LexMIS. UNITED GLASS, BANGALORE versus COLLECTOR OF CENTRAL EXCISE
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;J. MIS. UNITED GLASS, BANGALORE v. COLLECTOR OF CENTRAL EXCISE JANUARY 5, 1995 [B.P. JEEVAN REDDY AND S.B. MAJMUDAR, JJ.] Central Excises & Salt Act, 1944/Central Excise (Valuation) Rules 1975; S.4(1)-Rules 6,7-Distil/ery-Purchasing bottles from an outside com- pany-Later setting up a bottling unit-Prices declared by the bottling unit-Tribunal directing adoption of price approved for the earlier sup- plier-Where the price declared by the new unit is higher than the earlier supplier's, the higher price declared should be adopted-Held, valid. A B c The appellant is a manufacturing unit within the Khoday Group of Industries, its holding company being Khoday Distilleries Ltd. The appel- lant is a division of Khoday Brewing and Distilling Industries Private D Limited which is also held by Khoday Distilleries Ltd. The bottles re- quired by this group of industries were purchased from Alembic Glass lndusties. In 1978, the appellant-unit was established for the purpose of manufacturing bottles required by the Khoday Group of Industries. The appellant filed price lists which were approved provisionally by E the excise authorities. On scrutiny the authorities found that the value indicated was much below the cost of production and that the date fur- nished was vague and incomplete. It was also found that some bottles were sold to others also. Show cause notices were issued to the appellant, proposing to re-determine the values of bottles under Rule 7 of the Central F Excise (Valuation) Rules, 1975 i.e., under clause (b) ofS.4(1) of the Central Excises and Salt Act. After hearing the appellants, the Assistant Collector confirmed the values proposed in the show cause notices. The appeal preferred by the appellant was allowed by the Collector (Appeals). He directed the Assistant Collector to adopt the sale price charged by the G appellant to others as the basis and to finalise the value under S.4(1)(a) of the Act. The Collector of Central Excise went in appeal and the Tribunal allowed the same. It directed that for the period 1.7.1979 to 30.6.1983 wherever the prices declared were lower than that of Alembic for the H 47 48 SUPREME COURT REPORTS [1995] 1 S.C.R. A comparable bottles, the prices as approved for Alembic should be adopted. B c In this appeal, the appellant contended that the Tribunal should have directed that prices of Alembic alone should be uniformly adopted as the value of all types of bottles manufactured by the appellant and it could not have directed the determination on a dual and mutually inconsistent basis, viz. Where the prices of Alembic were higher than the prices declared, the prices of Alembic should be adopted but where the prices of Alembic were lower, the appellants prices should be adopted. The respondent contended that where the appellant itself has declared higher values it cannot object if those values are accepted. Dismissing the appeal, this Court HELD : 1. It is obvious that Rule 7 of the Central Excise (Valuation) Ru~e, 1975 is in the nature of a residuary rule. It applies only when the D valuation cannot be determined under the other Rules. The Tribunal has directed the valuation to be made under Rule 6(b) (i). The said provision is attracted where the manufacturer does not sell the goods in question but uses or consumes them himself in the manufacture of other articles. In such a case, the Rule says, that the value of the comparable goods manufactured E by the assessee or by any other assessee should be adopted. [54-E] 2. The bottles manufactured by the appellant are of different values, i.e., of different sizes and shapes. The value of each type of bottles is different. Price lists filed by the assessee indicate the value of each type or category of bottles separately and the authorities too have to determine p the value of each type/category of bottles separately. Different classes or categories of goods may call for different method of valuation to be adopted. If so, there is nothing illegal if the Tribunal directs that in case of those categories of bottles where the price declared by the appellant is higher than the price declared by Alembic, the price declared by the appellant should be adopted. The appellant cannot object if the price G declared by him is adopted. He cannot say that the price declared by him for the several classes/ categories of bottles represents a package and that Revenue must other accept it
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