S.H.SHETH - (1.) The petitioner is a company incorporated under the Indian Companies Act and has been engaged in the manufacture of cigarettes Amongst other places it has got a factory at Baroda. On the manufacture of cigarettes the petitioner company was called upon to ply excise duty. While determining the assessable value of cigarettes for the purpose of collecting excise duty the Central excise authorities included in it certain post manufacturing expenses such as advertisement expenses storage expenses marketing and distribution expenses and Bank charges and interest recovered by the petitioner Company from wholesale buyers who enjoy a certain credit. The Assistant Collector of Central Excise determined the assessable value after including therein expenses under all these heads. The petitioner appealed against the order to the Appellate Collector of Central Excise who confirmed it.
(2.) Under the aforesaid circumstances the petitioner has filed this petition in which two questions are raised for our decision : (1) Assessable value for excise duty cannot include post manufacturing expenses because excise duty is a tax on manufacture on production. (2) If post manufacturing expenses are included the assessable value sec. 4 of the Central Excise and Salt Act 1944 would be ultra vires the legislative competence of Parliament under Art. 246 of the Constitution read with Entry 84 in List I and Entry 54 in List II.
(3.) In order to answer the questions which have been raised before us it is necessary to make a short reference to a few decisions which have a bearing on the first question. Some of them have interpreted sec. 4 as it was before it was amended in 1975 and the others have interpreted the new section.;