HINDALCO INDUSTRIES LTD Vs. COMMISSIONER OF C EXCISE

JUDGEMENT

(1.) The petitioner - a Company incorporated under the Companies Act, 1956 carrying on business of manufacture of Aluminium and its products, seeks quashing of the impugned show cause notice dated 30-6-1995 (Annexure '2' to the writ petition). By the said notice, the petitioner was called upon to show cause within thirty days from the date of its receipt as to why a sum of Rs. 45,98,05,073.38p. be not recovered from it under Sub-section (1) of Section 11A of the Central Excises and Salt Act, 1944 (briefly, the Act) and why penalty should not be imposed upon it under Rule 173C of the Central Excise Rules, 1944 (for short, the Rules) for contravening the provisions of the various rules.

(2.) The contention of the petitioner is that by the impugned show cause Notice, respondent No. 1 has called upon the petitioner to furnish wholly irrelevant details and that the notice is based on wholly irrelevant considerations. It is contended that under Section 4 of the Act which is a charging section, the duty of excise is chargeable on excisable goods with reference to value and that such value under Clause (a) of Sub-section (1) of Section 4 shall subject to the other provisions of this section be deemed to be the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale. Referring to Section 4, learned counsel for the petitioner urged that the excise authorities to levy excise duty can inquire into the normal price of the goods cleared by the petitioner and that all other inquiries by means of the impugned show cause notice are irrelevant, baseless and arbitrary.

(3.) No doubt, exise duty is chargeable on any excisable goods with reference to value thereof which under Clause (a) of Sub-section (1) of Section 4 of the Act shall be deemed to be the normal price thereof, that is, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of a wholesale trade. In nutshell, excise duty will be charged on wholesale price of the goods cleared. For levying the excise duty, the excise authorities are required to determine as to whether a given assessee has truly and correctly disclosed the goods which have been cleared and the wholesale price thereof.