R.M.SAHAI, J. - (1.) THE short question, on the undisputed facts, that arises for consideration, is the manner of determination of assessable value under S. 4 of the Central Excise & Salt Act, 1944. Admittedly, the petitioner carries on the business of manufacturing and sale of cigarette and smoking tobaccos of diverse kinds throughout India and owns and operates five cigarette factories in different States including the one at Saharanpur in Uttart Pradesh. Uner the Self Removal Procedure introduced, w.e.f., 1968 the petitioner used to submit price lists to the respondents from time to time as required under Rule 173 (c) of Central Excise Rules, 1944. Such lists detailed the prices for sales from the factory to distributors, from distributors to wholesale dealers, from wholesale dealers to retailers and up to point of time sale to consumers. For the purposes of S. 4 the prices charged by the distributors to wholesale dealers were taken to be the value for assessment purpose.
(2.) IT appears that as a result of Supreme Court decision in A.K. Roy and Ors. vs. Voltas Ltd. AIR 1973 S.C. 225 : 1973 CTR S.C. the petitioner took the stand from 1st March, 1973, onwards, that the prices charged by them for sales to distributors should be taken as wholesale prices and not the prices charged by distributors to wholesale dealers. The petitioner submitted a price list along with the statement showing turnover and selling costs and other manufacturing expenses. It was claimed that the expenses incurred under the following heads were post manufacturing expenses and, therefore, they do not form part of the wholesale cash price for the purposes of determining assessable value under S. 4 the Act: (a) Marketing and distribution expenses (b) Advertising expenses (c) Freight on Cigarette and smoking mixture, (d) Interest.
(3.) POST manufacturing costs were worked out by the auditor of the petitioner by applying the principles laid down by the Central Board in Bata Shoe Co.'s case.;