D.R. Dhanuka, J.
1. By this petition filed under Article 226 of the Constitution of India, the petitioners have impugned the order dated 31st May, 1991 passed by the Assistant Collector of Central Excise, Division Panaji, Goa, copy whereof is Exhibit 'A' to the petition. By the said impugned order, the Assistant Collector of Central Excise, Panaji-Goa (Division), has rejected the price lists No. 101/90-91 and No. 102/90-91 on the grounds set out in the impugned order. The petitioners have also sought issue of a writ of mandamus or a writ in the nature of mandamus or any other writ or direction directing the respondents to refund to the petitioners the excise duty collected from the petitioners on the footing of the impugned order in the sum of Rs. 12,81,727.08 p. together with interest.
2. The petitioners are manufacturers of excisable goods falling under chapter heading 3307 and 3304 of the Central Excise Tariff, 1895. The petitioners supply their products to wholesale dealers in various States throughout India.
3. The petitioners have averred in the petition that their products referred to in the price lists No. 100/90-91, 101/90-91 and 102/90-91 attract varying of sales tax in different States varying between 6% and 21%. The petitioners have further averred that the petitioners are therefore required to give regional discounts i.e. quantity discounts to their wholesale buyers at the varying rates while selling their products to them in different States in order to ensure as far as possible equal margin of profit to all the wholesale dealers in various States.
4. On 25th May, 1990, the Ministry of Food & Civil Supplies issued a Notification bearing No. G.S.R. 511(E) under section 83 of the Standards of Weights & Measures Act, 1976. By reason of applicability of the said Notification, the petitioners are required to print on the packages of the items marketed by the petitioners, the 'maximum retail price .......... inclusive of all taxes'. The prices are required to be printed on the packages of the articles like Lather Shaving Cream, inclusive of all taxes. The rates of sales tax differ in different States varying between 6% and 21%.
5. By various letters addressed by the petitioners to the Excise Authorities like letters dated 10th August, 1990 and 19th September, 1990, the petitioners explained the scheme of varying regional discount provided by the petitioners to their wholesale dealers in different States depending upon the rate of sales tax prevailing in the State concerned so as to ensure charging of reasonable market price to their wholesale dealers.
6. On 10th October, 1990, the petitioners filed three different price lists with the Assistant Collector of Central Excise copies whereof are annexed as Exhibits 'C', 'D' and 'E' to the petition. The said price lists were numbered as price lists No. 100/90-91, 101/90-91 and 102/90-91. In the first price list i.e. price list bearing No. 100/90-91, it was stated that the said price list was meant to operate only in the States of Delhi, Himachal Pradesh, Meghalaya, Tamil Nadu, West Bengal, Chandigarh, Punjab, Jammu & Kashmir, Bihar, Haryana, Tripura, Assam, Goa, Maharashtra (excluding Bombay) etc. as more particularly only set out therein. The said price lists indicate that the petitioners had formulated a scheme under which the petitioners had undertaken to supply on article free on the wholesale dealer purchasing 23 items of the specified article from the petitioners. The said price list was duly approved by the Assistant Collector of Central Excise. In the price list No. 101/90-91, it was stated that the said price list was applicable to the State of Gujarat only. The said price list discloses a scheme of regional discount on the footing of supply of two articles of the specified items free on the wholesale dealer purchasing ten of the specified items. In the price list No. 102/90-91, it was stated that the said price list was applicable to the States specified therein. The said price list discloses the scheme of the petitioners to supply one article free on the wholesale dealer purchasing eleven of the specified articles. The petitioners have explained through out during the course of the correspondence addressed to the Assistant Collector of Central Excise as well as by making averments in this petition that the said scheme was formulated in order to provide regional discounts to the wholesale dealers purchasing various items of goods from the petitioners in different States only because the rates of sales tax differing in these States varying between 6% to 21% i.e. for commercial and business consideration in order to ensure almost equal margin of profits to all the dealers throughout India. The petitioners have also set out in the various letters as well as in the petition, that the wholesale dealers purchasing the above referred articles from the petitioner-manufacturers were obliged to charge maximum retail price on the footing of uniformity in accordance with their obligations under the Notification dated 25th May, 1990 referred to hereinabove. The petitioners have therefore explained that in case the petitioners were not to provide any regional discount to their wholesale dealers, the wholesale dealers in the States where the rate of sales tax was much more, could be completely crippled in their business as they would be nevertheless bound to charge uniform retail price to their customers i.e. only to the extent of uniform maximum retail price as notified on the articles.
