- (1.)This appeal is directed against the judgment and order dated 13th September, 2002 passed by the High Court of Judicature at Bombay in Writ Petition No. 2986 of 1986. By the impugned judgment the Division Bench of the High Court set aside two show-cause notices dated 12th August, 1985 and 4th February, 1986 issued by Superintendent of Central Excise for short payment of excise duty Under Section 11A of the Central Excise and Salt Act, 1944 (hereinafter referred to as, 'the Act').
(2.)The factual matrix of the case is as follows:
The Respondent-Mahindra & Mahindra Limited is a Public Limited Company (hereinafter referred to as the "Assessee") and manufactures agricultural tractors (falling under Tariff item No. 34-II), required engines (Tariff item No. 29) and certain components (Tariff item No. 68) for the same at its factory situated at Kandivali, Mumbai. The Assessee has its sales depots at Bombay, Daman, Ludhiana and Lucknow, etc. It had been filing classification list and price list periodically under the procedure of self-removal of excisable goods which is under control and supervision of Inspectors of Excise at the factory level who in turn are under the control of the Superintendent of Excise. Accordingly, the Assessee had been paying the excise duty on the goods removed at the factory gate regularly.

(3.)The competent authority in exercise of power conferred under the Act issued two above referred show-cause notices dated 12th August, 1985 and 4th February, 1986. The first show-cause notice dated 12th August, 1985 covered the period from 1982 to 1985 and alleged therein:
(i) that the Assessee sold the duty paid stocks from their sales depots at the higher price;

(ii) that the sales depots were related persons and that therefore the price at which the goods were sold from the depots should be considered as the assessable value;

(iii) that though the retail price included excise duty, freight and dealer's margin, excise duty had been paid at the factory gate without including the aforesaid amounts and that this was incorrect in view of Rule 6(a) of Central Excise (Valuation) Rules, 1975;

(iv) that the Assessee had not included in the assessable value (1) after sales services charges (2) dealer's margin (3) marketing and selling expenses and (4) excess freight;

(v) that the Assessee had concealed the invoice value.