The value of inserts and fasteners should be included in the valuation of mono block concrete sleepers for the purpose of charging excise duty.

( 1 ) PETITIONER No. 1 is a company incorporated under the Indian Companies Act, 1956, which is carrying on the business of manufacturing and dealing in R. C. C. poles, sleepers and similar other items. On 15th November, 1976 the petitioner entered into a contract with railways for the manufacture and supply of mono block concrete sleepers. One of the clauses of the said contract was that the petitioner No. 1 will be paid Rs. 135 per piece inclusive of all labour and material excepting for malleable cast iron inserts and fastenings, which were to be supplied free by the said Railway Board. Clause 6. 3 of the aforesaid contract specifically stated that any taxes and duties leviable on the said concrete sleepers from time to time was to be, and is to the said railway Boards Account. In terms of clause 6. 4 of the said contract, the malleable inserts were to be supplied free of cost to the petitioner No. 1

( 2 ) ON 1st August, 1981, the respondent No. 2, Superintendent, Customs and Central Excise, mathura, besides other things, intimated petitioner No. 1 that no documents have been shown so as to know the value of the inserts supplied by the railways which were most essential for the purposes of assessment of the duty involved. The petitioner No. 1 was asked to supply the documents so that the duty may be worked out by adding the value of inserts. After receiving the aforesaid communication from the excise department, the petitioner No. 1 asked the Railway board to furnish the value of inserts consignment-wise and also informed them that any payment of duty on the value of inserts will be to their account as per contract. It was also asked from the railway Board that their Officers had informed the petitioner that no duty was payable on inserts and the petitioner No. 1, therefore, requested the Railway Board to inform them of the grounds on which they were relying for holding the view that excise duty was not payable on inserts. The petitioner No. 1 informed the excise authorities that they have asked the Railway Board to supply them the value of the inserts supplied by them. On 1st July, 1982 the Chief Executive of the petitioner No. 1 again wrote to the General Manager (Track), Northern Railway informing them that the company is not paying excise duty on the value of the inserts and the excise department is pressing very hard to pay duty on the value of the inserts and the matter is lying pending since long. It was even written that the excise duty may be paid under protest till the dispute is finally settled between the Railways and the excise department. A request was again made for supplying information regarding the value of inserts.

( 3 ) FROM the material which has been filed in this writ petition it appears that throughout the excise department was pressing the petitioner to disclose the value of inserts and the petitioner was taking the plea that the value of inserts could not be disclosed as despite persistent requests the Railways has not supplied the aforesaid information. It was only on 10th October, 1984 that the General Manager of petitioner No. 1 intimated the Superintendent, Central Excise that the general Manager (Engineering), Northern Railways by his letter dated 15th September, 1984 has intimated that the value of inserts being used was Rs. 11. 90 paise. However, it appears that before the petitioner No. 1 supplied the information regarding the value of the inserts by their letter dated 15th September, 1984, the Superintendent, Customs and Central Excise issued a demand of excise duty under Section 11-A of the Central Excises and Salt Act (hereinafter described as the "act" ). The petitioner after receiving the aforesaid demand raised under Section 11-A of the Act, submitted a detailed representation in which various pleas were taken and it was requested that an opportunity to produce defence and hearing be provided. The Superintendent, customs and Central Excise, Mathura issued a show cause