7. On 14th November, 1990, the Central Excise, Panaji, Goa, issued a Show Cause Notice to the petitioners presumably under the authority of the Assistant Collector of Central Excise, calling upon the petitioners to show cause as to why price lists No. 101/90-91 & 102/90-91 should not be rejected. It was observed in the said Show Cause Notice that there could not be more than one assessable value for a product in the same conditions.
8. By letter dated 22nd November, 1990, the petitioners furnished their detailed reply to the Assistant Collector of Central Excise in response to the said Show Cause Notice. In the said reply the petitioners set out that the petitioners had no choice but to provide for discounts at varying rates to their wholesale customers in different States in view of the variance in the rates of local sales tax in the different States. As regards the basic contention in the Show Cause Notice dated 14th November, 1990, is concerned, the petitioners submitted in their above referred reply that there need not be uniformity of assessable value & the award of regional discounts by the petitioner could vary from State to State depending upon the facts and circumstances of the case.
9. By letter dated 6th February, 1991, the petitioners submitted their supplementary reply to the Assistant Collector of Central Excise.
10. On 14th February, 1991, the Assistant Collector of Central Excise granted personal hearing to the petitioners in reply to the above-referred Show Cause Notice. At the said hearing, the petitioners were represented by Senior Counsel & by the authorised representatives of the petitioners. The written note of arguments urged at the hearing of the said Show Cause Notice held on 14th February, 1991 was filed with the Assistant Collector of Central Excise by letter dated 18th February, 1991.
11. It is obvious from the said letter dated 18th February, 1991 that the petitioners had raised all the contentions in reply to the Show Cause Notice as are now urged at the hearing of this writ petition.
12. By the impugned order dated 31st May, 1991, the Assistant Collector of Central Excise rejected the price lists No. 101/90-91 and No. 102/90-91. The Assistant Collector of Central Excise referred to the claim made by the petitioners for deduction on account of trade discount (i.e. quantity discount) & rejected the said claim. The Assistant Collector of Central Excise inter alia observed in the impugned order as under:-
'However, they have claimed different assessable values due to grant of different rates of trade discount which are admissible deduction. In other words they contended that normal price referred to in section 4(1)(a) is the price declared in Col. No. 3 of the price list and not the assessable value shown in Col. No. 11 of the price list. They contended that assessable value may vary as per the deduction claimed.'
While dealing with this contention the Assistant Collector of Central Excise held that the normal price referred to in section 4(1)(a) was nothing but assessable value and region wise discounts were not permissible as claimed by the petitioners. The Assistant Collector of Central Excise held that there could not exist two prices under section 4(1)(a) of the Act.
