2001 (10) TMI 130

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..... rovision. 2. The appeal is at the instance of revenue. The respondent is engaged in the manufacture of bulk drug falling under chapter 29 of Central Excise Tariff Act, 1985. A show cause notice was issued to them demanding differential duty for the reason that price of certain items manufactured by the respondent was fixed below the price fixed under Drugs Price Control Order, 1995. Rejecting the objection raised by the party, the Assistant Commissioner, Central Excise confirmed the demand and a penalty was also imposed. The party took up the matter in the appeal. The Commissioner (Appeals) accepted the contention raised by the appellant and held that the goods sold at the normal price would attract duty only at such a price notwithstandin .....

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..... rt it was held clause (a) of sub-section (1) of Section (4) provides that the goods should be valued with reference to normal price thereof and if there is a Price Control Order in force, it is expected that the goods would ordinarily be sold at the controlled price. The point is placed beyond doubt by the proviso (ii) to Section 4(1) (a) of the Central Excise Act, 1944. 5. What has been relied on by the respondent is a Board Circular No. M.F. (D.R.) F. No. 31/1/75-CX., dated 8-8-75 which is quoted below : "10. Proviso (ii) of Clause (a) of sub-section (1) of the new Section 4. - (1) This proviso gives legal basis for assessment of the goods on the basis of a statutory price. The statutory price may be a fixed price or the maximum price. .....

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..... price or the maximum price fixed under any law, the assessment shall be made at the price or the maximum price so fixed and the 'normal price' will not be determined in the manner laid down in proviso (iii)" 6. The above shows that the Board Circular is an interpretation of proviso (ii) of clause (a) of sub-section (1) of Section (4) sought to be given by the Board which is totally opposed to the interpretation given by the Supreme Court in [1998 (99) E.L.T. 486]. The learned DR is fully justified in placing reliance on Hindustan Aeronautics Ltd. v. Commissioner of Income Tax, Bangalore - 2000 (119) E.L.T. 513 (S.C.) where the Apex Court has held that when the Supreme Court or High Court has declared the law on the question at issue, it wi .....

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