VOLTAS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) IN this petition under Article 226 of the Constitution of India, the challenge is to the show cause notice dated 4th November, 1988 (Exhibit -N to the Petition) issued by the second Respondent. The challenge is basically on the ground that the second Respondent will not have jurisdiction to issue the same as the issues raised in the show cause notice have been finally concluded. With a view to appreciate the submissions made by the learned counsel appearing for the parties, a reference will have to be made to the facts of the case in brief. The first petitioner Company from the year 1975 was manufacturing forklift trucks which were individually sold directly to the buyers in retail. The case of the first Petitioner Company is that the sale was a negotiated contract sale and the sale was at separate prices. According to the Petitioner, the valuation of the forklift trucks (for short "forklift") was required to be done in accordance with Rule 6(a) of the Central Excise Valuation Rules, 1975 (for short "the Valuation Rules of 1975"). It is contended that the valuation would be based on the retail price reduced by such amount as was necessary and reasonable to arrive at a price at which the assessee would have sold such forklifts in the course of wholesale trade to non -related person. On 15th September, 1975, the first Petitioner Company filed a price list in the prescribed format for sales made in retail price. The first Petitioner claimed a rebate of 9.66% from the retail price to arrive at the wholesale price. On 22nd June, 1976, the Assistant Collector passed an order approving the price list, but while doing so, he allowed the rebate of only 7.5%. The Appellate Authority proceeded to set aside the order and passed an order of remand. Thereafter, on 15th October, 1976, a show cause notice was issued directing the first Petitioner to show cause as to why rebate should not be restricted only to 7.5%. By an order dated 13th September, 1978, the Assistant Collector held that the first Petitioner was not entitled to any abatement whatsoever. He accepted the different prices which are charged from the buyers of the same class provided, the first Petitioner files lists in Proforma -II.

(2.) ACCORDING to the case of the Petitioners, by letter dated 15th December, 1978, they informed to the Assistant Collector that they had preferred an Appeal against the order dated 13th September, 1978 and that they had been informed by the Excise Department that in view of the order dated 13th September, 1978, the Petitioners were required to file a revised price list in the proper format. The Petitioners also informed that since the clearance would be adversely affected, they will be doing so under protest and without prejudice to their contention that the case was governed by Rule 6(1)(a) of the Valuation Rules of 1975. The Petitioners also informed the Assistant Collector that they would be paying excise duty under protest by reserving the right to file the same price list again under Rule 6(1)(a) of the Valuation Rules of 1975. By an order dated 11th June, 1980, the Appellate Collector proceeded to set aside the order dated 13th September, 1978 passed by the Assistant Collector and directed the Assistant Collector to determine the valuation in accordance with the law under Section 4(1)(b) of the Central Excises and Salt Act, 1944 (for short "the said Act of 1944") read with the Valuation Rules of 1975 and to determine the extent to which the first Petitioner would be entitled for an abatement as claimed. A notice of the review was issued by the Central Government which was replied to by the Petitioners. The review was placed before the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (for short "CEGAT").

(3.) ON 8th January, 1987 and 18th March, 1987, the first Petitioners wrote to the Assistant Collector to expeditiously decide the pending price lists in the light of the order of the CEGAT and considering the fact that he himself had granted abatement of 7.5%. The request was made to approve all the price lists by treating them as retail sales and granting them an abatement of 7.5%. On 11th May, 1987, the first Petitioner again wrote to the Assistant Collector by pointing out that the forklifts have been sold only in retail and, therefore, they are entitled to abatement of such retail prices. It was also pointed out that the price lists dated 12th December, 1986 to 16th April, 1987 and the price list dated 26th December, 1986 had been filed in the Proforma -II though the CEGAT held that the applicable proforma was the Proforma -V. Therefore, the first Petitioner again submitted the same price lists in the correct Proforma -V and claimed abatement of 7.5%. On 7th August, 1987, an order was passed by the Assistant Collector holding that the assessable value of forklifts was governed by Rule 6(a) of the Valuation Rules of 1975 and the first Petitioner was entitled to rebate of 7.5% from the retail price to arrive at the wholesale price. Under the said order, the Assistant Collector approved the price list dated 15th September, 1975 and held that the subsequent price lists filed on that count were also approved accordingly.