13. During the course of hearing before the Assistant Collector of Central Excise the petitioners relied on the judgment of a Single Judge of this Court in the case of Music India Ltd. & anr. v. Union of India & ors., reported in : 1987(1)BomCR8 . The said judgment is directly on the point and is of considerable assistance to the petitioners. In this case Pendse, J., as he then was, held that the regional discount was allowable deduction for computation of the assessable value for the purpose of excise duty. In para 4 of the said judgment it was also observed that it was the claim of the petitioners in that case that discount was given by the manufacturer to wholesale dealers to maintain parity of prices as the local taxes in certain areas were very high. The learned Judge also referred to and relied upon the judgment of the Supreme Court in the case of Union of India & ors. v. Bombay Tyres International Pvt. Ltd., reported in 1984 E.L.T. 329. In the above referred judgment of the Supreme Court, the Supreme Court had clearly observed that while ascertaining the assessable value discount allowed in the trade should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreement or under terms of sale or by established practice. It is of considerable significance that Pendse, J., relied on the decision of the Gujarat High Court in the case of Gujarat State Fertilisers Co. Ltd. v. Union of India & ors., reported in 1980 E.L.T. 397 (Guj.). The learned Judge observed that the reliance by the learned Counsel for the assessee on the decision of the Gujarat High Court in the case of Gujarat State Fertilisers Co. Ltd. was appropriate. The learned Judge therefore held that the petitioners were entitled to claim deduction of the value of regional discount given while ascertaining the assessable value for the purpose of excise duty. It is very clear that the law makes distinction between 'normal price' (the said expression having been used in section 4(1) of the Central Excises and Salt Act, 1944) and the 'assessable value' required to be computed after making permissible deductions for the purpose of levy of excise duty. The learned Judge directed the Assistant Collector of Central Excise to determine the assessable value of the goods manufactured by the petitioners in that petition by deducting the value of secondary packing, regional discount, cash discount, etc.
14. It is unfortunate that the respondent No. 2 decided not to follow the ratio of the said binding decision merely on the ground that according to the information made available to him, an appeal was filed against the said decision before the Division Bench of the High Court. Even if an appeal was in fact filed by the department against the decision of the Single Judge of the High Court, the Assistant Collector of Central Excise was not entitled to ignore the ratio of the binding decision of the High Court. The learned Counsel for the petitioners submits that according to the search taken by the petitioners, no such appeal was filed. It is however not necessary to examine this aspect. The fact remains that the impugned order suffers from error apparent on the face of the record insofar as it ignores the ratio of the binding decision of this Court.
15. The impugned order is thus unsatisfactory. It is mentioned in the impugned order that the respondent No. 2 had taken the view which he took relying on the judgment of the Single Judge of the High Court of Bombay another case i.e. in the case of Godrej and Boyce . Bombay, & anr. v. Union of India & ors., reported in : 1984(18)ELT172(Bom) . In this case the only question before the Court was as to whether the cost of special secondary packing was excludable from assessable value. It is not disputed and it is not disputable that the said judgment was set aside by the Supreme Court by its order passed in Special Leave Petition No. 14564 of 1987 and the proceedings were remanded to the High Court. The Court is informed that the Writ Petition No. 1110 of 1983 which was the subject matter of the above referred decision before the High Court was ultimately withdrawn on the same being remanded by the Supreme Court. In our opinion, the respondent No. 2 was not justified in relying upon the above referred decision of this Court reported in : 1984(18)ELT172(Bom) particularly when there was a direct decision of this Court on the issue of 'regional discount' in the case of Music India Ltd. (supra) The said decision was not relevant for purpose of deciding the controversy herein.
16. The learned Counsel for the petitioners has invited the attention of the Court to the judgment of the High Court of Gujarat in the case of Gujarat State Fertilisers Co. Ltd. v. Union of India & ors. (supra cited). The ratio of this judgment is in terms approved by the Supreme Court by its recent judgment dated 10th January, 1995 in the case of Metal Box India Ltd. v. Collector of Central Excise, Madras, reported in : 1995ECR625(SC)
17. In the above referred judgment of the High Court of Gujarat it was in terms held that in the very nature of things, trade discount must be deducted while computing the assessable value & such trade discount need not be uniform. In para 17 of the judgment of the High Court of Gujarat referred to hereinabove, P.D. Desai, J., as he then was, observed on behalf of the Division Bench of the Court that the fact that a trade discount was not uniformly given or was given at different rates to different purchasers, could not by itself disqualify it from being excluded for arriving at the trade assessable value so long as the lack of uniformity was not founded on extra-commercial considerations.
