SYNPRO INDUSTRIES Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution of India.

(2.) THE material facts giving rise to this petition briefly are as follows :petitioner No. 2 is the Managing Director of petitioner No. 1, a Private Limited Company, registered under Indian Companies Act 1956, which carries on business of manufacture of paints, synthetics and allied products at Indore. Excise Duty is payable on the products manufactured by the petitioner Company, in accordance with the provisions of the Central Excises and Salt Act, J 944 (hereinafter referred to as 'the Act' ). In accordance with the provisions of Sub-rule (1) of Rule 173c of the Central Excise Rules (hereinafter referred to as 'the Rules') the petitioner Company filed a list showing the price of the goods manufactured by it. According to the petitioners, under a mistaken belief, they had showed price which included expenditure incurred in connection with sale and paid duty assessed on the goods accordingly. The petitioners have averred that sometime in the month of May, 1980, on perusal of the decisions of the Supreme Court, they realised that the levy of excise duty on post-manufacturing cost was illegal. The petitioners, therefore, wrote letters to the Assistant Collector, Central Excise, on 6th June, 1980 and 25th July, 1981 requesting him to approve the new price lists based on manu facturing costs and manufacturing profits. The petitioners also claimed refund of excise duty paid since 17th June, 1977. Respondent No. 2, however, by his letter dated 25th August, 1981, returned the priceiist. The petitioners have, therefore, filed this petition praying that the respondents be directed to accept the revised price list submitted by the petitioner and respondents be restrained from levying excise duty contrary to the provisions of the Act and that they be directed to refund the amount illegally collected.

(3.) IN the return filed on behalf of the respondents, it is contended that excise duty has been recovered in accordance with law. It is further averred that under, Section 4 of the Act, as amended, the assessable value is the value at which the goods manufactured or produced are sold for the first time by the manufacturers from the place of manufacture to a buyer, who is not a related person and that value would constitute the normal wholesale price for the purpose of assessable value, and that the excise duty has been levied and collected on goods manufactured and removed by the petitioners at the assessable value arrived at in accordance with the provisions of Section 4 of the Act. As regards claim for refund, it is urged that the Central Government has prescribed a procedure for claiming refund of excise duty paid in excess and as the petitioners had not adopted that procedure, it was not possible to consider the request for refund. It was admitted that respondent No. 2, Superintendent, Central Excise had returned the price list to the petitioners.