Idl Chem Loses Excise Case

The Supreme Court dismissed an appeal of IDL Chemicals Ltd, Orissa, against the excise assessment for supply of explosives to Coal India Ltd (CIL) and other public sector undertakings at a subsidised rate.

The company argued that 90 per cent of its produce was supplied to CIL, and the "normal price" for purposes of central excise should be taken to be the price paid by CIL.

The excise authorities maintained that IDL did not file price lists when it despatched its goods to agents in different parts of the country.

At the time of the removal of goods from the factory, they were not earmarked for sale to any particular buyer. They also did not declare that the goods were meant for CIL or other special customers like public sector undertakings. Therefore, the authorities treated the price at which IDL sold the goods to private buyers at the time of removal of goods from the factory as the "normal price".

The division bench of the court, consisting of Justice Suhas C Sen and Justice K T Thomas, upheld the view of the revenue authorities. They said that IDL had failed to make any declaration regarding the price at the time of despatch. Nor did it declare to which party it was selling the consignment. Therefore, the authorities were right in assessing the goods for the price payable by ordinary customers.