- (1.) THE petitioner company is a manufacturer of cigarettes and tobacco and owns a factory at Agarpara, in the District of 24 Parganas. As such manufacturer, the petitioner company has to pay excise duty on the value of cigarettes manufactured by it. At the relevant period, namely, during the years 1955 to 1957, the excise duty used to be levied on a slab system, for example, if the price exceeded Rs. X but not Rs. Y per thousand sticks of cigarettes then there was duty levied at a particular rate, but if the price exceeded Rs. Y but not Rs. Z per thousand sticks of cigarettes then duty was levied at a much higher rate. It was, therefore, to the interest of the manufacturer to keep the value within the lower slab and it was the endeavour of the Central Excise Authorities to see that the value was properly calculated.
(2.) THE petitioner company being a large scale manufacturer of cigarettes, special arrangement was made for collection of excise duty from it. Every year, in January, April, July and October, the petitioner company used to advise the Central Excise Authorities on the price structure of all brands of cigarettes manufactured by it. This was done by issue of consolidated quarterly price lists, in a form prescribed. The Central Excise Authorities used to verify the price lists from the market and then issue a certificate to the petitioner company accepting the price lists, with or without modification. Until such time as the verification was completed, the price list used to be provisionally approved and excise duty used to be collected on that basis until issue of a final certificate. For the purpose of facility of collection of duty, the petitioner company maintains a large sum in deposit, in a current account with the Central Excise authorities. Before clearance of cigarettes manufactured by the petitioner company, it submits in the prescribed form, known as A. R. I, forms, particulars of cigarettes to be cleared. The entries in the form are checked, the duty payable is assessed and is paid by debit adjustment in the current account. On realisation of the duty, in the manner aforesaid, cigarettes are allowed to be cleared. The said current account is stated every month in a form known as "personal Ledger Account", showing there in the opening balance of the month, credit deposits, debits during the month and the closing balance. The form is signed by the petitioner and is reported to the authorities in token of settlement of account. The Central Excise Authorities maintain an office in the factory premises of the petitioner company from where the clearance of cigarettes and the collection of duty thereon are primarily controlled.
(3.) THE price list, as originally prescribed, had nine columns, including a column headed "distributor's selling price". This price used to be verified by Central Excise Authorities and a certificate used to be given. Until then, excise duty used to be collected provisionally on the basis of unverified distributor's selling price and if any discrepancy was found on subsequent verification, the difference, if short levied, used to be subsequently adjusted. The petitioner company used to issue the price list in the old style, upto the quarter beginning July, 1957, when this form was suddenly changed. The new form contained only six headings, namely, (1) brand (ii) net assessable price (iii) duty (iv) stockist's price (v) retail price per packet and per tin (vi) remarks. The heading "distributor's selling price" disappeared from the prescribed price list.;