(1.) Messrs Atic Industries Limited is the petitioner. The petitioner is engaged in the business of manufacturing dyes ans has got its factory in the State of Gujarat. the share capital of the petitioner-comapny is held by two companies. Atul Products Limited holds 50 percent of the share capital and Imperial Chemical Industries Limited, London, holds the remaining 50 per cent of it. The company has been selling a large part of its products to Messrs Atul Products Limited ans Imperial Chemical Industries (India) Private Limited, (hereinafter referred to as the buyer). It may be stated that Imperial Chemical Industries (India) Private Limited is a subsidiary wholly owned by Imperial Chemical Industries Limited, London. Though it is not necessary for the purpose opf this case to state we may state that since March 13, 1978 Imperial Chemical Industries (India) Private Limited has ceased to be the subsidiary wholly owned by Imperial Chemical Industries Limited, London, and its name has also ben changed to Crescent Dyes and Chemicals Limited. 60 per cent of its share capital since March 13, 1978 has been put in the market and has been held by Indian citizens. the remaining 40 percent of its share capital is held by Imperial Chemical Industries Limited, London. It is the case of the petitioner that transactions between the petitioner- comapny on the one hand and Atul Products Limited and Imperial Chemical Industries (India) Private Limited now known as Crescent Dyes and Chemicals Limited, the nuyers, are on the principle-to-principle basis and that no consideration other than commercial considerations enter into the trasactions. On September 15, 1975 the petitioner- company submitted a declaration showing the asseesable value of the excisable goods. On October 1, 1975 section 4 (as amended) of Central Excises and Salt Act, 1944 came into force. On September 19,1975 the Supreintendent of Central Excise demanded certain information from the petitioner and the petitioner supplied it by his letter dated September 23,1975. Correspondence between the Supreintendent of Central Excise and the petitioner-comapny passed between Oct. 8, 1975 and Oct 20, 1975. On Oct 29. 1975 the Assistant Collectors of Central Excise approved the price list cubmitted by the petitioner-company. In pursuance thereof the petitioner-company went on clearing the goods after paying the excise duty at the specified rate of 30 percent on the basis of the assessable value as shown in the price list approved by the Assistant Collector. Between December 6, 1975 and July 21, 1976 corrspondence betweebn the Central Excise authorites and the petitioner-comapny went on. By that correspondence the Central Excise authorities demanded certain information which the petitioner-comapny supplied. On July 31, 1976 the Supreintendent of Central Excise issued a notice to the petitioner-company calling upon the petitioner-comapny to show cause why the earlier decision of the Assistant Collector approving the price-list should not be reviewed on the ground that the company ans the buyers are "related person". The petitioner-company waas also called upon to show cause why the differential duty worked out on the baisi of the selling price charged by the buyers with effect from Oct. 1, 1975 should not be recovered. On Augut 31, 1976 the petitioner-company gave reply to that notice. the petitioner- compny inter alia contended in the reply that the Assistant Collector of Central Excise had no power or authority to review his own decision; that in any case he had no power to review it resrocpectively, that section 4 (as amended) of the Central Excises and Salt Act, 1944 was ultra vires the Constitution; and that the petitione-comapny and its two buyers were not "related person" within the meaning of that expression as given in amended Section 4 of the Central Excises and Salt Act, 1944. On November 19, 1976 the Assistant Collector gave personal hearing to the petitioner-company. On Decemaber 10, 19076 the Assistant Collector reviewed his earlier order of approval of the petitioner's price-list and confirmed the demand of different in dtuy with retrospective effect from October 1, 1975 and directed the petitioner-comapny to file a frash price-list. Between December 27, 1976 and December 29, 1976 some correspondce ensued between the petitioner-company and the Superintendent of Central Excise in regard to the selling prices charged by the buyers. On December 31, 1976 the Suprerintendent of Central Excise directed the petitioner to pay a sum of Rs. 81,98,087.88 ps. on account of differnce in excise duty for the period October 1, 1975 to December 31,1976. therefore, on January 7, 1977 the petitioner filied the present petition. After this petition was filed,the Asseiatent Collector of Central Excise made a fresh demand for an additional sum of Rs. 35,79,650. 07 ps. in respect of the goods cleared by the petitioner-comapny between October 1, 1975 and December 31, 1976 on the ground that five percent discount which was given by the petitioner's buyers to thier customers was not admissible. Therefore, the total amount which the petitioner-company was xalled upon to apy was Rs. 1,17,77,737.65 ps. On March 8, 1977 the petitioner-company preferred an appeal before the Appeal Collector in which the petitioner raised certain grounds against both the demands made by the Assistant Collector. On August 9, 1978 the Appellate Collector gave the petitioner-company personal hearing. On August 28, 1978 the Appellate Collector rejected the appeals without going into thir merits mainly on the ground that this Writ Petition had been pending before this Court where all questions raised by the petitioner-company would be decided.
(2.) It is these circumstances which have given rise to this petition. the contentions which have been raised by Mr. Bhatt who appears on behalf of the petitioner-company are as follows:-
(1) Section 4 (as amended) of the Central Excises and Salt Act, 1944, is ultra vires the Constitution and Section 3 of the said Acr.
(2) The Assistant Collector of Central Excise did not have the power and authority to review the price-list which he had already approved.
(3) In any case, the Assistant Collector of Central Excise did not have the power to review the price-lisxt retrospectively.
(4) The petitioner-company and its buyers are not "related persons".
(5) In any case the price which the petitioner-company charged it buyers was the normal price within the meaning of that expression givn in clause (a) of sub-section (1) of Section 4.
(6)The order passed by the Assistant Collector of Central Excise was passed without applying his mind because he did dale with the various contentions raised before him.
(7) the Appellate Commissioner also did not apply his maind to the various contention raised before him in appeal.
(8) Orders as Annexures "H" and "N" are illegal and deseve to eb set aside
(3.) The first contention is not open to arguments because is Special Civil Application No. 119 of 1976 decied by us on 2oth/ 21st February 1979 E.L.T. (J 407)] we have declared a part of amended Section 4 ultra vires the legislative competence of Parliament under Articles 246 read with Entry 84 in the Union List and in light of Entry 54 in the State List. We have futher held that it is not saved by Entries 92-A and 97 in the Union List. Therefore, for the reasons stated in that judgment we declare that the concept of "related person" occurring in amended Section 4 is ultra vires the legislative competence of Parliament under Articles 246 read with Entry 84 in the Union List and in the lighrt of Entry 54 in the State List. Accordingly the expression "...the nuyers is not a related person and..." and proviso (iii) to clause (a) in sub-section (1) of Section 4 are struck down.;