Karnataka High Court
H And R Johnson (India) Ltd. vs Central Board Of Excise And Customs on 23 February, 1998
Equivalent citations: 1998(101)ELT252(KAR)
JUDGMENT V.P. Mohan Kumar, J.
1. The petitioner has certain excise liability. The practice seems to be that the customers are allowed discount in the payment in the event of prompt payment of the amount due from them: but certain customers do not make prompt payment resulting in they being denied the discount.The Department took the stand that irrespective of the fact that in the case of those who did not avail the discount benefit, excise duty should be taxed on the whole amount. This stand of the Department was challenged by the petitioner before the Appellate Authority and by Annexure-A Order dated 10-4-1992, the Appellate Authority upheld the claim of the petitioner and declared that duty is payable with respect to the discounted value of goods irrespective of the fact whether the customers have availed the discount benefit or not. It held that the petitioner would be liable to pay customs duty only on the discounted price of the articles. Annexure-A is the order passed by the Appellate Authority in this behalf. The Appellate Authority stated thus:
"It is thus clear that the discount was available to those who are interested in availing this discount and it was also known at the time of the sales of the goods as an endorsement is made in the invoice itself. I, therefore, set aside the impugned order and allow this appeal with the direction that the pricelists in question be approved by allowing the cash deduction of 1.75% claimed in the pricelist."
2. This order was again followed by similar pattern of assessment made by the authorities. There also the petitioner's contention was upheld by the order dated 30-4-1997. It was held that the petitioner is liable to pay excise duty on the discounted price. Annexure B is the said order and that order is also in force. It is to be noted that these orders are passed following the principles laid down by the Bombay High Court in Goodlass Nerolac Paints Ltd. v. Union of India reported in 1993 (65) E.L.T. 186 (Bom.). It appears, the order of the Bombay High Court was challenged before the Supreme Court in appeal and the Supreme Court dismissed the S.L.P. confirming the order of the Bombay High Court and the dismissal, I am informed, is on merits. Thus, the claim of the petitioner seems to have been upheld by the Bombay High Court and affirmed by the Supreme Court in 1994 (73) E.L.T. A58.
3. It is averred by the petitioner's counsel that despite the judgment of the Bombay High Court as well as the Supreme Court, the respondents are persistently issuing show cause notices demanding the petitioner to pay the excise duty on the goods for which discount has not been availed of by the customers. Annexures-E and F are two such notices. I am informed by the petitioner's counsel that the petitioner has submitted his reply. This reply has not been produced. But the learned Counsel states that the reply has been submitted as a matter of fact. The grievance of the petitioner in these proceedings is that in view of the levy being declared illegal by the Appellate Authority by Annexures A and B orders and such view being in consonance with the decisions of the Bombay High Court and the Supreme Court, the respondents are not entitled to make any such demand afresh.
4. Smt. Shireen Zafrullah, learned Central Government Standing Counsel for the respondents, submits that they intend to challenge Annexures A and B orders. I do not know whether any appeal has been filed and whether it is within the statutory period of limitation. That is a different issue. As it is, now the Department is bound by Annexures A and B orders and also the judgments of the Bombay High Court and the Supreme Court. In view of the circumstance that the Department is bound by the findings of the Appellate Authority evidenced by Annexures A and B orders and also the judgment of the Bombay High Court and confirmed by the Supreme Court, any decision to be taken on Annexures E and F notices to which the petitioner submitted his reply, shall be in consonance with the decision of the Appellate Authority evidenced by Annexures A and B. The respondents shall adhere to the findings of the Appellate Authority evidenced by Annexures A and B and also keep in mind the decision of the Bombay High Court as well as the decision of the Supreme Court confirming the decision of the Bombay High Court, while dealing with the objection filed by the petitioner. A final decision on Annexures E and F shall be taken in consonance with the findings of the Appellate Authority evidenced by Annexures A and B and the decisions of the Bombay High Court and the Supreme Court. With the above direction, the writ petitions are disposed of.