COMMISSIONER OF CENTRAL EXCISE, INDORE Vs. PANCHSHEEL ORGANICS

JUDGEMENT

(1.) THE issue that is placed before us for our consideration relates to a conflict between the interpretation given by the Board in its Circular dated 8.8.75 with respect to the provisions contained under proviso (ii) of Clause (a) of Sub -section (1) of Section 4 of Central Excise Act 1944 and the interpretation given by the Supreme Court on the very same provision.

(2.) THE appeal is at the instance of revenue. The respondent is engaged in the manufacture of bulk drug falling under chapter 29 of Central Excise Tariff Act, 1985. A show cause notice was issued to them demanding differential duty for the reason that price of certain items manufactured by the respondent was fixed below the price fixed under Drug Price Control Order, 1995. Rejecting the objection raised by the party, the Assistant Commissioner, Central Excise confirmed the demand and a penalty was also imposed. The party took up the matter in the appeal. The Commissioner (Appeals) accepted the contention raised by the appellant and held that the goods sold at the normal price would attract duty only at such a price notwithstanding any statutorily fixed price. This finding was based on a circular issued by the Board dated 8.8.75 clarifying the provisions contained proviso (ii) under Sub -section (1)(a) of Section 4. Aggrieved by the above order the revenue has come up in appeal.

(3.) PROVISO (ii) to Section 4(1)(a) of the Central Excise Act, 1944 which is as under: