Case: Britannia Industries Limited Vs. Union Bank of India

in Bombay Tyre International Ltd. s case (supra ). In the present case before us also, the Assistant Collector found as a fact that secondary packing of the Petitioners biscuits in tin boxes and corrugated card-board boxes was not special packing done at the request of the wholesale buyer but was part of the normal packing for marketing these goods. This view about the nature of packing of biscuits is supported by the division Bench decision of this Court in Sathe Biscuits case (supra ). ( 36 ) FOR the foregoing reasons, we conclude that the Petitioners claim for deduction on account of special packing was rightly rejected by the Assistant Collector. Even if the Petitioners can legitimately contend that the law relating to deduction on account of special packing had developed only after, pronouncements made by the Supreme Court in Bombay Tyre International ltd. s case (supra), the Petitioners must still fail because even after being given further opportunities under the order of the learned Single Judge dated 5th December 1983, the materials produced by them were not believed by the Assistant Collector. In rejecting the petitioners said case regarding special packing, the Assistant Collector did not commit any error of law or fact apparent on the face of the record which would warrant interference under Article 226 of the Constitution. After giving reasons, the Assistant Collector had disbelieved the petitioners case. He found the packings to be normal or usual packings. Therefore, we are unable to interfere with the order of the Assistant Collector rejecting the claim for deduction on account of special packing. ( 37 ) BEFORE we conclude, we may deal with the preliminary objection raised by Mr. Hidayatullah. His submission was that it was not open to Mr. Sethna, the learned Counsel for the Respondents, to urge any point which cannot be found in the orders of the Assistant Collector dated 10th august 1984 and 30th March 1985. According to Mr. Hidayatullah, the learned Counsel for the petitioners, the points now urged by Mr. Sethna were also not taken in the affidavit filed on behalf of the Respondents. In this connection, the learned Counsel for the Petitioners had relied upon a number of reported decisions including Commr. of Police v. Gordhandas, A. I. R. 1952 s. C. 16; Mohinder Singh Gill v. Chief Election Commissioner, A. I. R. 1978 S. C. 851; Bush (India) Ltd. v. Union of India and Others, 1980 (6) Excise Law Times 258 at p. 260 and leukoplast (India) Ltd. v. State of Goa, 1988 (36) Excise Law Times 369 . We find no substance in the preliminary objection by which, in effect, the learned Counsel attempted to shut out submissions made on behalf of the Respondents. The orders in question of the Assistant collector were quasi judicial in nature. The Assistant Collector had given several reasons in his two orders dated 10th August 1984 and 30th March 1985. Even if it is assumed that some of his reasons are erroneous, in the event this Court is unable to strike down the rest of the reasons contained in the orders of the Assistant Collector, this Court under Article 226 of the constitution cannot quash such quasi judicial order of the Assistant Collector. The Petitioners accordingly are bound to fail. Amongst other reasons, on facts, the Assistant Collector had disbelieved the claim of the Petitioner Company that it had in fact incurred transport costs and that such costs were included in the price charged to its wholesalers. The Assistant Collector also disbelieved that any special packing was used by the Petitioner Company. The secondary packing were found upon the facts to be part of the normal packing for making the petitioner companys goods marketable. These findings were sufficient for rejecting the Petitioners claim for deduction under the heads of freight and transport charges and costs of special packing. ( 38 ) IN the instant case, by the format order dated 5th December 1983 Pendse, J. had directed the assistant Collector to pass orders subject to final orders of this Court. Therefore, at the final hearing, in order to support the orders passed by the Assistant Collector, the Respondents were entitled to make all appropriate submissions on points of law which did not require further investigation of facts and which related to the question of jurisdiction of the Assistant Collector. ( 39 ) AT the time of his reply, Mr. Hidayatullah, the learned Counsel for the Petitioners, had relied upon some decisions rendered by the CEGAT, vide Collector of Central Excise v. Windsor foods Ltd. 1988 (37) Excise Law Times 297. In their said decisions the ratio of Godfrey Philips india Ltd. s case (supra) was purported to be applied. We have already dealt with the decision in godfrey Philips India Ltds case (supra ). Therefore, we consider it unnecessary to separately deal with the decisions which had only applied the law laid down in Godfrey Philips India Ltd. s case (supra) and Madras Rubber Factorys case (supra) to the particular fact. ( 40 ) IN the above view, we are unable to interfere with the order of the Assistant