Law: Central Excise Act, (I of 1944)

Section: 4

[Central Excise Act (I of 1944)].......S 4(2)---Charge of duty on the retail price fixed by the manufacturer---Federal Board of Revenue, in consultation with the Pakistan Beverage Manufacturers' Association, notified the consumer retail price of 250 ML Bottle at Rs.4.50, inclusive of central excise duty and sales tax---On the basis of said notified price, the retail price for the purpose of levy of excise duty worked out to be Rs.3.193 per bottle---Registered person/manufacturer who had paid the excise duty on the basis of Rs.3.83 per bottle for relevant period, objected to the levy of excise duty and sales tax on the basis of agreement between the Central Board of Revenue and the Beverages Manufacturer Association---Under provisions of S.4(2) of Central Excise Act, 1944, fixation of price was the sole prerogative of the manufacturer---One must be aware of the distinction between the consumer price and retail price in case of aerated water---Such distinction of pivotal importance between the controversy leading to the litigation between the taxpayer and the department, stemed from the failure to realize the same in the context of aerated water---Distinction, was attributable to the fact that the condition of aerated water, when it left the manufacturing premises was altogether different from the one in which it was used as an instant drink---Bottles of aerated water, when left the manufacturing premises, were unchilled and were delivered to the retailers in the same condition and it was only at the retail outlets that the process of chilling was performed, whereby the product became ready for consumption i.e. to be used as instant drink---Manufacturer, under the law, was obliged to include only those charges in the retail price as were incurred by him up to the stage when the product was sold to the retailer---Manufacturer could not be compelled to include the cost of those activities in the retail price as were not undertaken by him---Both logically and legally the manufacturer could not be compelled to include cost of an activity which was not performed by him at all---Determination of retail price, was not only the sole prerogative of the manufacturer, and…

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