( 1 ) THE petitioner is a company incorporated under the Indian Companies Act and has been engaged in the manufacture of cigarettes Amongst other places it has got a factory at Baroda. On the manufacture of cigarettes the petitioner company was called upon to ply excise duty. While determining the assessable value of cigarettes for the purpose of collecting excise duty the Central excise authorities included in it certain post manufacturing expenses such as advertisement expenses storage expenses marketing and distribution expenses and Bank charges and interest recovered by the petitioner Company from wholesale buyers who enjoy a certain credit. The Assistant Collector of Central Excise determined the assessable value after including therein expenses under all these heads. The petitioner appealed against the order to the Appellate Collector of Central Excise who confirmed it.

( 2 ) UNDER the aforesaid circumstances the petitioner has filed this petition in which two questions are raised for our decision : (1) Assessable value for excise duty cannot include post manufacturing expenses because excise duty is a tax on manufacture on production. (2) If post manufacturing expenses are included the assessable value sec. 4 of the Central Excise and Salt Act 1944 would be ultra vires the legislative competence of Parliament under Art. 246 of the Constitution read with Entry 84 in List I and Entry 54 in List II.

( 3 ) IN order to answer the questions which have been raised before us it is necessary to make a short reference to a few decisions which have a bearing on the first question. Some of them have interpreted sec. 4 as it was before it was amended in 1975 and the others have interpreted the new section.

( 4 ) SEC. 4 before it was amended on 1/10/1975 read as under :where under this Act any articles is chargeable with duty at a rate dependent on the value of the article such value shall be deemed to be (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production or if a wholesale market does not exist for such article at such place at the nearest place where such market exists or (b) Where such price is not ascertainable the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer or his agent at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or if such article is not sold or is not capable of being sold at such place at any other place nearest thereto. Explanation :- In determining the price of any article under this section no abatement or deduction shall be allowed except in respect of the trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid sec. 4 before it was amended specified the wholesale cash price except when it could not be ascertained for determining the assessable value of an excisable goods and also laid down the manner of which the whole sale cash price could be determined.

( 5 ) ON 1/10/1975 sec. 4 was amended. Amended sec. 4 (i) (a) reads as under :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 removal where the buyer is not a related person and the price is the sole consideration for the sale. THERE is a provision to clause (a) of sub-sec. (1) of sec. 4 which includes three