18. It is time to ascertain the ratio of the judgment of the Supreme Court in the case of Metal Box India Ltd. v. Collector of Central Excise, Madras, reported in : 1995ECR625(SC) . In our opinion the ratio of this judgment concludes the basic controversy arising in this writ petition in favour of the petitioner and against the Revenue. In para 13 of the said judgment, Majmudar, J., speaking for the Apex Court observed that the Division Bench of the High Court of Gujarat had correctly interpreted the scope of section 4 of the Central Excise Act. The relevant portion of the said judgment reads as under :-
'The Division Bench of the Gujarat High Court consisting of P.D. Desai and G.T. Nanavati, JJ., interpreting the scope of section 4 of the Act laid down that section 4 of the Central Excise Act does not in terms enact the trade discount in order to qualify for deduction thereunder should be on a uniform basis to all wholesale purchasers at the factory gate. Any such view would require the addition of the word 'uniform' before 'trade discount' occurring in section 4 which is not evidently permissible. Nor it would be advisable to read the requirement of uniformity even by implication. Even if trade discount is not uniformly given or is given at different rates to different purchasers, it cannot by itself disqualify it from being excluded for arriving at the assessable value so long as the lack of uniformity is not founded on any extra-commercial considerations.'
Having regard to the ratio of the judgments of the High Court of Gujarat & Bombay and our High Court in the case of Music India Ltd. & anr. v. Union of India & ors., reported in : 1987(1)BomCR8 and the ratio of the judgment of the High Court of Gujarat in the case of Gujarat State Fertilisers Co. Ltd. v. Union of India & ors., reported in 1980 E.L.T. 397 (Guj.) and the law declared by the Supreme Court in the case of Metal Box India Ltd. (supra), we have no hesitation in reaching the conclusion that the impugned order passed by the respondent No. 2 suffers from error of law apparent on the face of the record and the same is liable to be quashed and set aside by issue of a writ of certiorari. We accordingly quash the impugned order dated 31st May, 1991, issued by the respondent No. 2.
19. Two more questions however arise for consideration of the Court as indicated below:-
The first question which arises for consideration of the Court is as to whether the Court should issue a writ of mandamus directing the respondents to approve the price lists bearing No. 101/90-91 and 102/90-91 or whether the Court should remand the proceedings to the respondent No. 2 for reconsidering the said price lists in the light of the principles of law laid down in the above referred three decisions.
20. Mr. Khandeparkar, the learned Counsel for the Revenue, has submitted that the proceedings concerning approval of the above referred price lists should be remanded to the respondent No. 2 for the purpose of considering the factual aspect of the case. i.e. as to whether the varying rates of regional discount were fixed by the petitioners on extra-commercial considerations or whether the varying rates of discount were fixed in the light of proper commercial considerations or whether the rate of sales tax on the products in question differed in various States. The learned Counsel for the Revenue has submitted that the respondent No. 2 did not apply his mind to the question as to whether the rate of local sales tax applicable to the articles in question in different States really varied between 6% and 21% as contended by the petitioners. The learned Counsel for the Revenue submitted that the Department must have an opportunity to examine the above referred factual aspect in the proceedings on remand since it has now been laid down by the Supreme Court that regional discount can be provided by the manufacturers to wholesale dealers at varying rates and the same need not be on uniform basis. The learned Counsel for the petitioners Shri Hidayatullah has opposed the application for remand of the proceedings to respondent No. 2 at this stage & has invited the attention of the Court to the factual material on record of this case as well as the operative part of the order passed by the High Court of Gujarat in the case of Gujarat State Fertilisers Co. Ltd. (supra cited). In the said Gujarat case approved by the Supreme Court, the Gujarat High Court had not merely quashed the impugned decision, but had directed the Excise Authorities to approve the price lists & to assess excise duty in the light of the observations made in the said judgment. This Court ought not to pass an unnecessary order of remand as passing of unnecessary order of remand is bound to lead to further protracted litigation and prolonged proceedings in future. At the same time if an order of remand is necessary in the interests of justice, the Court should not hesitate to pass an order of remand even if implementation of the order of remand would cause some delay. We have to bear the above referred principles in mind while deciding the rival contentions made at the Bar on this aspect of the matter.
