TMI Blog1983 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... he table thereof from so much of the duty of excise leviable thereon, both under the Central Excise Act and the Additional Duties of Excise Act, as was in excess of the duty specified in the corresponding entry in the second column of the table. There was a proviso which followed the table which is most relevant here. It read : "Provided that (i) if it is proved to the satisfaction of an officer not below the rank of an Assistant Collector of Central Excise that any cigarettes have been manufactured wholly from unmanufactured tobacco falling under sub-item 1(1) or sub-item (4) of item No. 4 of the First Schedule to the Central Excises Act, on which the appropriate amount of duty of excise as leviable thereon on or before the 28th Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of relief at the rate of Rs. 5.50 per thousand cigarettes on account of such duty, in terms of the notification, in the aggregate sum of Rs. 7,30,752/- during March 1979. It stated that the petitioners should have determined the assessable values of the cigarettes by applying "the reduced rates of duty for such clearances and duty payable worked out on the basis of such enhanced assessable value". It stated that the petitioners' calculations had resulted in a lower assessable value and a short payment of Rs. 21,69,704.07, details whereof were given in an annexure. The petitioners were required to show cause why Rs. 21,69,704.07 should not be recovered from them. The annexure read thus : "CATEGORY OF CIGARETTES REBATE AVAIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise, Bombay, dated 24th September 1979 in an appeal filed by M/s. Golden Tobacco Company in relation to the notification. It wholly supported the petitioners' method of calculation. The 2nd respondent had, in his order, only this to say of it, "In this connection I understand the department is considering review of the above-mentioned order of the Appellate Collector." 7. This petition was filed on 6th October 1980 impugning the 2nd respondent's order. 8. Mr. Desai, learned counsel for the petitioners, submitted that the method of calculation upheld by the impugned order was incorrect for it artificially raised the price of the petitioners' cigarettes whereas, in fact, the price remained the same. He submitted that the notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the cigarette manufacturer is given the benefit of an exemption from paying Rs. 5.50 per thousand cigarettes from out of the duty of excise leviable thereon only provided he has manufactured cigarettes from unmanufactured tobacco upon which the appropriate amount of excise duty has been paid. 12. The appellate order in the case of Golden Tobacco, which the 2nd respondent brushed aside, puts it tersely and correctly, thus : "Had the Government's intention been to reduce the effective rate of duty they could have done so straight off by reducing the rates by Rs. 5.50. This has not been done. Instead of that a provision has been included in the notification to give this relief. It would be wrong to reduce or change the effective rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tton seed oil were used in 2 kgs. of Pakav and that, therefore, under the notification, the rebate on the price of cotton seed oil at the rate of Rs. 7.50 per quintal worked out to 6 paise. According to the oil mills, therefore, the net excise duty actually payable was 43 paise per kg. The Superintendent of Central Excise, however, issued a show cause notice to them informing them that the correct method for arriving at the assessable value was to deduct from the sale price, not duty at 5% ad valorem, but the duty actually payable after the rebate on account of cotton seed oil content was adjusted. It said that the method adopted by the oil mills afforded them an unintended benefit. The show cause notice was confirmed and an appeal therefro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a benefit as an incentive with a view to encourage consumption of cottom seed oil. He accepted the approach of the authorities and dismissed the petition. 14. Two aspects need to be noted. First, that the price fixed by the Vegetable Oil Products Controller remained the same whichever approach was adopted. Secondly, that, as the learned Judge interpreted it, the notification conferred no benefit upon the manufacturer of vegetable products. Since Mr. Dalal placed great reliance upon this judgment I enquired of him upon whom the benefit was intended to be conferred. In reply, Mr. Dalal pointed out that even in this petition the petitioners had alleged that the benefit under the notification was intended to be conferred upon the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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