1999 (5) TMI 195 - AT - Central Excise

Summary

Issues:

1. Assessment of assessable value for Oscillating Table fan with regulator.
2. Determination of related person status between the manufacturer and the buyer.
3. Consideration of price list approval and its implications.

Assessment of Assessable Value:
The case involved the respondent, a manufacturer of Oscillating Table fans with a regulator, who filed a price list declaring the assessable value per unit. The respondent was directed by the Superintendent of Central Excise to treat the buyer as a related person due to the buyer supplying components and raw materials at agreed prices. The Assistant Collector approved the price list at a higher value, which the respondent challenged. The Collector (Appeals) later set aside the order, indicating that the buyer was not a related person. The Revenue challenged this decision.

Determination of Related Person Status:
The main contention was whether the buyer should be considered a related person of the manufacturer based on the supply of components and raw materials. The Department argued that the prices were fixed unilaterally by the buyer, but the Tribunal found no evidence to support this claim. The Tribunal highlighted that the buyer was not in a separate class of buyers and that the approval order for another manufacturer supplying to the same buyer had been set aside. As the respondent sold the entire production exclusively to the buyer, the relationship did not meet the criteria under the Central Excise Act to establish a related person status.

Consideration of Price List Approval:
The Tribunal dismissed the appeal, stating that there was no valid ground for interference. It emphasized that even if the price charged by the respondent to the sole buyer was lower than the normal price to wholesale dealers, it was justified as the buyer purchased the entire production. The Tribunal concluded that without establishing a related person status, the respondent could not be directed to pay duty based on prices charged to wholesalers or any other consideration beyond what was received from the buyer.

This judgment clarifies the assessment of assessable value for manufactured goods, the criteria for determining related person status under the Central Excise Act, and the implications of price list approvals in such cases. The decision provides insights into the considerations involved in setting prices, the significance of buyer relationships, and the importance of establishing legal grounds for duty imposition based on transaction values.