Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Begalkot Udyog Ltd. on 10 August, 1987
Equivalent citations: 1989(41)ELT647(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. This is an appeal filed by the Collector of Central Excise, Belgaum. Issue involved herein is whether the cost of gunny bags for packing cement is includible in determining the assessable value of cement for the purpose of charging duty of excise on for cement in terms of Section 4 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) or not.
2. Learned JDR Shri Chakrabarti has fairly conceded in the beginning that this issue has been examined by a Bench of 5 members of the Tribunal in the case of As-sociated Cement Companies Ltd., Jabalpur and Ors. v. Collector of Central Excise, Indore and Ors. [1987 (27) ELT 746 (Tri.)] and the said judgment goes against the appellant-Collector. He has, however, stated that the said judgment of the Tribunal takes into account Cement Control Order passed by the competent authority under the Essential Commodities Act. For the purpose of determining the value in terms of the relevant provisions of the Act support of any other Act or any order passed under any other Act should not be taken into account. This according to the learned JDR has been held so by the Hon'ble Supreme Court itself in the case of Delhi Cloth & General Mills Company Ltd. v. Union of India and Ors. [1986 (24) ELT 175 (S.C.)].
2A. Learned Advocate for the respondents has, however, stated that the judgment of the 5 Member Bench of the Tribunal mentioned supra clinches the issue in respondents' favour. That judgment of the Tribunal also relies upon a judgment of the Karnataka High Court in the case of the respondents' company itself and therefore, the appeal according to the learned Advocate should be dismissed.
3. We have carefully considered the pleas advanced on both sides. We are unable to agree with the learned JDR that the Hon'ble Supreme Court's judgment in the case aiDCM Co. Ltd. referred to by him would apply in the instant case. Question before the Hon'ble Supreme Court in that case was whether a maximum price fixed under a notification issued under the Essential Commodities Act, 1955 would form the basis for determining the value of excisable goods under Section 4 of the Act or not before the amendment of Section 4 of the Act i.e. 1-10-85. It has been held by the Hon'ble Supreme Court that the notification under the Essential Commodities Act would not form the basis of valuation of the excisable goods under old Section 4 of the Act.
4. In the instant case the Tribunal in the aforesaid judgment in the case of Associated Cement Companies Ltd. does not rely on any fact of fixation of a maximum price under the Cement Control Order. What the judgment relies upon is that under the Cement Control Order, the purchaser was bound statutorily to return the gunny bags to the manufacturer either directly or through the latter 'collection agent' and get a refund of the cost of gunny bags fixed by the said Cement Control Order. It was, therefore, held by the Tribunal, relying on judgments of three High Courts, namely of Madhya Pradesh, Andhra Pradesh and Karnataka that this statutory binding between the parties must be treated as an arrangement between the seller and the buyer for return of the gunny bags thereby rendering them as returnable in terms of Clause 4(4)(d)(i) of the Act. We are in agreement with the learned Advocate for the respondents company that following judgment of the Tribunal in 1987 (27) ELT 746 the appeal deserves to be dismissed. Accordingly, we Histnks the appeal