FRIZAIR CORPORATION B 23 INDUSTRIAL ESTATE SANATNAGAR Vs. COLLECTOR OF CENTRAL EXCISE SOMAJIGNDA HYDERABAD

JUDGEMENT

(1.) (Judgment of the Bench was delivered by Sambasioa Rao, J) The two writ petitions raise identical contentions and,therefore, we propose to deal with them in a common order.

(2.) . petitioner was called upon by the third respondent to pay, under the Central Excises and Salt Act, 1944 (hereinafter refered to as the Act) and the Rules framed thereunder (hereinafter referred to as the Rules), some deficient amounts in the Excise duty levied on the goods manufactured by it. Its representation to the second respondent and appeal to the first respondent being of no avail, the petitioner filed these two writ petitiors seeking writs of eertiorari quashing the proceedings of respot dents 1 and 2 and the noties of demand is sued by the third respondent.

(3.) The petitioner is a partnership firm. It manufacture! room air-conditionen and their parts in its factory at Hyderabad. It entered into an agreement dated 5th March, 1962 with Messrs. Textiles and Engneering Corporation, Bombay for the purchase and sale of its manufactured goods at certain net rx factory prices. The petitioner furnished to the Excise Department those prices for different types of air-conditioning units manufactured by it, with a request that the said prices be approved. By his letter, dated 16th May, 1962, the Assistant Collector approved the prices and accepted the excise duty exigible on the goods on the basis of the prices so approved. However, on 14th November, 1962 two notices of demand were sent by the Excise Department to the petitioner purporting to be under rule 10-A of the Rules. One notice was for Rs. 24,750 in respect of 26 air-conditioners which had been cleared in the months of May and June, 1962 and the second was for Rs. 16,779 in respect of 17 air-conditioners cleared in the months of July, and August, 1962. The basis of the further claim made by the department on the petitioner, was the price at which the selling agent of the petitioner was selling the goods in the Bombay market. The deficiency in the excise duty was calculated on the difference between the price charged by the Bombay seller and the ex-factory price charged by the petitioner when it sold to its Bombay dealer. When this was brought to the notice of the department the Excise Inspector (the third respondent) altered the additional demands to Rs. 4,187-50 Ps. and Rs. 2, 847-50 p. respectively. The petitioner thereupon, took the matter to the second respon. dent, who by his order dated 22nd of June, 1965 held that the notices of demand to pay the deficiency were in order and enforceable, as the ex-factory prices furnished by the petitioner were not wholesale prices. A further appear was preferred to the first respondent, who by his order dated 16th of July, 1966, confirmed the second respondent's order and rejected the appeal of the petitioner. These are the material facts in W. P. No. 1804of 1966.