DUKE AND SONS Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution of India was filed on March 27, 1981 to challenge legality of ordered dated March 13, 1981, passed by Assistant Collector, Central excise, Bombay Division. The petition was admitted on March 30, 1981. During the pendency of the petition, the decision of the Supreme Court reported in 1983 (14) E. L. T. 1896 (Union v. Bombay Tyers International) was delivered setting out the scope and ambit of Section 4 of the central Excise and Salt Act. The decision of the Supreme Court prescribes what deductions are permissible from the normal price to determine the assessable value. After the decision of the supreme Court, the petition was placed before one of us (Pendse, J.) and by order dated december 9, 1983, the proceedings were remitted back to the Assistant Collector with a direction to reconsider the matter in the light of the decision of the Supreme Court. The petitioners were permitted to file revised price list for proper determination of excise duty liability in respect of the claim of deductions. The Company was desirous of seeking deductions in respect of (a) transportation cost, (b) trade discount (rebate on cash sales), (c) Distributor's expenses, (d) commission to cartmen (Delivery Department expenses), and (e) forklift expenses, among others.

(2.) IN accordance with the order passed by this Court, the petitioners addressed letter dated february 1, 1984 to the Assistant Collector, Central Excise, Bombay setting out the information to substantiate the claim for deductions under various heads. The Assistant Collector by order dated November 25, 1989 granted deductions in respect of some items subject to verification of facts and documents and directed that the price list will be finalised accordingly. The Assistant collector by the impugned order disallowed certain items claimed by the Company and thereupon the petitioners amended the petition and are challenging findings on some of the items which the correctness of the order of the Assistant Collector in respect of items now in dispute.

(3.) THE Company had claimed deduction under the heading 'transportation cost' and the Assistant collector had allowed deduction in respect of transport cost from the factory gate to the place of wholesale buyer. The Assistant Collector declined to allowed transportation cost for the return of empty bottles. The Assistant Collector observed that bottles and crates are essential items for manufacture and sale of aerated waters and as the aerated waters cannot be marketed without bottles and crates, the coast of transport of return of bottles and crates cannot be permitted. Mrs. Mody, learned counsel appearing on behalf of the Company, submitted that the decision of the assistant Collector in respect of transport cost for the return of empty bottles cannot be sustained inview of the decision of the Supreme Court reported in 1988 (36) E. L. T. 723 ( Indian Oxygen ltd. v. Union of India and Others ). The Division Bench after considering the ratio laid down by the Supreme Court held that the assessee will be entitled to deduction on account of cost of transportation not only from the factory gate to the destination of the wholesale buyer but also in respect of return of empty bottles. In view of the decision relied upon by the learned Counsel, the order of the Assistant Collector declining to grant deduction in respect of transport cost of return of empty bottles to the factory cannot be sustained.