Venkataramiah, J. - (1.) This is an appeal by special leave filed against the order dated November 4,1971 in Civil Writ No. 1159 of 1971 on the file of the High Court of Delhi dismissing the said petition in limine. The appellant is a manufacturer engaged in the business of manufacturing certain vegetable oil products (hydrogenated oil) at its factory in Delhi. Vegetable Oil product was an essential commodity under section 2(vi) of the Essential Commodities Act. 1955. On February 22,1971 the Director (Vanaspati), who had been authorised by the Vegetable Oil Products Controller of India under sub-clause (a) of clause (ii) of the Vegetable Oil Products Control Order, 1947 to exercise the powers of the Controller under the said Order issued a notification in exercise of the powers conferred by sub-clause (i) of clause 6 thereof read with the notification of the Government of India in the Ministry of Food and Agriculture dated September 24,1958 and in supersession of the notification of the Government of India issued on the above subject earlier fixing maximum prices at which the vegetable oil products might be sold in the various zones specified therein with effect from February 23, 1971. Delhi came within zone 'A'. Under that notification the maximum price at which the appellant might sell its vegetable product known as 'Panghat' in bulk pack was Rs. 81.04 per tin of 16.5 Kilograms and the maximum price at which it could sell the vegetable product manufactured by it known as 'Roshni' in bulk pack was Rs. 74.00 per tin of 15 Kilograms. The excise duty payable on the said products under the provisions of Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act') was 5 per cent ad valorem, but during the period between May 4, 1971 and July 22, 1971 owing to the depression in the market the appellant had to sell on wholesale basis 'Panghat' brand vegetable product at Rs. 78.66 per tin and 'Roshni' brand vegetable product at Rs. 71.62 per tin in order to clear the accummulated stock and to avoid huge loss. These prices were lower than the maximum prices prescribed by the notification, referred to above. On May 4,1971 the appellant submitted a price list in respect of 'Panghat' and 'Roshni' bulk packs showing the wholesale cash price of these products at Rs. 78.66 and Rs. 71.62 per tin respectively as stated above to the Superintendent, Central Excise, Sabzi Mandi, Delhi as required by Rule 17-1-C of the Central Excise Rules, 1944 and sought his approval therefor. The Superintendent, Central Excise rejected the prayer of the appellant and directed that the Central excise duty was payable on the basis of the maximum prices fixed by the Ministry of Food and Agriculture under the notification referred to above. Aggrieved by the said order, the appellant filed an appeal under S. 35 of the Act before the Deputy Collector (Technical) of Central Excise, Bahadurshah Zafar Marg, New Delhi which was rejected by him. The short order dated August 28, 1971 passed by the Deputy Collector (Technical) on that appeal read as follows:"I have carefully considered all the points raised by the appellants in their appeal and those made by them at the time of personal hearing. 2. The appellant's main contention is that the price of the vegetable product fixed by the Government in the Ministry of Food and Agriculture would form the basis of assessment of Central excise duty only if the statutory price and their wholesale price at which the goods are sold are the same, but if their wholesale price is less than the statutorily fixed price, it was not justifiable to assess Central excise duty on the Government fixed price. 3. I do not accept the above contention of the appellants. Since in the case of Vegetable Product, the wholesale price is controlled under Vegetable Oil Control Order by the Govt. in the Ministry of Food and Agriculture, only such controlled price should be made the basis of assessment of duty for the purpose of section 4 of the Central Excises and Salt Act, 1944. I, therefore, do not see any reason to interfere with the price approved by the Superintendent of Central Excise."
(2.) Aggrieved by the decision of the Deputy Collector (Technical) the appellant filed the writ petition before the High Court out of which this appeal arises contending that the maximum price fixed by the Government of India above which the goods in question could not be sold should not be taken as the basis for levying excise duty under the Act when the appellant had to sell the goods in question at a lower rate owing to bona fide commercial reasons. That petition was rejected in limine by the High Court and this appeal is filed against the order of the High Court.
(3.) The material part of S.4 of the Act, as it stood at the relevant time, read as follows "Determination of value for the purpose of duty:Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be - (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or.............";