M/S.HBL AIRCRAFT BATTERIES LTD. vs COMMNR. OF CENTRAL EXCISE,HYD.

The Supreme Court addressed the issue of excise duty on batteries supplied to the Ministry of Defence (MOD) and Hindustan Aeronautics Limited (HAL) under Section 4 of the Central Excise Act, 1944. The Court held that the price charged to MOD, based on a lower silver price of Rs.2,500 per kg, was not reflective of the true market value, which was Rs.6,666 per kg. The Court upheld the Appellate Tribunal's decision that the sale to MOD was not in the ordinary course of business, thus confirming the differential duty demand based on the market price of silver.