PURE DRINKS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The plaintiffs manufacture soft drinks i.e. non alcoholic beverages and carbonated beverages. At all material times they marketed their products under the name of Coca Cola, Fanta and Soda Special.

(2.) Prior to 1970 the plaintiffs beverages were not liable to any excise duty. Under the Central Excises and Salt Act, 1944 the excise duty was levied for the first time on aerated waters with effect from 1st March, 1970 when new Item 1-D was introduced in the First Schedule to the said Act. Thereafter the Assistant Collector, Central Excise, Bombay Division IV, called upon the plaintiffs to file a price-list of the products manufactured by the plaintiffs. Thereupon the plaintiffs furnished the necessary price lists from time to time. The price lists furnished by the plaintiffs mentioned that the plaintiffs were supplying their products to the wholesale dealers through the plaintiffs salesmen in the plaintiffs trucks and that no discount or commission was being paid by the plaintiffs to the wholesale dealers. The price lists so submitted were approved by the defendants from time to time. The plaintiffs paid excise duty as per the approved price lists. These price lists included transport charges or freight incurred by the plaintiffs for supplying their products in their trucks up to the wholesale dealers premises. The plaintiffs contend that on account of inclusion of these charges which are post-manufacturing charges in the price lists, they have paid duty on transport charges and freight under a mistake of law. The present suit is to recover the excise duty paid by the plaintiffs on transport charges incurred by the plaintiffs for supplying their products in their own trucks up to the wholesale dealers premises. The particulars of claim in the present suit are set out in Exh. H to the plaint. The claim for recovery of excise duty so paid is for the period 31-5-1973 upto 7th January, 1975 together with interest at 18% per annum. The present suit was filed on 14th July, 1976. Prior to the filing of the suit the plaintiffs gave a notice dated 11th May, 1976 under section 80 of the Code of Civil Procedure.

(3.) The defendants have denied their liability to pay to the plaintiffs the amount claimed. Several issues of law were raised in the Written Statement. After the filing of the suit however, a number of these issues have been covered by various decisions delivered by the Supreme Court and this High Court. In the light of these decisions and defendants have very fairly not pressed issues Nos. 1 and 2, which deal with the suit being barred by section 40(1) of the Central Excises and Salt Act, 1944 and the claim being not covered by Rule 11 of the Central Excise Rules, 1944. The parties have also agreed that in the event of the plaintiffs succeeding in the suit in respect of either the entire claim or a part of the claim, the claim should be referred to the Assistant Collector of Central Excise, Divn, G-I, Bombay for determination of the exact amount of central excise duty to be returned to the plaintiffs. In view of this agreement, there are no disputed questions of fact in the present suit. The remaining issues relate to the question whether the suit of plaintiffs is barred by the law of limitation; whether the plaintiffs came to know of the decision of the Supreme Court in the case of (A.K. Roy v. Voltas Ltd.) in June/July 1973 as alleged in para 15 of the plaint and whether the plaintiffs waived any irregularity in the assessment of duty because the plaintiffs themselves had included the transport charges in the price lists.