1. This petition arises out of proceedings under the Central Excises and Salt Act (hereinafter, the Act).
2. The 1st petitioner, Liberty Oil Mills, is a private limited company (hereinafter 'the Company') carrying on business, inter alia, of manufacturing and marketing refined oil and vanaspati. The Company took over a partnership firm M/s. Liberty Oil Mills which firm till its take-over was carrying on the same aforesaid business. This petition was originally filed by the said firm. By amendment, the Company has come on record.
3. At all material times, the Company manufactured and marketed vanaspati under the brand name 'CHANDA'. According to the Company, this product is manufactured in bulk and thereafter filled in tin containers labelled with the brand name 'CHANDA'. These containers are then sealed and packed and are then transported to wholesale buyers who, in their turn, sell them in retail to consumers. According to the Company, the product is sold in the course of wholesale trade in the ordinary course of wholesale trade to independent purchasers on a principal to principal basis, with price as the sole and only consideration for such sale. As per further averment in the petition, the prince is a composite for such sale. As per further averment in the petition, the price is a composite and integrated price covering manufacturing costs and manufacturing profits as also the post-manufacturing costs and selling profits. The Company incurs expenses for tin containers, miscellaneous packing material, filling charges and other charges.
4. The Company wrote (vide Exhibit A) to the Collector of Central Excise that it was entitled to refund of excess duty paid. But this was of o avail. Hence this petition. The reliefs claimed are mainly (a) on order restraining the respondents from charging excise duty on price inclusive of post-manufacturing expenses and profits and (b) an order permitting the Company to clear the product on payment of excise duty on a price excluding therefrom post-manufacturing expenses and profits.
5. Hearing Mr. Krishnamurthy, learned Counsel for the petitioners and Mr. Sethna, learned Counsel for the respondents, and going through the averments in the petition, I find the questions here squarely covered by the judgment of the Supreme Court in what has now come to be known as the 'P.M. E.' case : : 1983ECR653D(SC) . In view thereof, the contention that the Company is entitled to deduct post-manufacturing expenses, as those incurred and averred as per paragraph 6 of the petition, has no longer any surviving merits therein.
6. It is also relevant to note that neither in its detail letter (Exhibit A) to the Collector of Central Excise nor even in this petition is there any case made out that tin containers here are returnable within the meaning of Section 4(4)(d)(i) of the Act and, therefore, its cost was liable to be excluded from the assessable value. However, when this petition reached hearing today, Mr. Krishnamurthy, learned Counsel for the Company, sought leave to amend the petition by raising a contention to the effect that the tin containers in question were durable and returnable and further that this return ability was as a matter of contract between the parties. For reasons more than one, I am not inclined to grant the request for amendment. In the first place, the amendment was sought for only orally by producing across the Bar what purports to be an ordinary copy of a circular dated 15th November 1978 by the marketing officer of the Company to its stockists, dealers, and wholesalers. No proper procedure is followed in this behalf. Secondly, this circular itself speaks :
(i) 'Currently there is a cute shortage of tin plates;'
(ii) '.... currently the containers are being reused by many packers specially those packing groundnut oil.'
(iii) 'We have, therefore, decided to offer a price of Rs. 7.75 per tin to those of our stockists who will return the container after emptying out the contents. :
(iv) 'The payment for returned containers will be effected to you as soon as quality of the used container at our factory is approved.'
Thus, such circular issued in the context of the then current shortage and in the form of a mere offer and that too hedged in with conditions, cannot establish what is now sought to be made out viz., that the tin contains are returnable by the buyer to the assessee within the meaning of Section 4(4)(d)(i) of the Act. It is also significant that though this petition was filed in February 1982 more than three and a half years after the above circular, the same is nowhere disclosed or not even barely referred to in the petition. Even during the course of the last nearly two and a half years that this petition is pending, no effort was made to make out, albeit even by amendment, a case of returnability. A 1978 circular sees the light of the day in this latter half of 1984. The whole exercise now sought to be entered into at the final hearing of this petition is one in futility. Impression gained is akin to a drowning man holding at the last straw.
7. Still further, the law as it stood since several years prior to the filing of this petition and all throughout thereafter till now was and is that value in relation to any excisable goods, where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. Vide Section 4(4)(d)(i) of the Act. In spite of this position thus subsisting for several years, one does not find any case even made out in the petition that the packing here involved was, apart from being durable, also returnable. Submission now made that the need for such amendment arises in view of a Division Bench ruling of this Court in Sathe Biscuits and Chocolate Co. Ltd. v. The Union of India, (Writ Petition No. 1384 of 1983, decided on 20th February 1984) = 1984 (17) E.L.T. 039 (Bom.) has also no merits because the said ruling only interpreted the already existing condition 'returnable' under Section 4(4)(d)(i) of the Act as meaning returnable as a matter of contract. In this petition there is initially itself no case at all of the packing being returnable. In the absence of any such case, the question whether it was so returnable as a matter of contract or otherwise does not survive. For all these reasons I am not at all satisfied that the amendment now sought for is bona fide. The request deserves to be and is rejected also on the ground that it comes too late in the day and at a grossly belated stage of the proceedings.
8. In the result, this petition fails and the same is dismissed. Rule stands discharged. In the circumstances of the case, however, there will be no order as to costs.
9. Interim order dated 5th March 1982 stands vacated. Respondents will be at liberty to enforce the bank guarantees as also to commence recovery proceedings for the differential duty in pursuance of the demands made from time to time.
10. At the request of Mr. Kishnamurthy, learned Counsel for the petitioners, bank guarantees not to be enforced till and inclusive of 31st August, 1984.