TEXTOOL CO. LTD. Vs. UOI AND ORS.

JUDGEMENT

(1.) IN W.P. 1326 of 1992, the petitioner has sought for quashing the orders dated 28.10.1991 passed by the Additional Collector of Customs and Central Excise, Coimbatore, whereas in Writ Petition 1327 of 1992, the very same petitioner has sought for quashing the circular issued by the Central Board of Excise & Customs dated 13.6.1990. The validity of the said circular is considered by us in Writ Appeal 742 of 1991 and other connected writ petitions decided today. Following the judgment of the Supreme Court in Metal Box India Ltd. v. Collector of Central Excise, Madras (1995 (56) ECR 625 (SC) : 1995 (75) ELT 449), we have quashed the circular, as the same is opposed to the aforesaid decision of the Supreme Court. The impugned order has been passed after the said circular is issued and pursuant thereto. As already pointed out in our decision in Writ Appeal 742 of 1991 referred to above, the Central Board of Excise & Customs has clearly directed that the Authorities need not establish the nexus between the interest free deposit and the price at which the goods are sold to those who have advanced the interest free loan. As to under what circumstances and in what manner the benefit that is accrued to the manufacturer by reason of obtaining the interest free advances has to be determined and the extent of benefit the manufacturer has drawn, to be taken into account while determining the value of goods, has been discussed in paragraphs 10 and 11 of the aforesaid judgment of the Supreme Court and it has been ultimately held that to the separate price charged, the extent of benefit obtained by the assessee from the interest free loan alone has to be re -loaded by hiking the price charged. That being so, in each case, depending upon the facts and circumstances of the case, the amount of interest free loan obtained by the manufacturer and to the extent it has benefited the manufacturer are to be considered and that benefit has to be added to the price at which the goods are sold by the manufacturer to the purchaser who has advanced interest free loan. Therefore, it is not possible to decided the case without going into the facts of each case by simply applying the principle laid down in the aforesaid decision of the Supreme Court in Metal Box India Ltd. That being so, the order passed by the Additional Collector of Customs and Central Excise, which has not proceeded on the lines indicated above has to be necessarily quashed. The matter has to be remitted for fresh consideration in the light of the Supreme Court decision in Metal Box India and also in the light of the observations made by us in this order.

(2.) WE , accordingly, allow these writ petitions in the following terms: - -