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TMI Blog1991 (8) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... t lower level. It maybe stated at this stage that there is no allegation whatsoever that the two companies, namely, Indo-Kem Ltd. and Rama-Kem Ltd. are in anyway related to the appellants or that the price was influenced by any extra-commercial consideration or that there is any kick back or flow back to the appellants in monetary terms or in any other manner, apart from the prices contracted between the appellants and the two companies aforesaid. In other words, there is no dispute that the contract prices for the two companies negotiated by the appellants are not at arm s length. 2.1 It was, however, alleged by the department that the prices were deliberately suppressed in the case of the aforesaid two companies by the appellants in order to remain within the ceiling of aggregate clearances stipulated in Notification No. 80/80, dated 19-6-1980 inasmuch as if the normal prices as for other dealers is taken into account the appellants would have exceeded the stipulated ceiling of Rs. 15 lakhs by about Rs. 1,831.75p during the financial year 1980-81. The Revenue has also doubted the price list submitted in Part II for the aforesaid two companies on the ground that the goods were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are independent of the manufacturers carrying on business with their own capital, business technique etc. belonging exclusively to the customers, such customers are not related persons for the purpose of the Act and as such the valuation as per contracts between such customers and the manufacturers must be accepted for the purpose of levy of ad valorem duty. Accordingly, the order-in-original dated 20-1-1983 was set aside with consequential relief to the assessee. 3. Arguing for the assessee in the first 3 appeals, learned advocate, Shri D. Parikh, has urged that the genuineness of the contract between the assessee and the customer companies, namely Rama-Kem and Indo Kem is not disputed by the department. The reason for charging the lower prices for the products produced by the assessee from the said two companies is that they are the bulk customers of the assessee. For example, the percentage of sales from August 1980 to March 1981 to the aforesaid two companies was to the extent of 27.83% of the total sales while for the remaining 30 or more wholesale dealers it was 72.17%. Again during the period April 1981 to March 1982 the percentage of sales to the two aforesaid compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. He also relies on the following citations :- (1) 1987 (27) E.L.T. 272 [Orient Paper Mills Ltd. v. CCE, Nagpur] (2) 1988 (35) E.L.T. 495 [Woodcraft Products Ltd. v. CCE, Shillong] (3) 1989 (39) E.L.T. 641 [Window Glass Ltd.v. CCE, Calcutta] para 13. 4.1 In this rejoinder, Shri Parikh, learned advocate, has submitted that it is not disputed by the department that the goods in the instant case were actually sold to the aforesaid two companies. He also submits that it is only for the purpose of sales tax that the goods were shown to have been delivered on paper through the godown but actually the goods were sent directly to the godown of the aforesaid two companies, namely, Indo-Kem and Rama-Kem from the assessee s factory. This is evident from the letter of instruction given by the assessee to the transporters, samples of which are available at pages 27 and 31. He also submitted that it does not make any difference so far as the valuation under Section 4 of the said Act is concerned whether the goods are delivered from the assessee s factory or from the assessee s godown to the aforesaid two companies with whom the contract prices have been entered. 5. We have careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods are supplied at the factory gate by the first petitioner to M/s. Philips India Ltd. which alone will be the assessable value............................................................. Therefore that price at which the first petitioner sells the goods to M/s. Philips India Ltd. is the only relevant price. 10. In this view of the matter we issue a mandamus to the Assistant Collector and the Superintendent of Central Excise (respondents 2 and 3) to cancel and withdraw their impugned letters dated February 16, 1979 (Annexure G) and March 20,1979 (Annexure K) and further direct them to approve the price list submitted by the first petitioner without reference to proviso (iii) of Section 4(1) (c) of the Act and to permit the first petitioner to clear-the goods referred to in the agreement dated 25,1979 entered into between the first petitioner and M/s. Philips India Ltd. in accordance with the prices as per the agreement. We declare illegal the stand of the respondents that price at which M/s. Philips India Ltd. sells the goods manufactured by the first petitioner for M/s. Philips India Ltd. to its buyers would be the assessable value. We further direct the respondents to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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