TMI Blog1989 (7) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... geable in respect of motor vehicles is ad valorem i.e. with reference to value. The petitioners have been following the self-removable procedure in respect of motor vehicles manufactured by them at their said factories at Pune and Jamshedpur. The petitioners filed from time to time with the proper officer, the price list of commercial motor vehicles in accordance with Rule 173B of the said Rules, duty in respect whereof is chargeable according to value. 4. In exercise of powers conferred by sub-rule (1) of Rule 8 of the said Rules, the Central Government issued a Notification No. 198/76-CE, dated 16th June, 1976 exempting the excisable goods of the description specified in Column 3 of the table thereto annexed and referred to as 'Specified Goods' and cleared from one or more factories in excess of the Base Clearance by or on behalf of the manufacturer from so much of the duty of excise leviable thereon under the relevant item as is in excess of 75% of such duty subject to the conditions therein specified. This Scheme is known as 'Higher Production Incentive Scheme'. It came into force on 1st July, 1976 and remained in force up to and inclusive of the 31st March, 1979. 5. Amongs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice x reduced rate (100 + reduced rate of duty). The aforesaid considerations are applicable only in the case of goods subject to ad valorem rates of duty in respect of which no tariff value has been fixed". The petitioners accordingly started clearing the motor vehicles on the basis of the increased assessable value as per the said Press Note, under protest. 7. The assessable value of the motor vehicles cleared by the petitioners was loaded by 2.99% for the period from 25th February, 1979 to 28th February, 1979 and by 3.37% for the period from 1st March, 1979 to 31st March, 1979. The petitioners say that as earlier stated, they have paid duty of excise on the commercial motor vehicles cleared by them from their said Pune factory during the period 25th February, 1979 to 28th February, 1979 and 1st March, 1979 to 31st March, 1979 on the basis of the assessable value adjusted by loading 2.99% for the period 25th February, 1979 to 28th February, 1979 and 3.37% for the period from 1st March, 1979 to 31st March, 1979 and the petitioners have made excess payment of duty of Rs. 5,00,716.26. 8. The petitioners submit that although they had submitted the price lists Nos. MV-29, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his petition not only to quash the impugned orders, but also the Trade Notice dated 8th March, 1977 by seeking a mandamus to respondents for the refund of the difference of duty collected from them on the basis of the said Trade Notice. 12. Mr. Taleyarkhan, the learned Counsel appearing for the petitioners raised a two-fold contention in showing that the view of the Department is not justified. In the first place, it is contended that the exemption amount cannot be included in a normal price of the petitioners' goods, firstly because this amount is not a consideration for sale of goods and secondly because the petitioners' price has always been exclusive of excise duty. According to him there cannot be two different normal prices depending upon the clearances of number of vehicles. If Section 4 of the Act and the Notification are interpreted as contended by the Department, different assessable value will emerge at different stages, and to illustrate that, Mr. Taleyarkhan, the learned Counsel pointed out that the calculation will be as follows :- Before availing of Notification No. 198/76 According to Petitioners According to Respondents -Sellin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Fertilizers Ltd. and Ors. v. Assistant Collector of Central Excise, Mangalore and Ors. 1986 (23) E.L.T. 48 (Karnataka) and (v) Assistant Collector of Central Excise, Rajahmundry and Anr. v. Andhra Pradesh Paper Mills Ltd. Rajahmundry 1987 (32) E.L.T. 684 (A.P.). Relying on these decisions Shri Desai, the learned Counsel for Respondents, points out that by statutory amendment brought out by the Finance Bill of 1982, introducing an Explanation to sub-clause (ii) of Clause (d) of subsection (4) of Section 4, the view expressed in Modi Rubber case or in Andhra Pradesh Paper Mills case is no more good Law, and, therefore, as held in the cases cited (supra), the Department was justified in taking the view that the petitioners were not entitled to the benefit of duty rebate since they did not pass on the benefit to their consumers. 15. There are more than one reasons why we find that there is hardly any merit in the contention of Mr. Taleyarkhan, the learned Counsel appearing for the petitioners. In the first place, it is not possible to give effect to the principles laid down in Modi Rubber Ltd. case (1978) (2) E.L.T. 127 Delhi as well as in the case of A.P. Paper Mills Ltd. (198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate anywhere that the exemption granted by it was conditional on its being passed on to the consumer and that administrative instructions could not travel beyond this and deny the relief granted by the notification. On some what similar argument the Court pointed out that the assessable value had already been determined at Rs. 100/- on the basis of the selling price with reference to the rate of duty prescribed in the First Schedule and that the Department's contention involved a computation of this assessable value once again after giving effect to the notification. In this context the Court observed : "....It is