UNION OF INDIA Vs. CENTURY MANUFACTURING COMPANY LIMITED

JUDGEMENT

(1.) These two appeals under the Central Excises and Salt Act, 1944 (hereinafter referred to as'the Act) raise an interesting question as to the vires and interpretation of S. 3(2) of the Act. Under that provision, the Central Government issued notifications dated 28-11-1970 and 26-7-1971 fixed the tariff value on the basis of which excise duty was to be levied on sulphuric acid and liquid chlorine respectively. In respect of the former, the tariff value fixed was Rs. 260 per metric tonne where the strength of the acid was 93% to 99% and a proportionately lower figure where 'the strength of the acid was less. The tariff value for chlorine was fixed at Rs. 500 per metric tonne.

(2.) It is necessary to set out the provisions of Ss. 3 and 4 of the Act, as they stood at the relevant time, to enable a proper understanding of the issue raised. They read thus:

(3.) The effect of these two sections read with the definition in S. 2(d) of, and the First Schedule to, the Act may be summarised ;ins:Excise duty is charged on all goods specified in the First Schedule to the Act. It is a duty on such goods produced or manufactured in India. It is levied at the rates specified in the First Schedule. These rates are carged in some cases on the basis of length, area, volume and weight but, in most cases, the rate is ad volorem i.e. dependent on the value of the goods. We are concerned here with the last of these modes of rate fixation where the rate is applied to the value. Naturally, in such cases, the crucial question is:What is the value of the goods to which the rate is to be applied This question is answered in two ways. S. 3(2) empowers the Central Government, in such cases, to fix the tariff value by Gazette notifications issued from time to time. S. 4 empowers the assessing authority to determine the value of the excisable goods in individual cases on the basis of the wholesale cash price for which the goods are sold at the factory gate: