LexBATA SHOE CO. (P) LTD. & OTHERS versus THE COLLECTOR OF CENTRAL EXCISE & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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f:B
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960
BATA SHOE CO. (P) LTD. & OTHERS
v.
THE COLLECTOR OF CENTRAL EXCISE & ORS.
25th April, 1985
[D.A. DESAI, A.P. SEN AND V. BALAKRISHNA ERWI, JJ.]
Central Excise and Salt Act, 1944 Section 4, scope of-Detern1ination of
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value for the purpose of excise duty-Exigibility to eXcise duty of "footwear and
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accessories" under Entry 36 of the First Schedule to The Act in terms of the Noli·
fication 1Vo. G.S.R. 171{67 dated 24th July, 1967-lnterpretation of the Noli·
fication.
·By virtue of Entry 36 of the First Schedule in the Ceatra1 Excises an·d Salt
Act, 1944 "footwear and parts thereof" in or in relation to the manufacture of
which any process is ordinarily carried on with the aid of power, is chargeable to
excise duty, the rate of duty being 10% ad valorem in respect of ''footwear" and
.15% ad valorem in resp.!ct of"partsoffootw.!ar". Bya NJtification dated
J~ly 24, .196?, issus:d tn exercise of the pow.!rs conferred by sub-rule (I) of rule 8
of the Central Excise Rules, 19~4. the Central Government exempted, with effect
from the 26th May, 1967, footwear1 falling under item -No. 36 of the· First
Schedule to the Central Exci'ies and Salt Act, 1944, of which the value did not
exceed Rs. 5 per pair from the w:tole of the duty of exci~e leviable thereon.
During the year 1967 and 1968, Bata Shoe C.ompany was manufdcturing
,,certain item> Of footw.:ar of which the wholesale price'was Rs. 6.25 per pair.
The contention of the company that since the assessable value of such items of
footwear calculated in terms of section 4 of the Act, as it stood at the relevant
time was only Rs. 4.94 and thus less than Rs. 5 per pair were qualified for exem-
ption under the Notification was negatived by the department on the ground that
while computing the value of the articles for the purpose of judging the appli-
cability of the exemption, the duty element of the cost structure could not be
deducted from the wholesale price and on such calculation the value of such
footwear would exceed Rs. 5 per pair.
Three Writ Petitions were, therefore, filed in the High Courts of Patna,
Calcutta and the Punjab & Haryana, since the company had three manufac-
turing establishments attracting the jurisdictions of these Courts. The Patna
High Court allowed the writ petition accepting the contention of the company
and granted c~rtificlte of .ipp~1I to tlu: dep.trtment. The Jligh Court of Calcutta
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ilATA siloil co. v. CENTRAt llXciSE
'961
dismissed the petition and accepted the stand of the Department that the
e:icpression "va·lue" occurring in the Notification dated July 24, 1967 is not the
deemed "value" ca.Jculati:d according to the provisions of section 4 of the Act,
but h the real and a:tu1l "valu~" of the goods after the payment of the duty,
The High Court of Punjab & Haryana dismissed the petition in llmini on the
ground of Jaches. Both these two High Courts, however, granted certificate of
appeal to the company. Hence the three appeals by certificates.
Allowing the appeals pf the company and dismissing the State appeal,
1he Court,
HELD: J.J While-computing the "value" of the articles of footwear ·for
the purposes of testing the avalability of the exemption granted under the
Notification dated July 24, 1967 section 4 of the Central J?xcises and Salt Act,
19tt gets attracted. Section 4 is comprche:ic;ive in its coverage and it lays down
· th;;: procedure to be follOw.;:d for ·d~termbation of "value" of any article in every
case where the articfo is chargeable with duty at a rate depende11t on the value of
: the article. (966H, 967A]
1.2 While the notification makes it clear that the effect of the Notification
is to render the chargeability or otherwise to duty of excise of footwear falling
under item 36.of the 'First Schedule is made wholly depeaderit upon the "value"
of the article of footwear ; in ca5e sucll "value" exceeds Rs. 5 per pair, duty
will. be chargeable at the rate of 10% whereas if th.e value does not execed Rs.5
per pair, no duty will be chargeable on such item.s of footwear. that is the rate
of duty will be nil, Thus entry 36 read alorig with thC 'Notification dated July 24,
1967 clearly shows that the chargeab1Jity to duty in respect of any article of foot-
wear is made dep.:ndent upon its value in the sense that the chargeabJility to
duty of excise will arise only if t11e ''v41Ui:" of the article does not exceed Rs. 5
per pair. [9 :6D·E, 967/\-B)
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