9911796707
TMI Blog1986 (8) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Collector of Central Excise, Chandigarh. It appears, however, that the television sets manufactured by M/s. Television Factory were supplied to M/s. Electronic Corporation of India Ltd., Hyderabad, who sold the sets through their own, sales outlets. The Assistant Collector, therefore, began enquiries into the sales before final approval of the list. 2. It came to light during the enquiries that ECIL, Hyderabad sold the television receiver sets with an extra charge of Rs. 190/- per set as service/warranty charges and this was compulsorily recovered from all buyers. The Assistant Collector decided that the extra charge of Rs. 190/- per television set recovered by ECIL, Hyderabad should be added to the price and he, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court judgment in Bombay Tyre International case 1983 E.L.T. 1890. He then proceeded to read notification No. 96/80-CE dated 19.6.1980 amended by notification No. 144/80-CE. He said that the Supreme Court judgment in CIBATUL 1985 (22) E.L.T. 302 covered his case completely and he did not have to say much more. 4. The learned counsel for the department said that this factory and ECIL, Hyderabad were related, and they even declared their price in price list part IV and this has not been challenged. They cannot challenge it now. The price they declared was ECIL s price, but in so doing they kept from the department the fact of the extra Rs. 190/- warranty price charged when the goods are sold in the market by ECIL. This warranty price must f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice said that the warranty was charged compulsorily; this shows it is not a permissible deduction. Notification No. 96/80-CE cited by the opposite counsel was only an exemption notification. The dependence of the appellants on another order in appeal No. 515/CE/CHG of the Appellate Collector was not correct, because that case concerned a sale by themselves on their own account. 7. The learned counsel for the appellants in reply said that they filed the price list in part II; when they filed one in part IV they did so under orders of the Assistant Collector. He referred to paragraph 3 of their prayer in the revision petition in support of this. They did not file part IV voluntarily as can be seen from paragraph 11 of their revision ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t resins manufactured under the agreements. The Assistant Collector changed the prices to higher prices saying that they should be assessed at the price at which the buyer sold the products in the market, proceeding on the footing that the buyer was the manufacturer of the goods and not the seller. This decision was overruled by the Appellate Collector, who in turn was overruled by the Central Government whose decision was set aside by the High Court. The matter then went to the Supreme Court. 10. The court said that the entire question was whether the goods were manufactured by the seller or were manufactured by the seller on behalf of the buyer. It took note of the fact that the manufacturing programme was drawn up jointly by the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derabad. It would also strictly follow the inspection and its procedures prescribed by ECIL. ECIL was given the prerogative of even approving components to be used in the factory, and at the end of it, packing and forwarding the TV receivers according to the specifications given by ECIL. The know-how given under this agreement shall remain the property of ECIL and could not be transferred to any other party. 12. It is very important to note that there is nothing in this agreement that allows M/s. Television Factory to dispose of the defective receivers themselves to other buyers. If the receivers are found by ECIL on inspection to be defective at the place of delivery, they are to be returned to the factory for rectification of that defec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. From this we can say that the price declared by M/s. Television Factory, a price agreed upon between them and ECIL, is not an acceptable price under section 4 of the Customs Act, and that the only acceptable price for assessment is the price at which the TV receiver sets are sold to independent customers by ECIL. The price quoted by Television Factory, the appellants, is a dictated price, a captive price and not an independent market price determined only by the forces of supply and demand, and is not a price that was the sole consideration for the sale. From the various things we have seen in the agreement, M/s. Television Factory and ECIL are related persons and the action of the Assistant Collector in demanding a part IV price list ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
