BOMBAY TYRES INTERNATIONAL LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition under Article 226 impugns the order of the 3rd respondent dated 1st November 1974 rejecting the petitioners' application for refund of a part of the excise duty paid upon their product 'tread rubber', also called 'camel back'; the appellate order of the 2nd respondent dated 9th October 1975; and the 1st respondent's order in revision dated 1st December 1978.

(2.) The petitioners paid excise duty upon the tread rubber manufactured by them including in the value thereof its packing cost. In January 1974 the petitioners learnt of the decision of the Appellate Collector of Central Excise, Madras, dated 8th June 1973 in the case of the Madras Rubber Factory Ltd., that the packing cost of tread rubber was to be excluded in computing the excisable value. On 17th January 1974 the petitioners made an application to the Superintendent of Central Excise, Bombay, for refund of the excise duty on the cost of packing the tread rubber manufactured by them during the twelve months ended 31st December 1973. The claim for refund was in the sum of Rs. 1,26,329/-. On 27th July 1974 the amount of the claim for refund was revised.

(3.) On 1st November 1974 the 3rd respondent passed an order rejecting the claim for refund. He noted that the petitioners had contended in their letter dated 3rd April 1974 that although the tread rubber could be sold in the condition in which it had been wound in roll form, it was packed in cardboard cartons or wooden cases to facilitate handling and despatch by lorry or goods train. This was not correct as the tread rubber rolls were first placed in polythene or cellophane paper, then packed in cardboard cartons or wooden cases and then delivered to the customers. The petitioners had nowhere mentioned that the tread rubber was actually being sold without any packing. It, therefore, meant that the packing was required before the tread rubber was delivered to customers. Its cost, therefore, had to be included in the value of the tread rubber.