Calcutta High Court
Jenson And Nicholson (India) Ltd. And ... vs Union Of India (Uoi) And Ors. on 15 January, 1990
Equivalent citations: 1990(30)ECR87(CALCUTTA)
JUDGMENT S. Chatterjee, J.
1. The present writ petition was moved on 7.5.1985. An interim order was passed by Bhagabati Prosad Banerjee, J. in terms of prayer (a) of the writ petition on condition that the petitioner will deposit a sum of Rs. 1 lac by Monday next as stated in the order before the respondents and it was made clear that the respondents would be at liberty to process and finalise the price-lists which have been submitted by the petitioner subject to the result of the writ application. It appears further that the petitioner No. 1 Company under the Companies Act and the petitioner No. 2 being its nominee director manufactured paints and varnishes at its factory at Naihati in the District of 24-Parganas. The petitioner have prayed inter alia for a writ in the nature of mandamus commanding the respondents to cancel and/ or withdraw two show cause-cum-demand notices, the bearing No. C, CE-13/R-V1/BKP/84/1503 dated 17.12.1984 and other bearing No. CE-13/R-V1/BKJP/84/8 dated 1.1.1985 and one show cause notice bearing No. CE-l3/R-Vl/BKP/85/391 dated 27.3.1985 all issued by the respondent No. 4 Superintendent of Central Excise, Range-VI, Barrackpore Division and also to command the respondents to dispose of the revised price-lists that are lying pending with the respondents and to restrain them to take steps to recover any alleged demand of differential Central Excise Duty in respect of the period from 18.6.1977 to 21.8.1983 for which all the price-lists excepting price-list No 1/PV and price-list No. 93/PV are pending decision and/or approval before the respondent No. 3, the Assistant Collector of Central Excise, Barrackpore Division and the respondent No. 4 Superintendent of Central Excise, Barrackpore Division and for other consequential reliefs on the ground that there is clear non-application of mind on the part of the respondent Nos. 3 and 4 when the show cause-cum-demand notices dated 17.12.1984 and 1.1.1985 respectively have issued to the petitioners. It is stated in details since the question involved in respect of the alleged demand of Rs. 31,81, 647.64 p. and the alleged demand of Rs. 1,88,25, 290.02 p. is one and identical in all respects and since there has been no adjudication of direction as directed by this Court in C.R. No. 12398 (W) of 1980 the respondents have no competence, jurisdiction and/or authority to call upon the petitioner company to pay the aforesaid alleged demand and/or to show cause about the payment of aforesaid demands. It is placed on record that in view of the fact that the original price-lists, almost all of them are pending before the respondent No. 3 the Assistant Collector of Central Excise, Barrackpore Division and that the revised price-lists have been filed in response to the request of the department and all of them are pending for disposal. It is alleged that in spite of directions given in C.R. No. 12398 (W) of 1980 to decide the dispute in the light of the decision of the Hon'ble Supreme Court, the respondent Nos. 3 and 4 ought not to have issued the aforesaid two show cause-cum-demand notices in the manner as done in the present case. The specific case of the petitioner Company is that so long as the revised price-lists are not decided in accordance with law there is no warrant and legal action on the respondent Nos. 3 and 4 to proceed against the petitioner Company for recovery of any Central Excise duty in respect of the period from 18.6.1977 to 21.8.1983 for which the revised price-lists are ponding before the respondent No. 3. Elaborately in details, the petitioner Company has stated that the alleged demands arising out of the period covered under the price-list No. 1/PV dated 1.12.1977 and 93/PV dated 24.7.1978 is pending before the respondent No. 4 alongwith application for stay thereabout, and, as such, it was improper, arbitrary and without jurisdiction on the part of the respondent Nos. 3 and 4 to call upon the petitioner Company to pay the alleged demand and/or to show cause about the payment of the aforesaid demands The petitioner Company has also challenged the decision in the appeal under Order dated 31.7.1984 in respect of the price-list No. 1/PV and 93/PV as prejudicial against the petitioner company in Complete defiance of the ratio of the decision of the Hon'ble Supreme Court.
