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TMI Blog1987 (10) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Superintendent of Central Excises, and as amplified later during the course of hearing before us, was as follows :- The Respondents advertised for Yamaha RX-100, 100 CC motor cycles for booking orders directly from the public. Individual customers from the public contacted the dealers appointed by the respondents for booking orders. These dealers booked orders from customers on payment of deposit of Rs. 1000/- per motor cycle. The customer paid the deposit by means of a demand draft made out in the respondent s name. The customer gave this demand draft to the dealer who transmitted the customer s order and the demand draft to the respondents. The respondents effected clearance in the order of computerised booking priority. The customer got an allotment letter when his turn came. He contacted the dealer again and paid the balance price of the motor cycle by means of a demand draft which was again made out directly in the name of the respondents. The dealer transmitted the second demand draft also to the respondents. The respondents made out the clearance documents (gate pass/despatch advice/invoice) directly in the name of the customer, but sent the motor cycle to the deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale to individual customer and as dealers margin in the case of sale of motor cycles to the dealers, were nothing but agent s commission, deduction of which was not permissible as per Supreme Court judgment : 1984 (17) E.L.T. 607 S.C. - Coromandal Fertilizers Limited; (3) In any case, the whole of the dealers margin of Rs. 550/- could not be deducted because the dealers spent some part of it on discharging warranty obligation and undertaking advertisement and publicity on behalf of the respondents. (4) However, freight and insurance could be allowed to be deducted after verification of the amount by the Assistant Collector in view of the Supreme Court judgment in the case of Bombay Tyre International. 5. The primary question which we have to decide in the case is whether the sale of 1-1 motor cycle to individual customers from the public at large constituted wholesale sale or retail sale. On this question, let us have a look at the law and the understanding in other countries and in our own High Courts and Tribunal and also under the Central Excises Salt Act, 1944. Understanding in other countries : We reproduce below extracts from the book Words and Phrases Lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve found it necessary to manufacture the goods they sell in bulk. Chemists Service Guild of New Zealand Inc. v. Stilwell, (1966) N.Z.L.R. 654 (C.A.), per North, P., at P. 663. Having regard, as I may, to such knowledge of affairs as I possess, I would not myself in using the term wholesaler exclude from the connotation of this term accepted in New Zealand manufacturers who make their own product and then dispose of it in bulk. Can the word dealer , then, make any difference? Is it necessary to buy as well as to sell to be a dealer? Looking at the definition of this word in the Shorter Oxford Dictionary, I have not found in the definitions there given of deal , dealer and dealing anything to compel me to exclude the manufacturer-cum-seller. Ibid. per Turner, J., at P. 668. Whatever may be the limitations placed on wholesale or dealers in dictionaries which illustrate their use overseas, and whatever may have been the position in the early days of this Dominion when a more rigid demarcation between manufacturer, wholesaler and retailer was observable, I have no doubt at all that in 1954 a manufacturer selling in quantity direct to the retail trade was covered by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. Rule 188 : 1946 N.L.J. 304 : 225 I.C. 84. Wholesale Price. - Wholesale price means, the price which a wholesale dealer and not a retail dealer charges for his goods, when he sells them in wholesale units; what will constitute a wholesale unit will have to be determined with reference to the practice of the trade at the place where goods in question, or goods of a like kind and quality, are sold or are capable of being sold to an independent buyer; meaning thereby, any one who intends to effect such a purchase or sale, upon payment of proper price, without restriction - Amco Batteries (P) Ltd. v. Assistant Collector, Central Excise, A.I.R. 1963 Mys. 216 at 218. Coming to the understanding of this Tribunal, it was held in 1987 (27) E.L.T. 718 (Tribunal) - Collector of Central Excise v. M/s. Voltas Limited -that sale of fork lift trucks to consumers (persons or institutions) for their own use constituted retail sale. In 1987 (30) E.L.T. 291 (Trib.) - Collector of Central Excise v. Madras Rubber Factory Limited, it was held that it was obvious that the concept of re-sale to consumers was built into wholesale. In other words, one purchased goods in wholesale in order to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. 8. The dealers, no doubt, functioned as agents of the respondents. Rather, they were an extended arm of the respondents themselves. But this was not the case of the respondents selling to wholesale buyers where the dealers had booked the orders from those buyers. The facts of the Coromandal Fertilizers case cited by the learned representative of the department were different and so was the issue involved therein. In that case, the manufacturer had sold the goods to wholesale buyers and wanted deduction of the commission paid to agents (third parties) for the service rendered by the agents in procuring the orders. We do not have the wholesale price in the case before us. What we have is only a retail price and all that we have to do is to arrive at assessable value strictly in terms of the statutory provisions of Rule 6(a) of the Central Excise (Valuation) Rules, 1975, which is direct on the issue. 9. The next question is: how much deduction should be made from the retail price in order to arrive at the deemed wholesale price in terms of Rule 6(a). Here, we have two things to go by. First, we are informed that after the initial 3-4 months period, the respondents started sell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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