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Issues involved: Interpretation of "wholesale cash price" u/s 4(a) of the Central Excises and Salt Act, 1944; Assessment of assessable value for pressure cookers sold to a partnership firm; Claim for refund based on difference in prices.
Summary: The petitioner, a manufacturer of Pressure Cookers, declared the assessable value based on the price at which the products were sold to a partnership firm. The Excise authorities raised concerns that the declared price was not a wholesale cash price, leading to a dispute regarding the assessment. Despite the petitioner's explanation of the transactions being at arms length, the authorities rejected the claim and directed to consider the price charged by the distributor as the wholesale cash price. The petitioner's appeals for refund of price difference were also dismissed, prompting a petition under Article 226 of the Constitution of India. The Excise authorities contended that the partnership firm was the actual manufacturer based on certain grounds, including the presence of their trademark on the products and exclusive supply arrangement. However, the court held that these factors alone did not prove a lack of arms length transaction, citing precedent cases to support the argument. The court further noted that the absence of a written agreement between the petitioner and the partnership firm did not automatically imply that the latter was the real manufacturer. Consequently, the court deemed the Excise authorities' orders as erroneous and ordered the refund to the petitioner, setting aside the rejection of the claim. The respondents were directed to refund the amount within three months, with no costs imposed on either party.
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