- (1.) Heard learned counsel for the parties. The petitioner has challenged the Trade Notice No. 19/96 dated 24th July, 1996 issued by Commissioner of Central Excise & Customs, Jamshedpur, by which it has been declared that duty is required to be paid by the assessee at the time of clearance of goods from factory gate even for those goods which are sold through depot and the duty shall be levied at the price declared at depot. The petitioner has also challenged the vires of Section 4(4)(b)(iii) inserted by Section 74 of the Finance Act, 1996 as illegal and ultra vires of Entry 84 of List-I of Seventh Schedule of Constitution as, according to the petitioner, the said Entry No. 84 authorizes and gives power for levy of imposition of duty on goods manufactured or produced in India and on the basis of said Entry. It has been contended that said provision is ultra vires of the charging Section i.e., Section 3 of the Act.
(2.) The brief facts of the case are that, the petitioner is having its factory at Chandil and is manufacturing sponge iron, which is excisable commodity under Central Excise Act. 1944. Section 3 of the Act of 1944 is charging Section and Section 4 provides for quantification and declares the liability for payment of the excise duty and mode of calculating the excise duty. According to the learned counsel for the petitioner, as per sub-section (2) of Section 4, the excise duty cannot be levied on the goods on transportation from the place of removal to the place of delivery, which has been made explicitly clear by the Hon'ble Supreme Court in the detailed judgment delivered in the case of Union of India & Ors. vs. Bombay Tyre International Ltd. & Ors., 1984 1 SCC 467. The Central Excise Act was amended by the Finance Act, 1996, whereby no amendment was made in Section 4(2) of the Act of 1944 but Clause (i-a) was inserted after clause (i) under sub-clause (a) of sub-section (1) of Section 4, whereby, by deeming clause, it has been provided that where the price at which such goods are ordinarily sold by the assessee is different for different places of removal, each other price shall subject to the existence of other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such place of removal. According to the learned counsel for the petitioner, it appears that by misinterpreting this clause and assuming it to be extension of the definition of place where the excise duty can be levied in addition to the gate of the factory premises, impugned notification dated 24th July, 1996 may have been issued, declaring that by virtue of this amendment the assessee shall be required to pay the excise duty of freight charges, as now the factory gate is not the actual place of removal and since the definition of the place of charging has been extended to the depot also, therefore, excise duty will be price of the goods at depot.
(3.) The learned counsel for the petitioner submitted that the Hon'ble Supreme Court in the case of Union of India vs. Bombay Tyre International Ltd. considered various aspects of the matter, including the scope and definition of the transportation charges to the depot and thereafter held that assessee is entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold and further held that where freight is averaged and the averaged freight is included in the wholesale cash price so that the wholesale cash price at any place or places outside the factory gate is the same as the wholesale cash price at the factory gate, the averaged freight included in such wholesale cash price has to be deducted in order to arrive at the real wholesale cash price at the factory gate and no excise duty can be charged on it. However, after the amendment referred above, the matter came up before the Hon'ble Supreme Court in the case of VIP Industries Ltd. vs. Commissioner of Customs & Central Excise Aurangabad, 2003 5 SCC 507, wherein specific issue of effect of amendment and enlargement of the definition of the place for charging excise duty itself was under consideration and Hon'ble Supreme Court held that in spite of newly added proviso (i-a) to Section 4(1)(a), the position remains as it is as it was prevailing prior to the amendment and rejected the Revenue's contention of inclusion of the freight charges, charged upto the depot. Therefore, according to the learned counsel for the petitioner, though the petitioner challenged the vires of the amendment itself but in view of the judgment of the Hon'ble Supreme Court which was subsequently delivered, subsequent to the filing of the writ application, the writ petition is liable to be allowed as issue is no more res integra, in view of the Hon'ble Supreme Court judgment.;