Collector demanding balance excise duty payable by the Petitioner Company. He has already given credit for deductions to be made on account of freight insurance and surcharge on sale tax. The petitioners have failed to make out any case for refund under any other head. We have already noticed that in the present case the Petitioners ultimately did not urge their claim for refund for any period prior to 1st October 1975. The same is subject-matter of a separate Writ Petition. It is, therefore, unnecessary to any longer consider the submission of the learned Counsel on both sides regarding the extent of the Writ Courts power to order refund of duties paid in excess of the amount lawfully recoverable. In the present case, the question of unjust enrichment was not taken in the affidavit. We, therefore, need not decide the said point also.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It was not accepted that the cash monies in the form of these deposits available to the assessee company were allowed to lie idle and borrowings were made from other sources at higher market rate. The assessees did not adduce evidence to show that the said amounts were not at all utilised as capital. Liability to pay interest on these deposits was to be discharged out of the miscellaneous income arising, if any, by way of deposits and not out of the sale price of goods( 17 ) IN our view, the Assistant Collector of Central Excise, Respondent No. 6, did not commit any jurisdictional error in rejecting the Petitioner Companys claim for deduction on account of such interest payments on deposits from its wholesalers. It was not very material that in the books of account of the Petitioner Company interest paid on the said deposits was separately shown. Prior to the filing of this Writ Petition, the Petitioners at no earlier stage of the proceedings had claimed deduction of such interest payments entered in their books of account for the purposes of fixation of price lists for their products sold to wholesalers. Secondly, payments of interest are made for use of money borrowed, lent or advanced. We see no reason why the said interest payments upon deposits received by the Petitioner Company are to be deducted in assessing the wholesale price under Section 4 of the Act merely because the persons who made the said deposits of money happened to be wholesale buyers of the Petitioners products. Therefore, the petitioner companys claim for deduction on account of interest payments upon the deposits made by its wholesale distributors ought to failIn his order dated 10th august 1984 the Assistant Collector mentioned two invoices and transport bills produced by the petitioner Company in order to show payments of transport charges. The Assistant Collector had referred to clause 5 of the agreement between Messrs. Britannia Industries Ltd. and their authorised wholesalers and interpreted the same by holding that all the expenses including transport demurrage/wharfages had to be borne by the wholesale dealer. Therefore, the assessees claim that it incurred transport charges was not acceptable and anything contrary to the provisions of clause 5 of the agreement had not been brought forward. The Assistant Collector observed that the sale of biscuits by the Petitioner was on the basis of different regions and the prices of biscuits manufactured by the Petitioner Company in Bombay city and suburbs and always remained lower than the prices of the same biscuits sold in the regions outside Bombay city and suburbs. The differences in prices in the different regions was due to the delivery charges payable on account of carriage of the goods for delivery over longer distances. The further finding of the Assistant Collector was that in the case before him freight paid was not averaged in order to make the wholesale cash prices of the biscuits same everywhereWhether transport charges had entered into the prices payable by the wholesalers was a question of fact.We, however, cannot subscribe to the extreme view canvassed on behalf of the respondents that the price charged by the manufacturer at the factory gate can never include transport charges. In case excise duty levied under Section 3 of the Central Excises and Salt Act is to be collected with reference to the value of excisable articles, such value is to be determined in terms of Section 4 of the Act. Such value under Section 4 (1) (a) is deemed to be the normal price, i. e. the price at which such goods are ordinarily sold by the assessee to a buyer in the course of at wholesale trade. It is possible to visualize cases in which the price payable by a wholesaler at the factory gate includes charges and payments which do not enrich or add the value of the product at the time and place of removal. In view of the observations of the Supreme court in paragraph 49 of its judgment in the case of Union of India v. Bombay Tyre International ltd. (supra), the price of an article is related to its value and into that value is added the expenses incurred on account of the factors which have contributed to the value up to the date of the sale. In case the freight is averaged