21. The petitioners have specifically stated on oath in the petition i.e. in para 4(c) of the petition that their products attract different rates of sales tax in different States varying between 6% and 21% and the said varying rate of local taxes is the paramount commercial consideration for fixation of varying rates of regional discount. No counter affidavit is filed on behalf of the Revenue. Not merely that, but the petitioners had raised this contention before the respondent No. 2 while replying to the Show Cause Notice as well as during the course of written arguments submitted to the respondent No. 2 by letter dated 18th February, 1991. The petitioners had also raised the same plea based on the same data by their letters dated 10th August, 1990 & 19th September, 1990 referred to in paras 10 and 11 of the written arguments submitted by the petitioners to the respondent No. 2 by letter dated 18th February, 1991. Prima facie the averments made in para 4(c) of the petition are believable. The variation in the rate of regional discount is not so much that one can doubt the correctness of the averments made in the petition or in the price list or in the correspondence or in the reply to the Show Cause Notice. After giving our anxious consideration we have reached the conclusion that no useful purpose shall be served by remanding the proceedings to the respondent No. 2 at this stage as far as these two price lists i.e. price list No. 101/90-91 and No. 102/90-91 are concerned. It shall be open to the Excise Authorities to hold detailed factual inquiry in some other proceedings unconnected with the specific price lists which alone are subject matter of this petition , if the Department so desires.
22 This disposes of the above referred controversy. We are not inclined to make an order of remand in this case at this stage having regard to the facts set out hereinabove.
23. By prayer (b) of the petition the petitioners have sought an order for refund of duty collected in the sum of Rs. 12,81,727.08 p. alongwith interest. By the Central Excise And Customs Laws (Amendment) Act, 1991, i.e. Act No. 40 of 1991, section 11-B of the Central Excises and Salt Act, 1944 was amended. All applications for refund of excise duty are required to be decided in conformity with the provisions of law contained in section 11-B of the said Act as amended. As & when the applications for refund are made or is decided by the Central Excise Authorities, it shall have to be considered as to whether the assessee had passed on the incidence of duty in respect of refund claimed to any other person. Thus, it is not possible for this Court to issue a writ of mandamus directing the respondents to refund the above referred amount straightaway. It shall be open to the petitioners to make necessary application for refund to the competent authority in accordance with law. If such an application is made, the same shall be dealt with by the Central Excise Authorities in accordance with law as expeditiously as possible. It is not required to be stated that the Supreme Court has already held that the provisions of section 11-B of the said Act as amended are retrospective in operation. The Central Excise authority shall have to bear in mind the provisions of the said Act as amended while considering the applications for refund.
24. The Rule is made absolute in terms of prayer (a) of the petition. Prayer (b) of the petition consists of two parts. Prayer (b) (i) of the petition does not survive in view of prayer (a) having been granted. Prayer (b)(ii) of the petition is rejected with liberty to the petitioner to make an application for refund to the appropriate authority in accordance with law, as indicated above. We also do issue the writ of mandamus directing the respondents to approve the price lists bearing No. 101/90-91 & No. 102/90-91 in view of the fact that there appears to be no dispute in respect of the said price lists between the assessee & the Revenue apart from the disputes which are now resolved by the judgment of the Court as set out hereabove. The respondents shall comply with the writ of mandamus issued by this Court within eight weeks from today. Having regard to the facts and circumstances of the case there shall be no order as to cost of this petition.