Messrs SIMPSON WIRE (PVT.) LTD., KARACHI VS COLLECTOR OF CUSTOM, SALES TAX AND CENTRAL EXCISE (ADJUDICATION), KARACHI-III, KARACHI, 2006 PTD-KARACHI-HIGH-COURT-SINDH 700 (2006)

(a) Central Excise Act (I of 1944)---

----S.4(2)---S.R.O. 546(I)/94 dated 9-6-1994---Determination of value for the purposes of excise duty---Condition laid down in S.4(2) Central Excise Act, 1944 had to be fulfilled for availing the concession granted in S.R.O. 546(I)/94 dated 9-6-1994---Principles stated.

If the wholesale cash price of the goods are taken as retail price under the cover of section 4(2) of the Central Excise Act for availing the benefit of S.R.O. 546(I)/94 issued under section 4(2) of the Act then the condition laid down in section 4(2) of the Act had to be fulfilled for availing the concession granted in S.R.O. 546(I)/94. Bear reading of section 4(2) of Central Excise Act shows that it imposes conditions that the retail price of the product should be legible, prominently and indelibly printed or embossed on each article, packet, container, package cover or label as the case may be. If the retail price was neither printed nor embossed on the packets or container whatever that was the manufacturer, who was supplying his product to a general body of consumers, whether they belonged to the class of consumers in open market or to a particular class of industries, had to pay excise duty at 10% on retail price basis. Because once the manufacturer had cleared the goods on, retail price then he was bound to pay all charges and taxes as envisaged in section 4(2) of Central Excise Act, if condition for availing the exemption granted under S.P O. 546(I)/94 issued under section 4(2) of Act was not fulfilled.

(b) Central Excise Act (I of 1944)---

----Appeal to High Court---Question of limitation having not been taken up before the Tribunal nor indicated in the memo of appeal, could not be allowed to be raised during the course of arguments before the High Court.

Amir Raza Naqvi for Appellant.

Raja M. Iqbal for Respondent No. 3.

Date of hearing: 17th November, 2005.

JUDGMENT

MRS. YASMIN ABBASEY, J.-This appeal is directed against the order dated 4-12-2001 passed in C.E. Appeal No.304 of 2000. By which, appeal of appellant before Central Excise, Sales Tax Appellate Tribunal, Karachi Bench, was dismissed holding that Paints and Varnish manufactured by the appellants, falling under Central Excise Tariff Heading 3200, are chargeable to Central Excise Duty at 10% on retail price basis, contrary to the appellant's case of whole sale cash price deemed to be the retail price.

2. It is pleaded by Mr. Amir Raza Naqvi, learned counsel for appellants that appellants. are manufacturing above referred product since 1993-94, but for the first time in 1997 objection of short payment of C.E. Duty at the rate of 10% of retail price was raised through S.C.N. dated 10-7-1999. According to learned counsel for appellants this. assessment of goods under section 4(2) of the Central Excise Duty is not in accordance with law as the product manufactured by appellants is not sold in open market, but is supplied to industrial units being the sole consumer of the product falling under section 4(1) of Central Excise Act chargeable at wholesale cash price, where the article is chargeable with duty at a rate dependent on the value of the article. It is contended by learned counsel that as there is no general sale of the product in market therefore wholesale cash price will be deemed to be the retail price but as the paints and varnish listed in S.R.O. 546(I)/94, dated 9-6-1994 are neither electrical grade nor exemption on their raw material is allowed under the S.R.O. therefore these products will not be covered under retail price system for levy of duty at 10% under Central Excise Tariff Heading 3208.00. These two fold arguments of learned counsel are ambivalent at the one hand by taking the products under whole sale cash price he wants to take them out of the ambit of retail price where duty is chargeable inclusive of all charges and taxes including:---

(a) Central Excise Duty, Product Cost, Sale Tax,

(b) Trade Margin,

(c) Cost of Manufacturer,

(d) Commission of the distributor,

(e) Commission of the whole seller,

(f) Commission of the retailer.

(g) Transportation charges and storage charges,

(h) Loading and unloading charges.

3. Whereas on the other hand for taking benefit of S.R.O. 546(I)/94 he has come up with the plea that as products are not sold in open market therefore whole sale cash price of them will be deemed to be the retail price. Anyhow even if this contention of learned counsel is taken into consideration then it is mandatory requirement of law that it should be strictly implemented in the way as drafted and legislated otherwise the purpose of the same will be frustrated. So if the wholesale cash price of impugned goods are taken as retail price under the cover of section 4(2) of the Central Excise Act for availing the benefit of S.R.O. 546(I)/94 issued under section 4(2) of ibid Act then the condition laid down in section 4(2) of the Act had to be fulfilled for availing the concession granted in S.R.O. 546(I)/94. Bare reading of section 4(2) of Central Excise Act shows that it imposes conditions that the retail price of the product should be legible, prominently and 'indelibly printed or embossed on each article, packet, container, package cover or label as the case may be, whereas in the present case admitted the retail price was neither printed nor embossed on the packets or container whatever that was. Hence under these circumstances we find that appellant who was supplying his product to a general body of consumers, either they belonged to the class of consumers in open market or to a particular class of industries, has to pay excise duty at 10% on retail price basis. Because once he had cleared the goods on retail price then he is bound to pay all charges and taxes as envisaged in section 4(2) of Central Excise Act, if condition for availing the exemption granted under S.R.O. 546(I)/94 issued under section 4(2) of ibid Act is not fulfilled.

5. (sic) During the course of argument it is further pleaded by learned counsel for the appellant that the show-cause notice issued on 10-7-1999 for the period from 1993 to. 1997 is time-barred therefore all subsequent proceedings have no substance in the eye-of-law but this plea of time-barred show-cause notice taken up by appellant at this stage has been objected by learned counsel for respondent with reference to the observation made in 2003 PTD 1899 that:

" It is settled law that only a question of law arising out of the order passed by the Tribunal under section 35(c) of the said Act can be raised in the appeal before the High Court under section 36(c) of the Central Excise Act, 1944 and if no such question was raised before the Tribunal, it cannot be raised before the High Court in special excise appeal. The proposition raised by the learned counsel on the strength of law laid down by this Court in Muhammad Buta v. Habib Ahmed PLD 1985 SC 153 that if the question of limitation is not a mixed question of law and fact, notwithstanding the waiver of such question by the parties, the Court must take notice of the question of limitation, is not disputable. However, in view of the distinguishable facts, the judgment referred to above is not applicable in the present case. The petitioner having taken the question of limitation in the grounds of appeal, did not press the same before the Tribunal and further also did not raise it in the appeal filed by him in the High Court under section 36(c) of the Central Excise Act, 1944. We find that it was a conscious waiver, therefore, was not required to be considered. The contention of the learned counsel relating to the question of limitation is, therefore, repelled."

So is in the present case, the contents of impugned judgments that of Collector of Customs Sales Tax and Central Excise (Adjudication) and of Customs, Excise and Sales Tax Appellate Tribunal passed on 28-9-2000 and 4-12-2001 respectively does not disclose that any such plea of limitation was ever taken up before them at any stage. So also the memo of present appeal is silent in this regard. Therefore all of a sudden to come up with this ground during the course of argument is not warranted under section 36(c) of ibid Act as it only speaks about the question of law arising out of an order under section 35(c) of Customs Act.

6. In view of the foregoing reasons, we find no merits in the appeal, which is accordingly dismissed.

M.B.A./S-10/KAppeal dismissed.