MAHINDRA & MAHINDRA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) BY the present writ petition under Article 226 of the Constitution of India, the petitioners have challenged the order dated 31st May 1988 passed by the Collector (Appeals), and the final Assessment Orders dated 27th May 1988 and 7th June 1988 passed by the Superintendent, Central Excise, Nasik; the final Assessment Order dated 23rd June 1988 passed by the Assistant Collector and the Show Cause Notice dated 3rd August 1988 to the extent the same relates to a sum of Rs.34,86,171.54 issued by the 4th Respondent, and have asked for quashing and setting aside the same; for a writ of mandamus or any other appropriate writ for withdrawing or cancelling the said final Assessment Orders and the said Show Cause Notice and for an order of this Court for refund of an amount of Rs.23,77,884.09 wrongfully recovered in excess from the petitioners with interest thereon at the rate of 18% from the date of recovery till payment.

(2.) BRIEFLY stated the facts giving rise to the present petition are as follows :

(3.) MR .Korde the learned Counsel appearing for the petitioners, submitted that the dealers/sub-dealers are independent. buyers and are not related persons and the transactions between the petitioners and the dealers/sub-dealers are on principal to principal basis and are thus transactions at arms length. It was further submitted that the petitioners had charged warehousing and handling charges which consisted of transportation cost from the petitioner's factory at Nasik to their said depots and that these amounts were added to the ex-factory price which was ascertainable under the provisions of Section 4(1)(a) of the said Act being normal price. As it was an admitted position that before the removal of the vehicles from the petitioners Nasik factory the excise duty was paid thus under the provisions of Section 4(1)(a) of the said Act that was the 'normal price'. In view thereof and in view of various decisions of the Supreme Court and also the Tribunal there was no question of the price being different in respect of supplies made from the depots of the petitioners. Mr.Korde submitted that the only issue in question in the present writ petition was thus that when the normal price is ascertainable whether the department would be justified in claiming additional extra duty in view of the fact that the stocks transferred to assessee's depots are subjected to certain additional expenses as a result of such transfers. Mr.Korde submitted lastly that the issue now can be taken as settled in view of the decision of the Apex Court in the matter of Indian Oxygen Ltd. vs. Collector of C.E. reported in 1988 (36) E.L.T. 723 wherein the Apex Court while reiterating the principle upon which assessable value is to be determined held that the assessable value has to be computed under Section 4(1)(a) of the Act, where the wholesale price is ascertainable at the factory gate, the question of transportation charges becomes entirely irrelevant and that the cost of transport-ation from the factory gate to the place of delivery and transit expenses were not to be added to the wholesale price at factory gate for purposes of duty under the Act. Mr.Korde submitted that in the instant case there was a finding that there was an ex-factory price which was ascertainable and therefore there was no question of having any other price upon which value is determinable. He sought support from the above-mentioned Supreme Court decision wherein it was also held where there was a clear finding and ex-factory price was ascertainable and if that position is accepted, other expenses and cost or charges must be excluded. Mr.Korde further relied on the decision of the CEGAT in the matter of Collector of Central Excise vs. Ashok Leyland Limited, reported in 1987(29) E.L.T. 530, wherein the Tribunal rejected the contention of the Department that stock transfers should be re-assessed on the basis of eventual sales ex-depots as the normal price at which such goods were ordinarily sold by the assessee to a wholesale buyer at the time and places of removal, i.e. the factory gate, was available under Section 4(1)(a) which was the normal price or the net dealer price charged by the respondents from their main dealers. Similar view was again expressed by CEGAT in the matter of Usha Martin Industries Ltd. Vs. Collector of Central Excise, reported in 1987 (27) E.L.T. 728 which decision was also cited by Mr.Korde. Mr.Korde in fact cited several other authorities which followed the decision of the Supreme Court in the matter of Indian Oxygen Ltd. supra. These decisions were: 1994 (74) ELT 528, 1991(51) ELT 305, 1991 (51) ELT 325 and 1996 (85) ELT 224. In our opinion, it is not necessary to go into all these decisions as they follow the decision of the Supreme Court in the Indian Oxygen's case.