BALLARPUR INDUSTRIES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petition as originally filed, challenges the order dated 8-12-1981 rejecting the price list and the basis of assessment of the goods of purpose of Excise duty. Subsequently, during the period of pendency of this petition, another order of assessment came to be passed on 19-8-1986 as directed by the interim order of this Court dated 3-3-1986. This order is also challenged by the petitioner.

(2.) The petitioner no. 1 is a Company registered under the provisions of the Companies Act, 1956 having its Registered office at Ballarpur, District Chandrapur, State of Maharashtra. The petitioner Company is carrying on the business of manufacturing paper of various qualities inter alia at its factory situated at Ballarpur. The second petitioner is a shareholder of the Company. The first respondent is the Union of India, while the second respondent is the Central Board of Excise and Customs, New Delhi and the third respondent is Collector, Central Excise and Customs, Nagpur. The Fourth and Fifth respondents are the Assistant Collector and Superintendent of Excise and Customs concerned with the relevant orders.

(3.) Under the decisions rendered by the Supreme Court as well as various High Courts in India, the assessable value of the goods had to be based on the manufacturing cost plus manufacturing profits of the goods. This was as per the interpretation of the old Section 4 of Central Excises and Salt Act, 1944. In other words, from the wholesale cash price all elements of cost pertaining to non-manufacturing or post manufacturing operations (P.M.E. and P.M.P.) had to be excluded. Reference may be made to A. K. Roy v. Voltas 1977 ELT (J 177) = (A.I.R. 1973 S.C. 225). In 1975, however, the High Court of Bombay in India Tobacco Co. v. Union of India 1979 ELT (J 476) held that under old section 4 of the Act assessable value of the goods had to be based on the manufacturing cost and manufacturing profit. Various P.M.E. were held to be deductible from the wholesale cash price. This was also the view taken by number of High Courts in India, except Gujarat and Punjab.