A.K.Sen Gupta, J. - (1.) National Tobacco Company of India Limited moved this application under Article 226 of the Constitution of India challenging the legality and validity of a notice dated 14th April, 1975, issued by the Central Board of Excise and Customs (hereinafter referred to as the Board) under Section 35A of the Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act). During the pendency of the present proceeding, the said National Tobacco Company of India Limited was amalgamated with Duncan Agro Industries Limited (hereinafter referred to as the petitioner) whose name has been substituted in place and stead of National Tobacco Company of India Limited.
(2.) The petitioner has its factory situated 'at Agarpara in the District of 24 Parganas (West Bengal) and at Biccavollu in the District of Godavari (Andhra Pradesh). At the material time (20th January, 1972, to 19th January, 1973), the petitioner used to carry on business, inter alia, of manufacture of cigarettes and/or smoking mixtures. Central excise duty under said Act on the manufacture of cigarettes/smoking mixtures was leviable ad valorem.
(3.) It is the case of the petitioner that at all material times, the petitioner used to sell its own brand of cigarettes/smoking mixtures in wholesale quantities to the various stockists and/or distributors throughout the country. The prices charged from all such stockists and/or distributors were uniform throughout the country. It is alleged that the petitioner used to sell its products to the stockists and/or distributors on principal to principal basis and on the basis of the agreements entered into at arms's length and in its usual course of business. The stockists/distributors, after purchasing the goods from the petitioner, used to sell the same to their dealers who in their turn used to sell to the retailers. The petitioner never used to receive the price charged by the stockists/distributors from their buyers. The difference between the price at which the petitioner used to sell to its stockists/distributors and the price at which the stockists/distributors used to sell to their buyers represented the profit of the stockists/distributors which, according to the petitioner, was neither received nor receivable by the petitioner.;