Law:

Section:

Keywords: Costs, Set Aside, Government, Evidence, Imposition, Finance, Limited Company, Contentions, Production, Incapable, Rate Of Duty, Goods, Order, Division, Constitution, Levy, Notification, Manufacture, Contract, Place, Petition, Refund, High Court, Certificate Result: Appeal allowed with costs JUDGMENT PATHAK, J.-1. This appeal by certificate granted by the High Court of Allahabad raises the question whether the manufacture of aluminium cans or torch bodies is liable to excise duty under Entry 27(e) of the First Schedule to the Central Excises and Salt Act, 1944. 2. The appellant, Union Carbide India Limited, is a public limited company and carries on the business of the manufacture and sale of flashlights (torches), dry cell batteries, chemicals and plastics. The flashlights are manufactured by one of its Divisions, the Eveready Flashlight Company, Lucknow. The appellant purchases aluminium slugs from the manufacturers of aluminium in India and produces aluminium cans or torch bodies at its factory by a process of extrusion. Before March 1, 1970 aluminium cans were subjected to basic excise duty at 20 per cent ad valorem plus special duly at 20 per cent of the basic duty on a value of Rs. 8,600/- per metric tonne fixed as the tariff value by the Government of India by a Notification dated January 21, 1969. By an amendment incorporated in the Finance Act 1970 with effect from March 1,1970 the basic duty was fixed at 25 per cent ad valorem plus special duty at 20 per cent of the basic duty. By Notification- No. 65/70 dated March 1, 1970 the Notification of January 21, 1969 was rescinded. 3. The appellant received a letter dated March 3, 1970 from the Superintendent of Central Excise, Lucknow stating that the tariff rate of duty on extruded shapes and sections of aluminium had been raised and that aluminium cans would be subjected to duty on ad valorem basis on the value as determined under section 4 of the Act, and that the appellant should send price lists for approval. The appellant, anxious to avoid coercive action, filed price declarations in which the price of aluminium cans was calculated as the cost of production plus a margin of profit of 5 per…

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