SUBBARAYAN Vs. UNION OF INDIA

JUDGEMENT

(1.) THE appeal is from an order of Ramprasada Rao, J. dismissing a batch of petitions under Article 226 of the Constitution. We are concerned with only one of them. THE appellant questions the legal propriety of the tariff values notified under Section 3(2) of Central Excises and Salt , 1944, as not being in accord with Section 4. THE appellant is the Managing Director of the South India Sugar and Steels Limited, Madras, which pays every year a large amount by way of excise duty on sugar manufactured and sold by it.

(2.) SUGAR under Item 1 of the First Schedule to the Act is chargeable to excise duty in terms of Section 3 which is the charging section. It says that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods produced or manufactured in India at the rates set forth in the First Schedule. The rates of course are settled every year by the relative Finance Act as indicated in column 3 of the first item of the First Schedule. The duty is levied and collected on the manufacture of sugarad valoremand at the rate obtaining for the specific year of charge. Sub-section (2) of Section 3 empowers the Central Government to fix, by notification in the Official Gazette, for the purpose of levying excise duty, tariff values enumerated in the First Schedule as chargeable to dutyad valoremand alter any tariff values for the time being in force. Determination of values for the purpose of duty is done under Section 4 which applies to any article chargeable to duty at the rate dependent on the value of the Article. Section 4 is as follows :-

(3.) IT being clear from the statement in the counter affidavit that the tariff values notified under Section 3(2) of the Central Excises and Salt Act, 1944 were based on the average realisation by sugar factories in the country during a given period and were approximately close to the average actual all India prices. IT is pressed upon us for the appellant that such fixation of tariff values for free sugar is contrary to Section 4.