TMI Blog1987 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol. On September 4, 1969 the Company issued a price bulletin raising the price of cars to Rs. 14,862/- with effect from September, 8, 1969. On September 21, 1969. The Government of India, Ministry of Industrial Development, Internal Trade and Company Affairs published Price Control Order in exercise of powers conferred by Section 18-G of the Industrial (Development and Regulation) Act, 1951. The Order was called the Motor Cars (Distribution and Sales) Control (Amendment) Order, 1969. The Order, inter alia, prescribes that no manufacturer or dealer shall after the commencement of the order, sell or offer to sell or otherwise transfer or dispose of motor cars for a price exceeding the price specified in Schedule I to the Order. In respect of Fiat cars manufactured by the appellants, the Schedule prescribes that the price to be charged was Rs. 14,325/- per car. The Explanation to the Schedule sets out that the price specified in ex-factory price inclusive of dealer's commission and does not include excise duty, Central Sales tax and local taxes, if any, and transportation charges. The result of insurance of the Price Order was that the retail price of the Fiat car was fixed at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1972 S.C. 1690. (Premier Automobiles Ltd. Ors. v. Union of India). The operative part of the judgment in paragraph 59 reads as under : "It is common ground and counsel for all the parties are agreed that as a result of our decision the impugned order of September 1969 shall be inoperative and ineffective to the extent the prices fixed by it are not in accordance with our decision." The result of the decision of the Supreme Court was that the appellant Company was entitled to recover additional sale price for the period commencing from September 22, 1969 till April 30, 1971 and the Company was entitled to recover Rs. 334/- per car sold between September 22, 1969 and June 30, 1970 and Rs. 1353/- per car sold between July 1, 1970 and April 15, 1971. 5. Between March 23, 1972 and July 25, 1972 several show cause notices were served by Superintendent of Central Excise upon the appellants demanding payment of aggregate differential excise duty of Rs. 4,10,.5.52.80 for the period between September 22, 1969 to June 30, 1970 and Rs. 17,62,327.60 for the period commencing from July 1, 1970 to April 15, 1971. These show cause notices were in respect of the additional price which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order. The department placed strong reliance upon the endorsement inserted by the appellants in the invoice while effecting the sales of Fiat cars. The Department did not dispute that the assessment orders were final and not provisional as contemplated under Rule 9-B. The Department claimed that merely because final assessments were made by the Department would not prevent the Department from claiming higher duty in view of the price fixed by the Supreme Court. The Department also claimed that the recovery can be effected under Rule 10-A which does not prescribe for any limitation as contemplated under Rule 10. The learned single Judge accepted the contentions urged on behalf of the Department and dismissed the petition by the judgment which is under challenge. 6. Shri Taraporewala, learned counsel appearing on behalf of the appellants, has reiterated the submissions urged before the learned single Judge, and the two principal contentions advanced by the learned counsel are (i) that the assessable value of cars has to be determined on the basis of the price actually prevalent at the time of sale and there is no scope for applying any technical or hyper-technical theory of deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was further clarified that in case the Company succeeds in the writ petition and the Price Control Order is held to be invalid, then the price would be adjusted in conformity with the price bulletin and the price would be Rs. 14,862/- ex-factory and exclusive of excise duty, sales-tax and all incidentals. In other words, the wholesale cash price for sale of the Fiat car was Rs. 13,434/- plus liability to pay additional price in case of success of the Company in the Supreme Court. In this connection, the explanation "the wholesale cash price for which an article is sold or is capable of being sold" in Section 4(a) of the Excise Act cannot be over-looked. It was claimed by the Company that the Fiat car is capable of being sold for Rs. 14,862/- and that was the price which was agreed to be paid by the customer, provided the Supreme Court strikes down the Price Control Order. It is undoubtedly true that the amount charged by the Company at the time of sale of the car was Rs. 13,434/- but the Company reserved the right to recover additional amount and the customer agreed to accept the liability to pay that amount, in case the Supreme Court decided in favour of the Company. It is, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt portion reads as under : "1. The Assessee has paid the duty on the above goods correctly except to the extent indicated below : The duty short-levied as indicated above should be paid by the Assessee within ten days by debit in his account-current (P.L.A.). The Assessee is advised to lodge an application for refund of the duty paid in excess as indicated above. 2. Duty on the goods cleared under Gate Pass No.