TATA ENGINEERING AND LOCOMOTIVE CO LTD Vs. S N GUHA THAKURTA SUPERINTENDENT OF CENTRAL EXCISE

JUDGEMENT

(1.) In this writ application the petitioner has prayed for quashing the order, dated the 1st of October, 1975 of the Assistant Collector of Central Excise, Jamshedpur (respondent No.2), asking the petitioner to furnish price lists in Part IV of the Proforma treating the Regional Sales Offices of the petitioner as "related persons" (Annexure 2) as also to quash his orders on various price lists (Annexure 5 series) refusing the petitioner's claim for deduction of post manufacturing cost for purpose of finding out the assessable value under Section 4 of the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act"). The petitioner has also prayed for issuance of necessary directions to the respondents to treat the wholesale cash price ex-works at Jamshedpur as the value for levying excise duty and to refund the excess amount realised as excise duty with effect from the 1st October, 1975, in respect of vehicles by the Regional Sales Offices.

(2.) The petitioner is well-known Tata Engineering and Locomotive Company Limited, a company registered under the Indian Companies Act, having its factory at Jamshedpur for manufacturing commercial motor vehicles and carrying on business. The petitioner sells vehicles to its dealers. Government, State Transport Undertakings, the Director General of Supplies and Disposals including Army and various industrial units as well as a few miscellaneous parties (customers). The petitioner also clears vehicles for sale to its various Regional Sales Offices with which we are concerned in this writ petition. Section 3 of the Act provides for levy and collection of excise duty, in such manner as may be prescribed on all excisable goods which are produced or manufactured in India at the rates set forth in the First Schedule, to the Act. In accordance with the rates set forth in the First Schedule, excise duty on the motor vehicles manufactured by the petitioner company is payable at the rate of twelve and half per cent ad valorem as mentioned under Item No. 34. Section 4 of the Act, as amended and in force from the 1st October, 1975 provides for valuation of the excisable goods for the purpose of charging excise duty, the relevant portion of which will be quoted hereinafter. In substance it provides that where excise duty is chargeable on any excisable goods with reference to value, such value shall be deemed to be the price at which such goods are ordinarly sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the assessee and the buyer have no interest directly or indirectly in the business of each other and the price is the sole consideration for the sale. This is called to be the normal price.

(3.) As required by the first respondent on the 15th September, 1975, the petitioner submitted a price list of motor vehicles effectively from the 1st October, 1975, the date of enforcement of amended Section 4, with a covering letter of the even date (Annexure 1). In the letter the petitioner stated that from its factory at Jamshedpur, it sells motor vehicles to its dealers, Government parties, transport undertakings, the Director General of Supplies and disposals including Army and various industrial units as well as a few miscellaneous parties (customers). The petitioner also stated that on payment of excise duty, it cleared motor vehicles from the Jamshedpur works to its Regional Sales Offices, which are twenty-one in number, and dealers in Nepal and for export. By a letter dated the 1st October, 1975, respondent No. 2 approved the price list in respect of the class of buyers mentioned in the petitioner's letter, but stated that the price list in respect of different Regional Sales Offices should be submitted in Part IV of the Proforma relating to sales to or through "related persons". It was also stated that for day to day work, the price lists in respect of the regional sales offices were approved, subject to the condition that fresh price lists in Part IV of the Proforma were submitted on or before the 20th October, 1975 (Annexure 2).