TMI Blog1985 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... uch of the duty of excise leviable thereon as in excess of thirty per cent ad valorem vide Annexure-1, the Notification No. 28/79-C.E., dated 1-3-1979. The relevant portion of the notification reads as follows :- "In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 and in suppression of the Notification of the Government of India in the Department of Revenue and Banking No. 211/77-Central Excises, dated the 4th July, 1977, the Central Government hereby exempts aerated waters falling under sub-item (2) of Item No. ID of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon as In excess of thirty per cent ad valorem. Provided that the exemption contained in this notification shall not apply to aerated waters containing caffeine." The petitioner Company being not fully aware of the exact position of the exemption notification (Annexure-1) requested opposite party No. 2, the Superintendent, Central Excise, Uditnagar, Rourkela to advise the Company regarding the procedure to be followed for submission of the fresh classification list effective from 1-3-1979 which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount covered by such relief under the exemption notification would go to the benefit of the manufacturers. The manufacturer is only entitled to collect from the buyers the amount of duty which they actually pay at a particular time." Petitioner now challenges the above finding of opposite party No. 1 that "the amount covered by such relief under the exemption notification would go to the benefit of the manufacturers". Mr. Mohanty, learned Counsel for the petitioner, contends that the benefit of exemption under Annexure-1 is available only to the manufacturer. He further contends that the exemption notification does not itself say that the exemption will not be available to the manufacturers and shall be passed on to the buyers/consumers. In the absence of such provision in the notification the view taken by opposite party No. 1 under A.nnexure-10 is absolutely illegal, untenable and should not be allowed to stand. 2. On the other hand the contention of the opposite parties is that the petitioner Company as a manufacturer cannot retain the benefit given under the exemption notification in Annexure-1. Learned Counsel for the opposite parties laid stress upon the definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for determining the value of the excisable article. The basic scheme for determination of the price in the new Section 4 is characterised by the same dichotomy as that observable in the old Section 4. It was not the intention of Parliament, when enacting the new Section 4 to create a scheme materially different from that embodied in the superseded Section 4. The object and purpose remained the same, and so did the central principle at the heart of the scheme. The new scheme was merely more comprehensive and the language employed more precise and definite. As in the old Section 4, the terms in which the value was defined remained the price charged by the assessee in the course of wholesale trade for delivery at the time and place of removal." In another decision of the Andhra Pradesh High Court reported in 1979 E.L.T. (J334) [Indo-National Ltd. Nellore and others v. Union of India and others] it has been held :- "It, therefore, follows that under the new Section 4 of the Act, it is not permissible to include in the assessable value any element of postmanufacturing costs or profits attributable to post-manufacturing operations." The above decisions thus reaffirm the basic nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stages at which the matter was heared by them. I am unable to agree that these factors were not in dispute because the impugned order, passed by the Government of India in revision in terms says : "It is not as if some duty is levied and part of it gives away as a subsidy for the use of cotton seed oil". This observation shows that the Government did not intend to give 6 paise as a subsidy to a manufacturer merely because he was allowed to make use of indigenous cotton seed oil. Even at the stage of show cause notice, it was indicated that the method adopted by the petitioners would give them unintended benefits. Thus, the theory of giving the manufacturers a benefit of 6 paise, as suggested by Shri Joshi, is unwarranted and untenable. On the contrary, this theory introduced at the hearing before me by means of the affidavit in rejoinder and the arguments developed on those basis confuses the issue. The rebate in duty was not a general rebate but on the manufacturer satisfying certain conditions. It is one thing to say that the Government wanted to encourage the use of indigenous cotton seed oil in the manufacture of vegetable oil product, but, it is entirely a different thing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh High Court reported in 1980 E.L.T. 210 was only distinguished and not differed from. So this case though apparently supports to some extent the contention of the learned Counsel, it does not really help him. 4. In the notification in Annexure-1 nothing has been mentioned that the benefit given thereunder is only available to those manufacturers who pass on the benefit of exemption to the buyers/consumers. In the decision of Delhi High Court in the case of Modi Rubber Ltd., Modinagar v. Union of India and others [1978 E.L.T. (J127)] it has been held :- "If the exemption notification does not contain a condition that its benefit should be passed on to the consumer, the manufacturer can retain the benefit of exemption notification." In the decision of our High Court reported in 1982 E.L.T. 109 (Ori), [M/s. Bizi Industries v. Superintendent Central Excise, Cuttack and others] it has been held :- "If the exemption notification does not contain a contention that its benefit should be passed on to the customer, the assessable value cannot be determined to include in it the benefit of exemption notification on the ground that the same has not been passed on to the customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain benefit upon the manufacturer or the buyer/consumer as the /case may be, as an incentive, with a view to encourage production or consumption. But, it cannot be said that this would virtually amount to adding a part of the excise duty to the manufacturing cost and profits while arriving at the assessable value under Section 4 of the Central Excise Act." 5. The definition of the expression "value" as contained in Section 4(4)(d) of the Act is in relation to any excisable goods 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. Clause (ii) thereof provides that from out of the value of the article, the amount of the duty of excise, sales-tax and other taxes, and the trade discount allowed in accordance with the normal price of the wholesale trade at the time of removal of the goods sold shall be deducted. The duty is leviable only on the manufacturing cost and manufacturing profit alone and the other expenses or costs, including post-manufacturing expenses, cannot be added/ loaded to the manufacturing cost and p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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