BATA INDIA LTD Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) The dispute in this case is about footwear known as "Miners' Boots". These boots are also known in the market and sold as "Industrial Safety Boots". According to the petitioner, both the products are identical although sold under different names. Under the provisions of the Central Excises and Salt Act (hereinafter described as the said Act), duty is levied on footwear and parts thereof at the rates set forth in the First Schedule to the said Act.

(2.) The case of the petitioner is that until the end of 1973, the value of the said footwear was determined under Section 4(a) of the said Act, on the basis of their wholesale cash price. The value was computed in accordance with a formula laid down in an order passed by the Central Board of Revenue on 16th October, 1957. By the said order, the Board laid down that in arriving at the assessable value, a: uniform discount of 6% was to be deducted from the wholesale cash price of the footwear. The Board found that in most cases, trade discount was given as 6%, in some cases, trade discounts were allowed at rates higher than 6% and in some cases, lower rates were allowed. According to the petitioner, the Board laid down this formula with full knowledge of the fact that in some cases, no trade discount was actually given. The intention of the Board was to allow an average trade discount in all cases including the cases where no trade discount was at all given.

(3.) It is the case of the petitioner that the formula of 6% deduction was arrived at by the Board as a rough and ready measure and to avoid laborious calculation in every case of manufacture of footwear. The average formula was meant to apply when actual trade discount were higher than 6% as well as to cases where actual trade discount was lower than 6%.