M.C.Agarwal, J. - (1.) By this petition under Article 226 of the Constitution of India, the petitioner prays for the following reliefs : "i. Writ Order or direction in the nature of certiorari quashing the orders of the Assistant Collector, Central Excise, Allahabad dated 29-6-1981 and 30-6-1981 on the price list Nos. 1 of 1980 and 1 of 1981 (Annexure V & VI). ii. Issue writ order or direction in the nature of mandamus directing the Assistant Collector Central Excise, Allahabad to approve the price lists as submitted by the petitioner excluding the cost of packing. iii. Issue writ order or direction declaring Section 4 of the Central Excises and Salt Act to be ultra vires the legislative competence of the Parliament and/or to be ultra vires Section 3 of Act, which is the charging section. iv. Issue writ order or direction restraining the respondents not to demand the excise duty on the cost of packing for the period form 19-6-1980 to 1-3-1981 and 2-3-1981 to 30-6-1981. v. Issue writ order or direction in the nature of mandamus directing the Assistant Collector Central Excise to refund the amount of excise duty paid under protest on the cost of packing charges on or after 1st July, 1981 and not to demand any excise duty on the cost of packing charges on future clearance."
(2.) The petitioner is a company registered under the Companies Act, 1956 and is engaged in the business of manufacture and sale of excisable goods i.e. sheet glass. The question raised is about the inclusion of the cost of secondary packing in computing the assessable value of the goods for the levy of excise which is leviable ad valorem. Section 4 of the Central Excise Act, 1944 provides for determination of the value of excisable goods for the purpose of charging duty of excise and it was amended by Section 2 of the Central Excises and Salt (Amendment) Act, 1973 and was enforced from 1st October, 1975. The relevant portion of Section 4 of the Act is as under : "(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall subject to the other provisions of this section, be deemed to be (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale: Provided that (i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers not being related persons each such price shall, subject to the existence of the other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers: (ii)... (iii)... (d) "value", in relation to any excisable goods, ( i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. Explanation. - In this sub-clause, "packing" means the wrapper, container, bobbin, pirn, spool, reel or warp beam or any other thing in which or on which the excisable goods are wrapped, contained or wound."
(3.) The petitioner contended that the excise duty levied at the point of manufacture and, therefore, the amended Section 4 was invalid in so far as it provided for the inclusion of the cost of packing. At the hearing, however, this contention on which relief (iii) was claimed was not pressed. The petitioner's case was stated in paragraphs 10,11,12 and 13 of the writ petition which are as under : "10. That the petitioner has sold and is selling sheet glass, manufactured by it, in loose form i.e. without any packing as well as packing according to the instruction of the customers. 11. That the sheet glass is a very fragile item. It can break by the jerks of movement in transit from the factory to the place of purchaser. Its packing is done by the petitioner only and solely to avoid the risk of breakage in transit and to facilitate its safe delivery and transport. The packing of sheet glass has nothing to do with its manufacture. 12. That the petitioner packs sheet glass manufactured by it, because it is generally desired by its buyers. The packing is done to meet requirements of the buyers and they pay for it. Quite often packing is done in advance to avoid delay in delivery and to bring efficiency in sales. 13. That the buyers of the petitioner are at liberty to purchase sheet glass from the petitioner without any packing or to purchase it and to take delivery of it in their own packing materials. They can purchase it and take its delivery in their own trucks or vehicles, which may be layered with materials, such as, hay or grass to protect it from breakage during transits.";