2. The writ petition is strongly contested by the respondent Nos. 1, 2, 3 and 4 by tiling affidavit-in-opposition sworn by the Assistant Collector of Central Excise, Barrackpore Division. It is disclosed in the said affidavit that the petitioner Company has adequate alternative remedy and without exhausting the alternative remedy, the petitioner Company ought not to have rushed to the Writ Court for reliefs. It is disclosed that the assessable value of excisable goods has to be determined in terms of Section 4 of the Central Excises & Salt Act and/or Rules framed thereunder as laid down by the Hon'ble Supreme Court in the case of Union of India v. Bombay Tyres International 1983 ECR 1627 D (S.C.). The post-manufacturing expenses is not liable to be deducted from the wholesale cash price and since the assessee sells its product through sales depots in different regions in India, the normal price is liable to be determined in terms of Section 4(2) of the Central Excise Act. The assessee submitted the price-list in Part-I though they do not sell its product at the factory gate. It is transpired that the assessee has no wholesale dealer. Their goods further appeared to have been sold at different prices. On or about 19.6.1977 the assessee filed the price-lists effective on 30.7.1977 where there is no claim for deduction. The said case was adjudicated under adjudication order No. 10/78 dated 6.12.1978. The respondents have denied that the petitioner Company is entitled to deductions in the manner as alleged and since 1987 the writ petitioners have deliberately been withholding payment of excise duty amounting to huge amount. It is also placed on record that by an order dated 28.1.1987 the Collector (Appeals) has finally disposed of the appeal of the writ petitioner and as such the instant writ petition has become infructuous. The petitioners' remedy, if any, lies to the forum provided under the Act.
3. The petitioner Company has, however, filed an affidavit-in-reply controverting the allegations of the respondents and reiterated the stand taken in the impugned writ petition.
4. After going through the materials on record and pleadings of both the parties, it appears that the petitioners filed various price-lists for approval of the Proper Officer under Rule 173C determining the assessable value only on manufacturing cost and manufacturing profit by deducting from the wholesale price by two orders. The Proper Officer approved the price-list without making any deduction from the wholesale price by the first order and secondly by allowing some deductions from the wholesale price by the second order. The petitioner Company preferred an appeal before the Collector (Appeals) against the said two orders. There is no stay order. Secondly, the petitioner moved the first writ petition and obtained an interim order whereunder they went on removing the goods on the basis of the assessable value determined both on the basis of manufacturing cost and manufacturing profit the said writ petition is, however, disposed of directing the Collector (Appeals) to determine the assessable value in accordance with the judgment of the Hon'ble Supreme Court in the case of Union of India v. Bombay Tyres (International) . The Collector (Appeals) disposed of the appeal on 31.7.1984. The petitioner Company, however, submitted Chartered Accountants' certificate in regard to the break up of post-manufacturing expenses. Thereafter, the impugned notices dated 17.12.1984 and 1.1.1985 have issued under Section 11A read with Rule 9 (2) calling upon the petitioner to show cause as to why they would not be required to pay an aggregate sum of Rs. 2,20,00,000/- as differential duty. The said show cause notice was duly replied by the petitioner. A personal hearing was allowed on 27.2.1985 which was duly attended and the petitioner also filed a writ application. The petitioner in the meantime submitted various revised price-lists claiming deductions for the first time under different heads. A Show Cause Notice was issued calling upon the petitioner to explain why the deduction claimed by them in the revised price-lists should not be rejected. The petitioner replied to the said Show Cause Notice also. The petitioner preferred an appeal against the order of Collector (Appeals) dated 31.7.1984 and also filed a stay petition. The instant writ petition was moved on 7th May, 1985 and interim order was obtained.