in order to have uniform wholesale cash price at the factory gate and elsewhere, the price charged at the factory gate would be loaded, i. e. the wholesale cash price at the factory gate and at the place of delivery elsewhere made the same. The cost of transportation may be equalised and included and one averaged figure may be added to the priceAccording to the Petitioner, the price list submitted by it mentioned they prices. Only in its subsequent price list dated 6th August 1980 the Petitioner Company had first time filled up the columns relating to other deductions claimed from the price under Section 4 (2) and Section 4 (4) (d) of the Act. According to the Petitioners themselves, since 1968, the Petitioner Companys products were being sold by followingl procedure laid down in Chapter VIIA of the central Excise Rules. In the original Writ Petition the Petitioner Company did not mention the amount of deduction claimed towards freight charges. We have already mentioned that in his orders dated 10th August 1984 and 30th March 1985 the Assistant Collector had, inter alia, held that the Petitioner Company had failed to satisfy him that the Company had incurred transport charges and the same had been added to the wholesale cash prices, on the basis of which excise duties were leviedFrom the extracts of profit and loss account of the Petitioner Company produced before the Excise authorities it is not possible for this Court to say how much of these transport charges were incurred for carriage of the raw materials or of the bread which were not excisable articles. In the above view, it is not possible to hold that upon the material produced before the Central excise authorities the Assistant Collector had committed any error apparent on the face of the record in rejecting the deduction claimed on account of transport and freight charges in order to arrive at the normal wholesale price during the period 1st October 1975 to the date of the issue of the present Rule. We are not inclined to further protract the proceedings by remitting the matter back to the Central Excise authorities. The Petitioner Company has been already given ample opportunity to establish its claim for refund on account of deductions towards transport charges. Under orders of this Court, the Assistant Collector, even after issue of the Rule, twice considered whether the Petitioner Company was entitled to deduction on account of transport charges but had come to the conclusion that the Petitioner Company had failed to prove the same by producing necessary material. Therefore, the matter cannot be again remitted back and the petitioners contention for deduction on account of freight and carriage costs ought to stand rejected( 26 ) THE third head of deduction was the costs of special secondary packing from the assessable value of the biscuits. Under Section 4 (4) (d), the value in relation to excisable articles included the cost of packing except the cost of packing which is of a durable nature and is returnable by the buyer to the assessee. In the present case, the Petitioner Company had initially claimed that some of its manufactured goods were packed materials which were durable in nature and returnable by the buyer. The Petitioner Company failed to prove the same( 32 ) IN our view, the Assistant Collector had rightly rejected the claim for deduction on account of wooden packing used for supply of biscuits to Canteen Stores Department. No particulars of purchase of wood, use of wooden packing and the total quantity of biscuits sold to the Canteen stores Department were placed before the Assistant Collector. Therefore, no sufficient material in this behalf was placed before the Assistant Collector. Upon Appraisal of the evidence, the assistant Collector had rejected the Petitioners claim for deduction on account of wooden boxes( 33 ) IN our view, these findings of fact regarding (i) the nature of packing and (ii) the reasons for such packing cannot be assailed in Writ Court. The Assistant Collector found that the packings in question were necessary for marketing biscuits. The claim of the Petitioner Company to the effect that the wholesalers themselves had made request was not substantiated by evidenceWe are unable to decide the case on the basis of the demonstration given before us about the nature of the packing for sale at the factory gate and elsewhere of the biscuits manufactured by the Petitioner Company. The relevant period of the refund claimed was between 1st October 1975 to the date of filing of the Writ Petition. Secondly, how the biscuits manufactured by the Petitioner Company were despatched upcountry is a matter entirely one of fact. The Petitioner did not place any material before us in order to substantiate its contention. The Collectors finding that the packing in question was normal packing and not additional or special packing is one of fact. As already stated, before filing the Writ Petition, such a claim for deduction on account of special packing charges was not made. Even during the heading of the matter before him, according to the assistant Collector, the evidence adduced was not