EXTRUSION PROCESSES PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Both these petitions can be disposed of by a common judgment. These two petitions were filed in the wake of various judgments that practically allowed post-manufacturing expenses of every sort, deductible from the excise duty and on the basis of that, deductions were sought on every conceivable item whether legally climable or not, as post manufacturing expenses. However, the legal position appears to have been set at rest by the judgment in the case of Union of India & Ors. etc. etc. v. Bombay Tyre International Ltd. etc. ect., reported on 1983 ELT 1896 (S.C.). Technically speaking, in view of this judgment of the Supreme Court, these two petitions cannot survive. However, it appears that the Supreme Court as also our High Court and perhaps certain other High Courts had passed orders which have been described by the Bar as "Format Orders", whereby subject to certain directions given by the Court, all the items in respect of which the petitioners claimed deduction on the basis of earlier judgments, were referred to the Assistant Collector for the purpose of assessment and quantification. Mr. Ganesh, appearing for the petitioners in these two matters, submitted that here also I must follow the same approach. In fact he had prepared a draft of such a Former Order and he thought he could have the respondents persuaded for such an approach. However, Mr. Sethna, appearing for the respondents, pointed out that the judgement of the Supreme Court had decided as far back as on October 7, 1983 and thereafter number of such matters have been disposed of by passing Format Orders in the year 1983-84. He submitted that these two matter somehow remained and it will not be proper, at this stage, to pass such a Format Order. He pointed out that the order envisages that after the decision of the Assistant Collector he would be required to make a report to this High Court and the only meaning that can be given to such an order would be that the Court would consider the report and finally give its judgment, on the basis of such report. Mr. Sethna submitted that as a result of these orders, matters have been still pending in this High Court and in some cases the reports have been received but the reports have not been considered so far. When I enquired with the advocates as to whether there is any mandate of the Supreme Court that in every such matter similar Format Order should be passed, the Bar informed me that there is no such mandate but there appears to be some direction given to some of the Courts, with regard to such orders, However, I take it that there is no such order in any event in respect of these matters which are before me.

(2.) I am not inclined to keep these two matters alive and it is not necessary. It is true that if I were to dismiss the matters on the basis of the Supreme Court judgment, referred to above, perhaps there would be total injustice to the petitioners. Therefore, it may become necessary to make certain observations with regard to items of controversy as to whether the claim is legally tenable or not and on the basis of my observations the Assistant Collector will have to quantify the duty payable on these items. Thereafter certainly it is open to the petitioners to avail of such remedy as they want, either by way of appeal to the Collector of Central Excise (Appeals) or if they so desire, they can even file a fresh writ petition. But certainly no report need be called, to this Court on any item.

(3.) In these petitions the petitioners have filed their price list and in that they have enumerated the items of post-manufacturing expenses. It is these items which are in controversy. The items broadly relate to the cost of caps and capping charged, the cost of cartons and partitions and packing charges, freight and transport charges, sales tax, sole selling agent's commission etc. I will deal with each of these items as argued at the Bar.