S.H. Kapadia, J.

1. Doubting the correctness of a two-Judge Bench decision of this Court in the case of Commissioner of Central Excise, Meerut v. Kisan Sahkari Chinni Mills Ltd., 2001 (79) ECC 236 (SC) : 2001 (132) ELT 523 (SC), a Division Bench of this Court has referred the matter to a three-Judge Bench.

2. Since common question of law and fact arises in these appeals before us, the same are disposed of by this common judgment. However, for the sake of convenience we quote hereinbelow the facts in Civil Appeal No. 7488-7492 of 2001.

POINTS FOR DETERMINATION

3. It is convenient to set out, at the outset, the question involved in these appeals. That question is: whether administrative charge collected by the sugar factory for molasses sold from the buyers/allottees on behalf of the State Government in terms of Section 8(5) of the U.P. Sheera Niyantran Adhiniyam, 1964 (hereinafter referred to as "the U.P. Act") constituted a duty or impost in the nature of a tax and consequently not includible in the value as defined in terms of Section 4(4)(d)(ii) of Central Excise Act, 1944 (hereinafter referred to as "the Act").

BACKGROUND FACTS

4. M/s. Chhata Sugar Company Ltd. Tehsil -- Chhata District -- Mathura, U.P. (hereinafter referred to as `the assessee) is engaged in the manufacture and clearance of molasses falling under tariff item No. 1703.10. The assessee is registered with the Department under Rule 174 of Central Excise Rules, 1944. While determining the assessable value of molasses for computing central excise duty, the assessee did not include administrative charges collected from the buyer at Rs. 10 per quintal on behalf of the State Government under the provisions of the U.P. Act. Accordingly, demands show cause notices were issued under the Central Excise Act for alleged contravention of Section 4 of the Act read with Rules 9 and 173G of the Central Excise Rules, 1944. The Assistant Commissioner, Central Excise, Aligarh confirmed the demands holding that the administrative charges are includible in the value on the ground that these administrative charges are not a tax but they are in the nature of fees. The order of the Assistant Commissioner however was set aside by the Commissioner (Appeals), Central Excise, Allahabad vide order dated 14th May, 1998. Being aggrieved, the Department preferred an appeal before the Customs, Excise and Gold Control (Appellate) Tribunal (CEGAT), New Delhi. However, CEGAT vide impugned judgment and order dated 27th July, 1999, rejected the appeal holding that the said administrative charge was a tax and it was not includable in the assessable value in terms of Section 4(4)(d)(ii) of the Act by placing reliance on the judgment of this Court in the case of D.G. Gose & Co. (Agents) (P) Ltd. v. State of Kerala, (1980) 2 SCC 410. Against the impugned judgment, the revenue has come by way of appeal to this Court under Section 35L of the Central Excise and Salt Act, 1944.

ANALYSIS OF THE CENTRAL EXCISE ACT, 1944 & U.P. ADHINIYAM, 1964

5. In order to answer the point at issue one has to analyse the relevant provisions of Central Excise Act, 1944 (as it stood at the relevant time). We quote hereinbelow Section 4 of the said Act:

"4. Valuation of excisable goods for purpose of charging of duty of Excise. -- (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value, shall, subject to the other provisions of this section, be deemed to be--

(a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of the removal, where the buyer is not a related person and the price is the sole consideration for the sale:

Provided that--

(i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each s