B.S.DHILLON,J. - (1.) THIS common judgment will dispose of Civil Writ Petitions Nos. 6958 and 6959 of 1975, as common question of law is involved in both the petitions. It was conceded by the learned counsel for the parties that the decision in C. W. P. No. 6959 of 1975, will also govern the fate of C. W. P. No. 6958 of 1975. The learned counsel for the parties, therefore, only referred to the facts as alleged in C. W. P. No. 6959 of 1975, which may briefly be thus stated.
(2.) MESSRS American Universal Electric (India) Ltd. , Faridabad is a public limited company incorporated under the Companies Act. This company is engaged among other things in the business of manufacture of coolers and electric fans and for this purpose owns a factory situate in Model Town Faridabad. The petitioner Company is also engaged in the business of sale of air-coolers and electric fans and has thus set up various branches and depots all over the country namely, at Delhi, Madras, Bombay, Calcutta, Patna, Ahmedabad, Hyderbad, Ghaziabad and Chandigarh for sales promotion and to ensure prompt supplies and maintain after sales and service. The Petitioner Company alleges to have a large number of dealers to look after the sales of its products. Trade discounts and credit terms are given to its dealers by the* petitioner Company in the normal course of business, keeping in view the potential of the town, the financial capability of the dealer and expenses incurred in moving its products to its branches in different towns. The various Kroducts of the petitioner Company are being sold on its uniform list prices. : is alleged that the list prices comprise not only of manufacturing cost and manufacturing profits but, also of post-manufacturing expenses which inter alia include octopi, freight, interest, service charges, royalty, publicity, advertisement charges and selling expenses incurred in marketing and distribution. The products manufactured by the petitioner Company are admittedly subject to the levy and payment of excise duty under the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act ). Section 3 of the Act provides inter alia that the excise duty shall be levied and collected in such a manner as may be prescribed on all excisable goods other than Salt which are produced or manufactured in India at the rates set forth in the First Schedule. Section 4 of the Act, with the interpretation of which we are concerned in the present cases, is as follows : - "4 Determination of value for the purposes of duty.- Where under this Act, any article is chargeable with duty at a rate dependent on the value of the articles, such value be deemed to be - (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place at the nearest place where such market exists, or (b) * * * * Explanation.- In determining the price of any article under this section, no abatement or deduction shall be allowed except in respect of trade discount and amount of duty payable at the time of the removal of the article chargeable with duty, from the factory or other premises aforesaid. "
(3.) THE petitioner Company kept on paying the excise duty in respect of the products manufactured by it on the price declared in the price list. The said price list allegedly was inclusive of post-manufacturing expenses, such as octopi, freight etc. paid for the transfer of stock interest involved in the wholesale price which gives credit to the wholesale buyers for a period of time, advertisement, royalty, packing and selling cost plus selling profits. The petitioner-Company kept on submitting the prices of its products duly filed in the proforma known as "price List" under Section 4 (a) of the Act for payment of excise duty to the petitioner-Company, the excise duty was being paid under a bona fide mistake of law that the same was leviable and payable on the basis of the price list which included post-manufacturing expenses. When Supreme Court of India decided in A. K. Roy and Anr. v. Voltas Limited, A. I. R. 1973 Supreme Court 225-[1977 E. L. T. (J 177)] it is alleged that the petitioner company then realised and discovered the correct legal excise duty, which according to the petitioner Company, was position and therefore, claimed for the refund of the being illegally and unauthorisedly charged and realised in excises inasmuch as while excise duty was chargeable legally only on the real profits in respect of these products Excise Duty according to the petitioner had been assessed, determined and realised on the value inclusive of post-manufacturing expenses coupled with selling cost and selling profits. Vide letter dated 30th March, 1973, the petitioner Company submitted the revised price list dated 24th March, 73 in respect of air coolers approval of respondent No. 2 the Assistant Collector, Central Excises, Sector 4, Faridabad. In working out the assessable value, the petitioner-Company allegedly excluded the post manufacturing expenses, namely, octopi, freight etc. etc. and a request was made to approve the declared price. Similarly, on 26th April, 1973, the petitioner Company submitted the price lists in respect of electric fans for approval of the Superintendent, Central Excise, Faridabad, respondent No. 3. Correspondence went on between the petitioner Company and the respondents, but in spite of the repeated requests, it is alleged that respondents. Nos. 2 and 3 did not approve of the revised price lists and the assessments were continued to be made by the respondent as before without authority of law.;