K. C. AGRAWAL, C. J. - (1.) THIS petition under Article 226 of the Constitution has been filed by Central India Machinery Manufacturing Limited (for short CIMMCO) challenging the validity of the following five show cause notices issued by the Superintendent, Central Excise, Bharatpur. (i) Show cause notice no. l/ro/bhp/79/2377, dated December 19, 1979 for the period for March 1, 1975 to December 19, 1979 (ii) Show cause notice no. I/ro/bhp/81/764, dated June 25, 1981 for the period from December 20, 1979 to March 31, 1981. (iii) Show cause notice no. l/ro/bhp/81/1104, dated September 30, 1981 for the period from April 1, 1981 to September 30, 1981. (iv) Show cause notice no. l/ro/bhp/81/252, dated February 17, 1982 for the period from October 1, 1981 to January 31, 1982; and (v) Show cause notice no. 20/24/cimmco/78/1038, dated July 12/13, 1982 for the period from February 1, 1982 to June 30, 1982.
(2.) THE petitioner, apart from challenging the validity of the notices aforesaid, has also sought the relief of mandamus directing the respondents nos. 1,2 and 3 not to levy or collect any duty or excise in respect of wagons supplied to the Railway Board and the Union of India, respondents nos. 5 and 6 respectively. The petitioner no. 1 is a company corporate under the Companies Act, 1956 and carries on the business of manufacturing and dealing in wagons, structurals, various items textile machinery and similar other items. This writ petition relates to wagons manufactured by (CIMMCO, which are delivered to respondents nos. 5 and 6. Prior to March 1, 1975 wagons were not excisable goods within the meaning of the said Act and no excise duty was leviable on the manufacture of wagons from March 1, 1975. Item no. 68 was introduced in the First Schedule, as a result whereof wagon became excisable goods. Under the contract respondents nos. 5 and 6 were bound to supply free of cost certain items of raw-material and components for the fabrication of wagon. These materials are mentioned below :- i - Wheel Sets ii - Roller Bearing Axle Boxes iii - Centre Buffer Couplers iv - Cast steel Bogie Bolsters v - Air Brakes vi - Cast Steel Bogie Assemblies. These items received by CIMMCO free of cost from Railway Board and Union of India were the property of Railway Board and that CIMMCO held the same in trust. In respect of these items CIMMCO do not incur any cost and consequent in calculating or computing the price of wagons these items are excluded. The invoice price included the full amount received by CIMMCO from the Railway Board for the fabrication and delivery of wagons, but did not include the value of cost of items received free of cost from the said Board. Respondents nos. 1, 2 and 3 directed CIMMCO to furnish the value and/or costs of the items received by CIMMCO free of cost from the Railways Board. CIMMCO had no knowledge of the value and/or costs of the said items. CIMMCO repeatedly requested the Railway Board and respondent no. 6 to furnish the said value and/or costs so that the same be furnished to respondents nos. 1,2 and 3. But neither the Railway Board nor the Union of India has furnished the same, as a result whereof CIMMCO was unable to comply with the demand of respondents nos. 1,2 and 3 for the value and/or costs of the items supplied to CIMMCO. As the said respondents nos. 1, 2 and 3 were not permitting clearance of wagons fabricated by the petitioner for and on behalf of the respondents 5 & 6, the petitioner filed this writ petition alleging that the respondents could not include in the value of wagons for the assessment of duties of excise which were received by CIMMCO free of costs from the Railway Board and Union of India, CIMMCO, therefore, filed the writ petitions challenging the five notices mentioned above and have claimed that the respondents 1, 2 and 3 could not restrict the clearance of wagons on the ground on which they purported to do so.
(3.) THE writ petition has been contested by the Excise Department on the ground that the petitioner was obliged under the law to produce evidence before the excise authorities to show the value of the wagons at which they were being sold. THE burden to prove the same was on the petitioner. Since CIMMCO did not furnish any material about the valuation of the railway wagons, therefore, show cause notices were issued to CIMMCO. CIMMCO, however, kept, quite therefore after taking various factors and data into consideration and calculation it gave tentative valuation to which CIMMCO was expected to submit their own reply and to give valuation according to them. Counsel for CIMMCO drew our attention to the reply given in the written petition as well as to the letter dated 11. 5. 1981 sent by the Railway Board. The argument raised on behalf of the petitioner counsel was that the respondents nos. 1, 2 and 3 did not dispute the free supply of items mentioned in paragraph 6 of the writ petition, the details of which have been given above, and, as such, the High Court should issue a direction to the respondent nos. 1,2 and 3 to exclude or deduct the price of those items in arriving at the price at which excise duty was leviable. Section 4 of the Central Excise & Salt Act provides for determination of value for the purpose of charging duty of excise under the Act. The valuation has to be filed in accordance with the said section and rules framed thereunder, This section has been interpreted by the Supreme Court recently in two decisions reported in M/s Ujagar Prints & Ors. V Union of India & Ors. (1) and M/s Ujagar Prints & Ors, V Union of India & Ors. (2 ). Counsel appearing for the respondents nos. 1, 2 and 3 urged that job work also had to be included for finding out the excisable value. Even if it was correct that items mentioned in paragraph no. 6 of the writ petition were received free of charge, what is important to be established is the determination of valuation of excisable goods for purposes of charging duty of excise in accordance with Section 4 of the Central Excise Act. The relevant portion of Section 4 (1) of the Act is quoted below :- Section 4 (1) - Where under this Act, the duty of excise is chargeable on, any excisable goods with reference to value, such value, shall, subject to the other provisions of this section, be deemed to be- (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale. " ;