S. Ranganathan, J. - (1.) These four writ petitions filed by Hindustan Milk Food Manufactures Ltd. (now known as HMM Ltd.), hereinafter referred to as 'the assessed', raise the question of determination of the 'assessable value' of the assessed's products for purposes of levy of the ad valorem duty of central excise. All the four writ petitions raise the same issue and the facts are also similar but for minor differences that will be noticed at the appropriate places. The writ petitions have been argued on the basis of the affidavits, material and counter -affidavits placed on record in C.W. 980/79 and hence the issues will be discussed in the context of those facts in this judgment.
(2.) The assessed is engaged in the manufacture and sale of milk food and dairy products and sells, inter alia, the goods popularly known as Horlicks, Elaichi Horlicks and Boost. These products fall under Tariff Item No. I -B of the list set out in the First Schedule to the Central Excises and Salt Act, 1944 ('the Act') viz. "Prepared or preserved foods put up in unit containers and ordinarily intended for sale...". Excise duty is livable on them ad valorem on the assessable value determined under Sec. 4 of the Act. The duty livable was 10% on the said value from 1.3.1969 to 28.2.1978. From 1.3.1978, a special duty of 5% was added thereto. However, with effect from 1.3.79 the special duly was abolished but the rate of duty was raised to 15%. We are, however, concerned in these writ petitions with goods manufactured and sought to be cleared between 15th May 1971 and December 1976. One material fact that is of great importance in deciding the writ petitions is that Sec. 4 of the Act which provides for the determination of the assessable value was substantially and materially amended by Act 22 of 1973 (with effect from 1.10.1975). The questions at issue in these writ petitions, therefore, need separate consideration under the pre -amendment as well as the post -amendment language of the above section. Before proceeding to consider the contentions urged before us, it is necessary to set out the material and relevant facts.
(3.) The assessed manufactures its products at two factories situated in Nabha (Punjab) and Rajahnmndry (Andhra Pradesh). All the produce, however, is sent by road transport to packing stations located at Faridabad (Haryana), Bangalore (Karnataka) and Howrah (West Bengal) where they are got packed by independent contractors. For example, the powder manufactured at Nabha is sent from time to time in steel drums to the packing station at Faridabad. At Faridabad the packing of this powder into smaller containers like glass bottles is effected by a firm of packers known as A.K. Packaging at certain rates fixed by a written contract. All the packaging material is provided by the assessed. The packaging firm provides the company with storage space for the powder, the packaging material and other accessories free of charge. The packing contractors give the assessed a complete account tallying each consignment of powder received by them with the packaging done by them. At this stage, the manufacturing process of the assessed is claimed to have come to an end. The packing stations are thus part of the 'factory' for the purposes of the Act. The selling operations, it is claimed ,start from the stage when the packed goods have to be sold in the market.;