sufficient to prove the Petitioners claim. The petitioner Companys profit and loss account or the certificate granted by its auditors did not indicate separately the costs of normal packing and the costs of special packing made either at the request of the party or for facilitating delivery in Mofussil. It is not at all clear whether the petitioner Company had claimed deduction of entire packing costs or only the costs of packing in corrugatedboxes. It has been pointed out before us that the sale invoices of the petitioner did not also mention such packingIn the present case before us also, the Assistant Collector found as a fact that secondary packing of the Petitioners biscuits in tin boxes and corrugatedwas not special packing done at the request of the wholesale buyer but was part of the normal packing for marketing these goods. This view about the nature of packing of biscuits is supported by the division Bench decision of this Court in Sathe Biscuits case (supra )( 36 ) FOR the foregoing reasons, we conclude that the Petitioners claim for deduction on account of special packing was rightly rejected by the Assistant Collector. Even if the Petitioners can legitimately contend that the law relating to deduction on account of special packing had developed only after, pronouncements made by the Supreme Court in Bombay Tyre International ltd. s case (supra), the Petitioners must still fail because even after being given further opportunities under the order of the learned Single Judge dated 5th December 1983, the materials produced by them were not believed by the Assistant Collector. In rejecting the petitioners said case regarding special packing, the Assistant Collector did not commit any error of law or fact apparent on the face of the record which would warrant interference under Article 226 of the Constitution. After giving reasons, the Assistant Collector had disbelieved the petitioners case. He found the packings to be normal or usual packings. Therefore, we are unable to interfere with the order of the Assistant Collector rejecting the claim for deduction on account of special packingWe find no substance in the preliminary objection by which, in effect, the learned Counsel attempted to shut out submissions made on behalf of the Respondents. The orders in question of the Assistant collector were quasi judicial in nature. The Assistant Collector had given several reasons in his two orders dated 10th August 1984 and 30th March 1985. Even if it is assumed that some of his reasons are erroneous, in the event this Court is unable to strike down the rest of the reasons contained in the orders of the Assistant Collector, this Court under Article 226 of the constitution cannot quash such quasi judicial order of the Assistant Collector. The Petitioners accordingly are bound to fail. Amongst other reasons, on facts, the Assistant Collector had disbelieved the claim of the Petitioner Company that it had in fact incurred transport costs and that such costs were included in the price charged to its wholesalers. The Assistant Collector also disbelieved that any special packing was used by the Petitioner Company. The secondary packing were found upon the facts to be part of the normal packing for making the petitioner companys goods marketable. These findings were sufficient for rejecting the Petitioners claim for deduction under the heads of freight and transport charges and costs of special packing( 38 ) IN the instant case, by the format order dated 5th December 1983 Pendse, J. had directed the assistant Collector to pass orders subject to final orders of this Court. Therefore, at the final hearing, in order to support the orders passed by the Assistant Collector, the Respondents were entitled to make all appropriate submissions on points of law which did not require further investigation of facts and which related to the question of jurisdiction of the Assistant CollectorWe have already dealt with the decision in godfrey Philips India Ltds case (supra ). Therefore, we consider it unnecessary to separately deal with the decisions which had only applied the law laid down in Godfrey Philips India Ltd. s case (supra) and Madras Rubber Factorys case (supra) to the particular fact( 40 ) IN the above view, we are unable to interfere with the order of the Assistant Collector demanding balance excise duty payable by the Petitioner Company. He has already given credit for deductions to be made on account of freight insurance and surcharge on sale tax. The petitioners have failed to make out any case for refund under any other head. We have already noticed that in the present case the Petitioners ultimately did not urge their claim for refund for any period prior to 1st October 1975. The same isr of a separate Writ Petition. It is, therefore, unnecessary to any longer consider the submission of the learned Counsel on both sides regarding the extent of the Writ Courts power to order refund of duties paid in excess of the amount lawfully recoverable. In the present case, the question of unjust enrichment was not taken in the affidavit. We, therefore, need not decide the said point also.