MAHINDRA AND MAHINDRA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS writ petition, under Article 226 of the Constitution of India, seeks to challenge the legality and validity of two Show Cause Notices (1) Notice dated 12th July, 1985 along with its annexure dated 21st May, 1986 and (2) Notice dated 4th February, 1986, both issued by the Superintendent of Central Excise for short payment of excise duty under section 11-A of the Central Excises and Salt Act, 1944 (for short, "the said Act" ).

(2.) THE petitioners herein are a Public Limited Company and they manufacture agriculture tractors (falling under Tariff Item No. 34-II) and required engines (Tariff Item No. 29) and certain components (Tariff Item No. 68) for the same at their factory situated at Kandivali, Mumbai. The petitioners have sales depots at Bombay and at Daman, Ludhiana and Lucknow etc. They have been filing classification list and price list periodically under the procedure of self removal of excisable goods which is under the control and supervision of Inspectors of Excise at the factory level who in turn are under the control of the Superintendent of Excise. Accordingly, the petitioners have been paying the excise duty on the goods removed at the factory gate regularly. The above-referred Notices principally claimed that the petitioners had been selling their tractors from the depots at much higher prices containing amounts beyond reasonable expenditure on account of transportation, insurance etc. The duty paid on these tractors was however only on the price at the factory level resulting into short payment or excise duty. The notices call upon the petitioners to show cause to the Assistant Collector of Central Excise as to why the differential amounts should not be recovered under section 11-A of the said Act. Appeal against the decision of the Assistant Collector lies to the Collector of Central Excise.

(3.) THE Superintendent of Central Excise, who issued the Notices, is joined as respondent No. 4 to the petition. The Assistant Collector is respondent No. 3. The Collector of Central Excise is respondent No. 2 and the Union of India is respondent No. 1. Mr. Setalvad, Senior Counsel with Mr. Shroff have appeared for the petitioners. Mr. Sethna, Senior Counsel with Mr. Chaudhari have appeared for the respondents to defend the notices.