LexCOLLECTOR OF CENTRAL EXCISE, NEW DELHI versus GURU NANAK REFRIGERATION CORPN.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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COLLECTOR OF CENTRAL EXCISE, NEW DELHI
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v .
. GURU NANAK REFRIGERATION CORPN.
MARCH 27, 2003
[SYED SHAH MOHAMMED QUADRI AND ASHOK BHAN, JJ.)
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Central Excise Act, 1944:
Ss.4(/)(a) and (b) and 4(4)-Wholesale trade-Levy of excise duty-- c
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Valuation of excisable goods-Assessee selling goods in wholesale trade at
price approved by excise authorities-Show cause notice issued to assessee
stating that cost of production of goods was more than cost of wholesale
price-Differential duty on basis of cost of production sought to be recovered-
Held, there is no valid reason to doubt genuineness of the sale price---(Joods
were sold at normal price within the meaning of s.4(/)(a) -Where normal D
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price within the meaning of clause (a) of sub section(!) is ascertainable, the
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provisions of clause(b) cannot be resorted to-On.facts, Clause(b) of s.4(1)
would not be attracted to determine the nearest ascertainable equivalent of
the normal price of goods for assessment of excise duty.
Union of India and Ors. v. Bombay Tyre International Ltd. etc.,(1983) E
14 E.L.T. 1896, relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9140 of I 996.
From the Judgment and Order dated 3 .11. I 995 of the Central Excise,
Customs and Gold (Control) Appellate Tribunal New Delhi in A. No. E./ F
1745/83-A in F.O. No. 601 of 1995-A.
Ms. Nisha Baghi, K.C. Kaushik and B.K. Prasad for the Appellant.
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Rajendra Singhvi and Ashok K. Singh for the Respondent.
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The following Order of the Court was delivered :
SYED SHAH MOHAMMED QUADRI, J. Heard the learned counsel
for the parties.
In this appeal against the final order No. 60 I of 1995-A of Customs
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SUPREME COURT REPORTS
(2003] 3 S.C.R.
A Excise & Gold (Control) Appellate Tribunal, New Delhi (for short 'the
Tribunal') in appeal No.E/1745/83-A dated 03.11.1995, the only point that
arises for our consideration is : whethe.r the Tribunal is right in reversing the
order of the Assistant Collector as confirmed by the Collector.
To appreciate the controversy in this appeal it is necessary to refer to
B Section 4 of the Central Excise Act, 1944 (for short, 'the Act') as it stood
during 1975-76, which, insofar as it is relevant for our purpose, read as
follows :-
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"4. Valuation of excisable goods for purposes of charging of duty of
excise-
(1) Where under this Act, the duty of excise is chargeable on any
excisable goods with ri~ference to value, such value shall, subject
to the other provisions of this section, be deemed to be-
( a) the normal price thereof, that is to say, the price at which such
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goods are ordinarily sold by the assessee to a buyer in the course
of wholesale trade for delivery at the time and places of removal,
where the buyer is not a related person and the price is the sole
consideration for the sale :
Provided that-
xxx
xxx
xxx
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(b) where the normal pric1! of such goods is not ascertainable for the
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reason that such goods are not sold or for any other reason, the
nearest ascertainable equivalent thereof determined in -such
manner as may be pr<escribed.
(2) xxx
(3) xxx
xxx
xxx
xxx
xxx
(4) For the purposes of this section,-
(a) to (d) xxx
xxx
xxx
(e) "wholesale trade" means sales to dealers, industrial
consumers, Government, local authorities and other buyers,
who or which purchase their requirements otherwise than in
retail".
From a perusal of clause (a) of sub-section (1 ), quoted above, it is clear
H that the duty of excise is chargeable on any excisable goods with refere1:ce
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C.C.E. v. GURU NANAK REFRIGERATION CORPN. [QUADRI, J.] 59
to value which shall, subject to the provisions of that section, be deemed to A
be normal price at which such goods are ordinarily sold by the assessee to
a buyer in the course of wholesale trade for delivery at the time and place
of removal provided that the buyer is not a related person and the price is the
sole consideration for the sale. It is not in dispute that the buyer is not a
related person and the price is the sole consideration for sale. It is also the B
common case that the respondent-assessee sold the refrigeration machinery
parts in wholesak trade at the price which was approved by the excise
authorities. Where normal price within the meaning of clause (a) of sub-
section ( 1) is ascertainable, the provisions of clause (b) cannot be resorted to.
The show cause qotice was issued to the assessee on the groExcerpt shown. Read the full judgment & AI analysis in Lexace.