1995 (12) TMI 201 - AT - Central Excise

Summary

Issues:
1. Appeal against Order-in-Appeal passed by Collector to Central Excise (Appeals), Madras regarding the sale of electronic goods through a Sole Distributor.

Detailed Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the assessment of Central Excise duty on electronic goods sold through a Sole Distributor. The Revenue contended that the Sole Distributor should be considered a related person for the purpose of CESA, 1944. The matter was initially adjudicated by the Assistant Collector of Central Excise, Bangalore, who determined that the price at which the goods were sold by the distributor should be taken into account for assessment purposes. However, on appeal, the Collector of Central Excise (Appeals), Madras set aside this order, ruling that the distributor was not a related person and the assessable value should be based on the price at which the goods were sold to the distributor.

During the hearing on 1-12-1995, only the Revenue's representative was present, while no one appeared for the respondent, despite a telegraphic intimation being sent earlier. Given the age of the matter and the lack of a request for adjournment, the Tribunal proceeded with the case in the absence of the respondent. The Revenue's representative referred to the facts and highlighted that the order of the Collector of Central Excise (Appeals) did not address the relationship between the respondent and the distributor adequately, citing the decision in the case of Bombay Tyre International and the definition of 'related person' under Section 4(4)(c).

Upon careful consideration, the Tribunal noted that the show cause notice issued in 1983 did not sufficiently establish why the distributor was considered a related person of the manufacturer. The notice only mentioned that the distributor sold goods at a higher price than approved by the department, without specifying the difference in prices. The Tribunal emphasized the definition of 'related person' under Section 4(4)(c), which requires an association where parties have direct or indirect interests in each other's businesses. Referring to the Supreme Court decision in Bombay Tyre International, the Tribunal clarified that only distributors who are relatives of the assessee would fall under this definition. As the evidence did not demonstrate any direct interest of the distributor in the manufacturer's business, the Tribunal upheld the order of the Collector of Central Excise (Appeals), finding no infirmity in the decision.

In conclusion, the Tribunal rejected the appeal filed by the Revenue, affirming the decision of the Collector of Central Excise (Appeals), Madras regarding the assessment of Central Excise duty on electronic goods sold through a Sole Distributor.