Samaresh Banerjea, J. - (1.) Similar question of fact and law being involved in each of the petitions, wherein similar order passed by the Commissioner of Appeals, Central Excise, Calcutta, disposing of the prayer for stay and exemption for pre-deposit under challenge, the same have been heard analogously and will be governed by the same judgment.
(2.) Each of the petitioners company which is a manufacturer of foot wear chappals and duly registered with the Central Excise Department, Calcutta, as a manufacturer of foot wear and is duly certified small scale unit, claims that it has its own factory with plant and machinery for production of leather chappals and has its own labour force and expertise and always used its own raw-materials for production of the same and the total production of the petitioner company were sold on wholesale basis and not on retail through any selling or zonal agent or through any dealership, distributorship or stockist arrangement. It is the further case of each of the petitioners that in the year 1994-95 the respondent No. 7 Bata India Ltd. entered into an arrangement with the writ petitioner company by placing its purchase orders time to time for supply of different categories of chappals strictly according to the Bata's specifications and designs. The arrangement for such sale to Bata India Ltd. is according to a normal business transaction with principal to principal basis which stipulates, inter alia that the goods manufactured should be strictly according to the specification and the sample provided to the petitioner by the said Bata India Ltd; the purchaser Bata India Ltd. shall have the right to reject the whole or part of the goods if the same are found on inspection to be defective or not according to the specification and in such event the Bata India Ltd. shall have the right to treat the seller i.e. the petitioner as being in breach of contract holding responsible for compensation. It is the further case of the petitioner under such agreement the petitioner company at the time of delivery has to emboss the brand name of "Bata" upon each of the items; the purchase price and excise duty payable thereon namely at the price the Bata India Ltd. purchases the goods from the writ petitioner company, the wholesale price at which the goods are sold by the Bata India Ltd. to its own dealers and stockists and the maximum retail price at which the said goods are being sold in retail by Bata India Ltd. or through its stockists have also been disclosed in the purchase order of Bata India Ltd. and the writ petitioner was paid by the Bata India Ltd. according to the purchase price mentioned in the purchase order on free delivery to Bata India Ltd. After supply of the said goods to the Bata India Ltd. strictly according to the Bata's specification and design the petitioners company from time to time raised its bills upon M/s. Bata India Ltd. calculated upon the purchase price as mentioned in the purchase order and the goods were found acceptable then the Bata India Ltd. made payment to the petitioner by cheque. It is the specific case of the petitioner they have no right to sell or dispose of such branded goods of specific design to any other party except Bata India Ltd. Even upon rejection of the goods by Bata India Ltd. which does not conform with the fixed specification; the writ petitioners have to destroy the same as they have no right to use such brand name of the goods. As the excise duty is payable at the market value fetched by the goods in the wholesale market at the factory gate manufactured by the manufacturers, the writ petitioner according to the provisions of the Central Excises and Salt Act, 1944 deposited the excise duty calculating on the purchase price at which the Bata India Ltd. purchased goods from the petitioner and duly deposited such amount in advance through the personal ledger account and thereafter cleared the goods in accordance with the invoice which also were prepared on the basis of the purchase price of the said goods. The Superintendent of Central Excise, Range D-6, Calcutta Division, issued 4 different show cause notices and demand notices upon each of the writ petitioners on different times for the period of demand from April, 1994 to July, 1995 alleging, inter alia, the writ petitioner followed the provisions of Rule 9(1), 173(C), (F), (G) of the Central Excise Rules, 1944, read with the relevant provisions of Section 4 of the Central Excises and Salt Act, 1944 and thereby the petitioner has paid short payment of Central Excise duty by not calculating the value of the goods on the basis of the wholesale price of Bata India Ltd.
(3.) Each of the petitioners submitted its reply to the said show cause notices explaining the aforesaid agreement with the Bata India Ltd. in which all the manufacturer of the chappals embossing the trade name of Bata they are selling the same to Bata India Ltd. as per their specification and contending, inter alia, that because of the same the wholesale price charged by the petitioner from Bata India Ltd. and the purchase price of Bata India Ltd. from the petitioner would be the correct basis for levy of the excise duty.;