M.M.Dutt, J. - (1.) This appeal has been preferred by the Central Excise authorities against the judgment of a learned single Judge of this Court, whereby the learned Judge made absolute the Rule Nisi issued on the application of the respondent company, Free India Dry Accumulators Ltd., under Article 226 of the Constitution.
(2.) The question that is involved in this appeal relates to the assessment of excise duty payable on the wholesale cash price of storage batteries. On April 30, 1970, the South Eastern Railway placed an order with the respondent for supply of 192 sets of electric storage batteries. The batteries were to be manufactured with old containers to be supplied by the Railway, the value of which was agreed to be adjusted against the price of the finished batteries. The price of each finished battery was fixed at Rs. 309.50 but, as the Raliway would supply the containers, it was agreed that a rebate of Rs. 50/- was to be deducted from the said price. Consequently the Railway was to pay a sum of Rs. 259.50 for each battery. The said contract dated April 30, 1970 was, however, subsequently amended on March 29, 1971. The Railway agreed to supply also the lead acid required for the manufacture of batteries, and it was agreed that a further rebate of Rs. 30/- being the price of lead acid would be deducted from the price of each finished battery. So, a total rebate of Rs. 80/-was agreed to be deducted from the price of Rs. 309.50.
(3.) There was a second contract between the parties on November 30, 1979 whereby the price of each battery was fixed at Rs. 318.07, and a rebate of Rs. 80/- was agreed to be deducted from the said price as the Railway would supply the containers as also lead acid.;