5. Mr. Sanjay Bhattacharya, the Learned Counsel appearing for the petitioner has strongly argued that price-lists and/or revised price-lists submitted by the petitioner to the Central Excise Department under Rule 173C of the Central Excise Rules have been kept pending since long. No reasons have been given by the respondents as to why the price-lists were not attended to and/or disposed of. During the pendency of the case, the Hon'ble Supreme Court has delivered judgment in the case of Assistant Collector of Central Excise v. M.R.F. Limited reported in 1987 S.C. Page 701 and the petitioners are entitled to the benefits towards their claim made before the respondent No. 3. If the price-lists and/or supplementary price-lists are considered and the test laid down in the case of Union of India v. Bombay Tyres International reported in 1984 S.C. Page 420 are applied. The petitioners are entitled to reliefs in the manner as prayed for in the writ petition. Mr. Bhattacharya has also drawn the attention of the Court to the decision reported in 1974 (34) S.T. Cases, P. 30 1977 STC, Page 333, 1983 ELT, Page 203 : 1987 (11) ECR 147 and also 1978 ELT, Page 229. 1978 Cen-Cus 39 D.
6. Mr. Jatin Ghosh, the Learned Counsel appearing for the respondent authorities has taken this Court in details to various averments made in the writ petition, the Affidavit-in-Opposition and Affidavit-in-Reply and he has submitted that the steps taken by the respondent authorities are not contrary to the provisions of law. The allegations made by the writ petitioner are not justified. The Department may well be directed to consider the matter again if this Court directs in the light of the judgment made in Union of India v. Bombay Tyres International The Assistant Collector of Central Excise v. M.R.P. Limited.
7. Having heard the learned lawyers of both sides, this Court finds that the previous writ petition was disposed of directing the Collector (Appeals) to determine the assessable value in accordance with judgment of the Hon'ble Supreme Court in the case of Union of India v. Bombay Tyres International, The Collector (Appeals) disposed of the appeal upon giving hearing to the petitioner. Thereafter, two show cause-cum-demand notices were issued under Section 11A read with Rule 9(2) calling upon the petitioner to show cause as to why the petitioners would not be required to pay an aggregate sum of Rs. 2,20,00,000/- as differential duty. The said show cause-cum-demand notices were duly replied by the petitioners. A personal hearing was allowed on 21.2.1985 which was duly attended and the petitioner filed a written submission. There in the meantime, the petitioner submitted various price-lists claiming deduction for the first time under the different heads. On 27th March, 1985 a show cause notice was issued calling upon the respondents to explain as to why the deduction claimed by them in the revised price-lists should not be rejected. The petitioner replied to the said show cause notice and preferred an appeal against the order of the learned Collector (Appeals) dated 31.7.1984 and filed a stay application. These steps were taken on 5th of April, 1985 and thereafter the present writ petition was filed on May, 1985. Thus looking to the materials on, this Court is of the clear view that the respondents have clearly considered the case of Bombay Tyres International in the proper perspective and the petitioner cannot make any grievances by filing revised price-lists subsequently. Even then the petitioners have been given opportunities to show cause as to why the revised price-lists would not be rejected. The matter will be considered by the departments in accordance with law but without waiting for the adjudication the petitioners have abruptly come to this Court and by depositing Rs. 1 lakh only stayed the proceedings to recover the duties over Rs. 2,20,00,000/-. The petitioner is found enjoying the interim order since 1985. This Court has also found that the Hon'ble Supreme Court is in decision of the matter to review of the judgment of the case of The Assistant Collector of Central Excise v. MRF Limited. The petitioner will certainly be heard and the objections will be considered against the proposal to reject the price-lists. The disposal of the present writ petition will not prevent either the petitioner to raise necessary objections and the respondent authorities to consider the objections strictly according to law in view of the latest judgment of the Hon'ble Supreme Court as well as other Hon'ble High Courts in this regard according to law but the grievance as made out by the petitioner in the present case has no merit. I
8. For the foregoing reasons, the writ petition fails and hence it is rejected. All interim orders are vacated. There will be no order as to costs.