Excise duty is leviable only on the manufacturing cost of the goods and not on the value of the containers supplied free of charge by the Railways.

( 1 ) THE facts involved in the present application lie within a very narrow compass. The petitioners are the manufacturers of electric storage batteries which are supplied to the Railways and are known as Train lighting cells. The process of manufacture with which we are concerned in. this Rule admittedly is that the containers for these batteries are supplied by the Railway Authorities to the petitioner and then they are recharged and sold to the Railways. In the bills which have been annexed to the petition, the price of the batteries, which have been sold, has been shown as Rs. 291. A rebate has been given of Rs. 50 to the Railways for the containers. In the past, the Excise Authorities had been charging duty on the basis that the value of the articles were Rs. 241. Thereafter, the Excise Authorities were of the view that this Rs. 50 is also a part of the excisable cost with respect to the transaction and demand was made for differential duty on the basis thereof.

( 2 ) BEING aggrieved by the demand, the petitioner went upon appeal and succeeded before the Appellate Authority. On revision, however, the Revisional Authority took a different view and upheld the order of the Assistant Collector of Central Excise and set aside the order of the Appellate Collector of Central Excise.

( 3 ) THIS order has been challenged before me in this application. The impugned order itself proceeds on the basis that the containers for the batteries which are ultimately sold to the Railways are supplied by the Railway to the petitioner free of cost. In other words, no cost is incurred by the petitioner on account of containers in the process of manufacture of these articles.

( 4 ) MR. Somnath Chatterjee, learned Counsel appearing for the petitioner, draws my attention to the decision of the Supreme Court in the case of A. K. Roy vs. Voltas Ltd. At paragraph 22 of the Report, the Supreme Court observes as follows ;"excise is a tax on the production and manufacture of goods (. . .) Section 4 of the Act, therefore, provides that the real value should be found after deduction of the selling cost and selling profit and that the real value can include only the manufacturing cost and manufacturing profit. The section makes it clear that excise is levied only on the amount representing the manufacturing cost. . . . "therefore, according to Mr. Chatterjee, excise duty is leviable on the real price which is the manufacturing cost to the manufacturer since the containers were obtained free from the Railways, its price was no part of the manufacturing cost as cnotemplated by the decision of the Supreme Court. Ini that view of the matter, Mr. Chatterjee contended that the Excise Authorities wore wrong in demanding excise duty in respect of the containers for which no cost was incurred by the petitioner in the process of manufacture. Mr. Sahanlal Saraf, learned Counsel appearing on behalf of the Respondents, submitted that in deciding the sale price the object of the sale must be looked at as a whols. He submitted that the dry cell Batteries could not be manufactured without the containers. He further submitted that in determining the real price the whole thing that has been manufactured is to be looked at for the purpose of determining what is its manufacturing cost. He further submitted that in view of the Fxplanation to Section 4 of the Central Excises and Salt Act, 1944, the only discount allowable was trade discount since the supply of container is not a trade discount, the Excise Authorities were quite justified in making the demand which they did. According to Mr. Saraf Rs. 291 is the manufacturing cost as shown in the bills and not Rs. 241 which is Rs. 50 less for the containers. He further submitted that the rebate of Rs. 50 is really part of the cost incurred by the manufacturer who is the petitioner in this case.

( 5 ) I am unable to accept any of the contentions of Mr. Saraf. The sole and simple question appears to be as to w