granted. Shri Shroff submits that the finding recorded by the Assistant Collector on this count is totally contrary to the decision of the Supreme Court in the case of Union of India and others v. Godfrey Philips India Limited and others reported in 1985 (22) Excise Law Times 306. The submission of the learned Counsel is correct and deserves acceptance. The Supreme Court in the case of Godfrey Philips India Limited, after referring to its earlier decision in Bombay Tyres International Limited, held that on a proper construction of Section 4(4)(d)(i) read with the Explanation, the cost of secondary packing done for the purpose of facilitating transport and smooth transit of goods to be delivered to the buye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Collector is clearly erroneous and cannot be sustained. The Supreme Court by its order in the case of Union of India and others v. Bombay Tyres International Pvt. Ltd. reported in 1984 Excise Law Times 329, while dealing with the question as to deduction of trade discount while ascertaining the assessable value observed: "Discounts allowed in the Trade (by whatever name such discount is described) should be allowed to the deducted from the sale price having regard to tha nature of the goods, if established under agreements or under terms of sale or by established practice." Shri Shroff submits that the petitioners have demonstrated before the Assistant Collector that it is an established practice to grant regional discount in respect of sales in certain areas of the country because of the high amount of local taxes. The Assistant Collector did not discard the claim of the petitioner that it was the consistent practice to grant regional discount, but proceeded to reject the claim on the ground that the goods are not earmarked for these places while leaving the factory gate. It is difficult to appreciate any merit in the reasons given by the Assistant Collector. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash discount was claimed by the petitioners at flat rate of 2% in respect of all sales except records sold at contract prices and records sold to class of buyers having own Depots. The Assistant Collector came to the conclusion that for availing the benefit of cash discount, the petitioners must establish that such cash discount was actually passed on to the buyers. The Assistant Collector found that unless the cash discount is actually passed on to the buyer, it is not permissible for the petitioners to claim that the value of the cash discount should be excluded while determining the assessable value. Shri Shroff submsitted that the petitioners are entitled to claim that cash discount in the price list must be allowed irrespective of whether it was actually availed of by the customer and in support of this submission, reliance is placed on the decision of ths Division Bench in the case of Jenson and Nicholson (India) Limited and another v. Union of India and others reported in 1984 (17) Excise Law Times 4. The decision undoubtedly supports the submission urged on behalf of the petitioners. The Division Bench held in paragraph 14 of the judgment: "We are, therefore, of the op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will have to be refunded for the entire period for which it is recovered. The petitioners claimed that they became aware of the mistake of law in November 1979 and the Petition is filed on July 29, 1982 i.e. within a period of three years from the date of knowledge of mistake of law. In my judgment, the petitioners are entitled to refund of excess duty paid from the year 1977 onwards. It is not in dispute that from the year 1980 onwards, the petitioners paid duty under protest. Shri Lokur urged with reference to the decision reported in 1984(16) Excise Law Times 91 that it is not open for the petitioners to claim that mistake of law came to their knowledge only in November 1979. The learned Counsel urged that the petitioners cannot claim that the mistake was known to them only in November 1979 when the Supreme Court had decided Voltas' case in the year 1973 holding that post manufacturing expenses cannot be included while ascertaining the assessable value of the goods for the purpose of excise duty. It is undoubtedly true that Voltas case was decided in the year 1975 but inspite of the judgment, the Department persisted in including the post manufacturing expenses while determinin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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