PATEL PRABHUDAS PURSHOTTAMDAS Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners manufacture chewing tobacco at Sholapur. They are liable to excise in respect thereof under item 4(II) 5 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act).

(2.) On 29th September, 1975 a price list furnished by the petitioners was approved by the Assistant Collector of Central Excise, Sholapur. On 10th March, 1976 the Superintendent, Central Excise, Sholapur, wrote to the petitioners that the said price list, originally approved under the category of price not exceeding Rs. 10.00 per kg., had been revised and approved under the category of price exceeding Rs. 10.00 per kg. effective from 1st October, 1975. The letter stated that the reasons for revising the assessable value and rate of duty were that, on scrutiny and investigation, it had been ascertained that gross weight had been considered instead of net weight and the price of the gunny bag had not been included. It may be noted in this connection that under a notification dated 1st March, 1975 issued under the Central Excise Rules, 1944, tobacco falling under Item 4(II)5 of the First Schedule to the Act of which the value did not exceed Rs. 10.00 per kilogram was exempted from so much of excise duty leviable thereon as was in excess of 5% ad valorem.

(3.) On 12th March, 1976 the excise authorities wrote to the petitioners demanding the difference in excise duty on the basis of the revised price list from 1st October, 1975 onwards. The petitioners preferred an appeal against the order revising the price list. After hearing the petitioners the Appellate Collector observed