erroneous to suggest, as is done by the Government, that assessable value will have to be again determined after taking into consideration the relief and exemption granted under the notification, dated 16th June, 1976. It is neither intended by the notification nor is it practicable that the assessable value should be determined, after giving effect to the relief and the exemption contemplated under the said notification. This in effect would be the stand of the Government by its insistance that it is only when the benefit of the rebate in duty is passed on by the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment has altered the position by expressly integrating and incorporating the effect of the notification in the statute. The assessable value can no longer be computed by reference only to the Act and Schedule without taking into consideration the effect of a notification under Rule 8, where it exists. This is made doubly clear by amending the definition of assessable 'value' and clarifying that, for this purpose the duty payable would be the 'effective duty' payable after taking the notification into account. This amendment vitally alters the first stage of computation which was easily done under the Act earlier without any reference to the notification. Though the terms of the notifications under Rule 8 remain unaltered, the inclusion of a reference to the notification in Section 4 itself has made the notification a material part of that section which can no longer be interpreted without reference to the notification." 18. Next on true interpretation of Section 4(4)(d)(ii) of the Act it is also observed that: "It appears to us clear that, the statute has, without any specific or direct reference to the earlier decisions, neutralised all the steps of logic on which the ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case. As such, it is no longer open for the party to contend that instead of the effective excise duty, the excise duty payable without taking into account the exemption granted has to be excluded from the normal price under Section 4 of the Central Excises and Salt Act, 1944." It is further held : "..The Explanation constitutes a part of the sub-clause (ii) inserted by the legislature as per Section 47 of the Finance Act, 1982 and serves the purpose of explaining what was required to be excluded from the normal price under sub-clause (ii). After the amendment from 1-10-1975, sub-clause (ii) will have to be read along with the Explanation there can be little doubt that what can be deducted from the cun-duty price is the actual amount of excise duty paid and not otherwise payable. As such it cannot be said that the Explanation overrides the principles set out in sub-clause (ii)." 20. Apart from the above two decisions, in case of Mangalore Chemicals and Fertilizers Ltd. and Others v. Assistant Collector of Central Excise, Mangalore and Ors. 1986 (23) E.L.T. 48 (Kar.), the Assessee not only challenged the Trade Notice dated 21st March, 1977 issued by the Collector which was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 18th June, 1977, whereunder certain types of papers were exempted from so much of the duty of excise leviable thereon by specified table set out in the Notification, on certain conditions. The said Notification came to be interpreted on a question as to how the assessable value should be determined and the rate of duty calculated after taking into consideration the exemption granted under the Notification. One of the contentions raised in that regard was that any exemption granted from excise duty under an exemption notification, is not to be taken into account for the purpose of determining the excise duty payable under Section 4(4)(d)(ii) of the Act. The interpretation of Section 4(4)(d)(ii) was not accepted and the Court held that :- "the value for the purpose of levy of excise is the normal price but not including the duty of excise payable." The Court further held - "...What is normal practice ? Under Section 2(10) of the Sale of Goods Act, 'price means money consideration for the sale of goods'. Normal price therefore is the amount paid by the buyer for the purchase of goods. It is the sum total of amount at the foot of the invoice which constitutes price. Price may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, 1987 (30) E.L.T. 217 (Bom.) and Aurangabad Paper Mills Ltd. and Anr. v. Union of India and Ors. 1988 (34) E.L.T. 603 (Bom.). 22. In view of these decisions in the field, it is not necessary to deal with the matter in any further detail inasmuch as the decisions upon which reliance is placed by the Respondents, sufficiently negative the petitioner's claim. Nevertheless, it may be stated that the present petition came to be filed on 2nd July, 1980. The petition is solely rested on the decisions which were pronounced before the Explanation to Section 4(4)(d)(ii) of the Act was inserted by Finance Act No. 47 of 1982. There is no amendment to the petition, inter alia, challenging the amendment to Section 4 of the Act by virtue of aforesaid Explanation. Moreover, it is an admitted position that the petitioners-assessees did not pass on the benefit of the exemption granted to them by the aforesaid notification to the consumers. Quite apart, the petitioners in the instant case do not deny that the Explanation inserted with retrospective effect from 1st October, 1975 applies to the present case. That being so, it is no longer possible for the petitioners to contend that instead ..... X X X X Extracts X X X X X X X X Extracts X X X X
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