RAYMOND WOOLLEN MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) BY this Petition, the Petitioners are challenging the orders passed on 16-3-1984 and 27-7-1988 by the Assistant Collector of Central Excise, Thane, partly rejecting the petitioners' claim in respect of the abatement of certain items of expenditure on the ground that they are the post-manufacturing expenses. The first petitioner is a manufacturer of man-made and woollen fabrics falling under Tariff Items Nos. 21 and 22. By their letter dated 18th March, 1991, the petitioner-Assessee claimed refund on the ground that the excise duty was wrongfully collected in respect of certain items which are in the nature of post-manufacturing expenses. The assessee thereafter filed further revised claims of refund for the subsequent periods. The claims for refund having been rejected, the assessee filed the present Writ Petition No. 352 of 1983 in this Court and obtained a stay order on 21st February 1983 requiring the assessment to be done on the value arrived after deducting the alleged post-manufacturing expenses from the selling price on the condition that the assessee was required to execute a bond in favour of the Department that in the event of the petition being dismissed, the assessee shall pay to the Department the requisite amount.

(2.) AFTER this interim order was passed on 21st February 1983, this Court passed a further order on the 9th December 1983 in the light of the decision of the Supreme Court in the case of Union of India and Others etc. etc. v. Bombay Tyre International Ltd. and etc. etc. reported in AIR 1984, Supreme Court 420 = 1983 (14) ELT 1896 (SC ). One of us - Pendse J. , passed the said order on 9th December 1983 giving certain guidelines and fixing the time schedule for deciding the issue of post-manufacturing expenses in the light of the directions given by the Supreme court in the above said decision.

(3.) IN terms of the said order passed on 9th December 1983, the assessee filed a further revised statement of deduction on the ground of post-manufacturing expenses. In respect of some of the items, the assessee produced the necessary evidence consisting of Account Books which were duly certified by the Chartered Accountant. During the pendency of the proceedings before the assistant Collector, the assessee filed further revised price-list for the subsequent period. Whereas the order dated 16-3-1984 at Exh. "r" deals with the price-list for the period prior to 10-5-1983, the order dated 27-7-1988 at Exh. "aa" to the Petition deals with the price-list effective from 10-5-1983 till 31-3-1988. In the light of the evidence produced on record, the assistant Collector has partially granted the claim of abatement in respect of freight and transportation charges for the period stipulated in the order, between October 1980 and February 1983, excluding the period covered by the four months of July 1981, August 1981, April 1982 and July 1982. The claim for these four months on account of freight and transportation has been rejected. The other items which have been disallowed are bonus to dealers, commission to agents, expenditure incurred on account of secondary packing, interest on security deposits from dealers and agents, interest on dealers' deposits against direct dispatches and lastly, interest and bank charges on drafts.