LexTHE ASSTT. COLLECTOR OF CENTRAL EXCISE versus BATA INDIA LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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B
THE ASSTT. COLLECTOR OF CENTRAL EXCISE
v.
BATA !ND!A LTD.
MAY 7, 1996
[AM. AHMADI, CJ, B.L. HANSARIA AND SUHAS C. SEN JJ.]
Central Excises and Salt Act 1944, S. 4(4)(d)(ii); Central Excis,e Rules
1944, Rule 8( !)-Whether the benefit of exemption given to footwear can be
claimed by the manufacturer even where Oze wholesale pri,ce of the footwear
C exceeds the limit of the exemption specified in the notification-Held, no;
unless it is shown by the manufacturer that the price of the goods includes an
amount of excise duty, no exclusion of the duty element from price for deter-
mination of value under s. 4( 4)( d)(ii) arises.
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Under a notification issued under Rule 8(1) of the Central Excise Rules,
1944 ('Rules'), footwear the value of which was up to Rs. 60 per pair was wholly
exempt from excise duty. The respondent-assessee BSL contended that foot-
)Vear manufactured by it, the wholesale prices of\ID.lch after discoUnt etc. were
Rs. 62, Rs. 64 Rs. 66, per pair, would also be fully exempt because the value in
these cases, after deduction of 10% excise duty, would be Rs. 60 or less per pair.
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It was further contended that the explanation to s. 4(4)(d)(ii) of the Central
Excises and Salt Act, 1944 under which the excise duty payahle was the 'effec-
tive duty' payable after accounting for the exemptions available, would apply
only where there was a variation in the rate of duty.
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Allowing the appeal, this Court
HELD: 1.1. The contention of the assessee that once the excise duty was
taken out from the wholesale price of shoes under the disputed category, the
assessable value would be less than Rs. 60 and that the benefit of the exemption
notification could therefore not be denied, could not be upheld. [427-E]
1.2. Unless it was shown by the manufacturer that the price of the
goods included an amount of excise duty payable by him, the question of
exclusion of the duty element from the price for determination of value
under Section 4( 4) (d) (ii) would not arise. If a manufacturer included in the
wholesale price any amount by way of tax, even when no such tax was
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payable, then he was including something in the price which was not pay-
424
ASSTT. COLLECTOR OFC.E. v. BATA lNDlALm. [SEN.J.]
425
able as duty at all. He \'t'as increasing the profit clement included in the
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\\'holesale price in another guise. In such a situation, there could not be any
question of deduction of duty payable on the goods frorn the wholesale price
because as a matter of fact, no duty had actuolly been included in the
wholesale price. [431-D, 428-B]
Hindustan Polymers v. Collector of Central Excise, [1989] 4 SCC 323, B
referred to.
Bala, Shoe Co. v. Central Excise, [J 985] 3 SCR 960, explained and
distinguished.
2. The contention of the assessee that the Explanation to s. 4(4)(d)(ii) C
came into operation only when there "'as a variation in the rate of duty could
not be upheld. TI1e object of the statute being clearly to exclude the actual
burden of excise duty from the wholesale price for determining the excisable
value, the construction suggested would defeat such object. [432-H, 434-E]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8762 of D
-1994 Elc. Etc.
WITH
Civil Appeal No. 1121, of 1992 Etc. Etc.
From the Judgment and Order dated 14.8.91 of the Delhi High Court
in C. W. No. 1900 of 1981)
From the Judgment and Order dated 5.3.93 of the Punjab & Haryana
High Court in W.P. No. 11633 of 1988.
V.R. Reddy, Additional Solicitor General, D.A. Dave, H.N. Salve,
Joseph Vcllapally, A.K. Ganguly, Shanti Bhushan, Ms. R. Nath for Khaitan
& Co., (Ravinder Narain, Ashok Sagar, Ms. Amrita Mitra, Rajan Narain,
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Ms. So nu Bhatnagar, Amit Bansal) for JED & Co., V.K. Verma, N .K.
Bajpai, A. Subba Rao, T.V.S.N. Chari, Ms. Manik Karanjawala, K.R.
Nambiar, Suman Khatian, Ms. Shalini for Khaitan & Co., V.B. Saharya for G
Saharya & Co., A.K. Goel and H.K. Puri for the appearing parties.
The Judgments of the Court was delivered by
SEN, J. The only point that falls for determination in this appeal is
whether the benefit of exemption given to footwear can be claimed by the H
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SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.
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manufacturer even where lhe wholesale price of the footwear exceeds the
limit of the exemption specified in the notification. There can be no dispute
lhal if lhe assessable value calculated according to Section 4 of the Central
Excise and Salt Act, comes uptExcerpt shown. Read the full judgment & AI analysis in Lexace.