(s) and included in this return has been assessed provisionally under Rule 9-B and provisions of the said rule shall apply for recovery of deficiency in or refund of excess duty." Shri Taraporewala points out that both clauses 1 and 2 were cancelled by the Superintendent of Central Excise, and therefore, it was clear that the officer was satisfied that the duty was paid correctly and the assessment order was not a provisional assessment as contemplated under Rule 9-B of the Excise Rules. Rule 9-B (1) reads as follows : "9B. Provisional assessment to duty :- (1) Notwithstanding anything contained in these rules, - (a) where the proper officer is satisfied that an assessee is unable to produce any document or furnish any information necessary for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department from collection of duty which is lawful. While appreciating the submission urged on behalf of the Department, it is necessary to bear in mind that the Company, while effecting the sale, has made it clear that the price charged at the time of removal of the car from the factory was one fixed by the Price Control Order and which was under challenge in a writ petition filed before the Supreme Court. The Company made it clear that in case of success in the petition the Company would recover the price set out in the price bulletin and the purchaser had agreed to pay that additional amount. It is, therefore, obvious that additional the assessment orders passed by the Superintendent of Central Excise were final in nature, it was open for the Department to demand additional duty when the wholesale cash price was something in addition to Rs. 13,434/-. It is not in dispute that the Company was entitled to recover the additional amount over that of Rs. 13,434/- per car and that right which the Company was claiming was under cloud while the Price Control Order was in operation and as soon as that cloud was lifted, the wholesale cash price, for which the car was sold, must be consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The submission was controverted on behalf of the Department by urging that the power was exercised by the Superintendent under Rule 10-A of the Central Excise Rules and not under Rule 10. Rule 10-A deals with residuary powers for recovery of sums due to the Government and reads as under : "10-A. Where these rules do not make any specific provision for collection of any duty, or of any deficiency in duty, if the duty has for any reason been short levied or of any other sum or any amount payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall on a written demand made by the proper officer be paid to such person and at such time and place as the proper officer may specify." The principal difference between Rule 10 and Rule 10-A is that while Rule 10 prescribes for recovery of duty short levied due to inadvertance, error, collusion or misconstruction on the part of the officer; Rule 10-A applies in all other cases of short levied duty. Rule 10 prescribes for limitation, while powers under Rule 10-A can be exercised without any restriction. Shri Taraporewala urged that as the assessment orders were final and not provisional, the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Supreme Court the Company would be entitled to recover and the purchaser would be liable to pay the amount as set out in the price bulletin issued by the appellants. The purchaser was therefore required to pay total price at Rs. 14,862/- and that became the wholesale cash price at which the car was sold. The subsequent development resulted into alteration of the wholesale cash price from Rs. 13,434/- to Rs. 14,862/- and this alteration necessitated recovery of additional duty from the appellants under Section 4 of the Central Excise Act. In our judgment, in these circumstances, the submission of Shri Taraporewala that Rule 10 would attract to the facts of the case and the demand made by the Superintendent of Central Excise was barred by limitation and therefore the order confirming the demand stands vitiated, cannot be accepted. In our judgment, the learned single Judge was right in his conclusion that the facts of the case attract provisions of Rule 10-A. Rule 10-A is a residuary provision and apply in all cases where Rule 10 does not apply. It was not disputed by Shri Taraporewala that the right to recover duty short levied arise either under Rule 10 or Rule 10-A and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, or through misstatement as to the quantity, description or value of the excisable goods on the part of the owner; Rule 10-A which is a residuary clause applies to those cases which are not covered by Rule 10. The Supreme Court referred to the earlier decision reported in 1978 E.L.T. (J399) = A.I.R. 1971 S.C. 2039 (N.B. Sanjana v. Elphinstone Spinning Weaving Mills Co. Ltd.) and A.I.R. 1972 S.C. 2563 with approval. The Supreme Court further observed that in cases where Rule 10 is not attracted, Rule 10-A, which is a residuary provision, must necessarily attract and in case of application of Rule 10-A the question of limitation does not arise. The principle laid down in these two cases was reiterated in another decision of the Supreme Court reported in 1986 (25) E.L.T. 3 (Andhra Rerolling Works, Hyderabad v. Union of India Others). In view of the law laid down by the Supreme Court, it is clear that Rule 10 has no application to the facts and circumstances of the present case and the Department was perfectly justified in exercising powers under Rule 10-A of the Central Excise Rules. 10. Shri Taraporewala finally urged that even if Rule 10 applies to the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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