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TMI Blog1993 (11) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... price list proforma. Part I of the price list proforma related to the determination of value for goods sold to unrelated buyers in the course of wholesale trade, under the main definition case, in terms of the provisions of Section 4(1 )(a) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act ). 3. It was alleged in the show cause notice that the Delhi distributors and the outstation distributors were the same class of buyers, and that the class of buyers did not change merely because they are located in different regions, and that the difference in the prices could not be based upon territorial segregation. 4. According to the appellants, different prices were charged by them from their different classes of buyers, on the basis of territorial classification of their Delhi distributors and outstation distributors. The reason for charging lower rates from their outstation distributors was to meet the competition at outstation places, and to develop new markets. They submitted that in the outstation markets, they have to compete with other manufacturers of the area who are closer to such markets and who are located in such outstation markets. It was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han the prices to Delhi buyers. There was no written agreement with the distributors. The learned Advocate agreed that filing of the price lists in Part-I was incorrect, but added that the format of the price lists was immaterial in the circumstances of the case. He stated that in the show cause notice no grounds have been taken to reject their prices. He also mentioned that the Collector had drawn incorrect inferences while relying upon the Tribunal s decision. 11. In support of his arguments, the learned Advocate relied upon the following decisions :- (1) Gujarat State Fertilisers Company v. Union of India - 1980 (61) E.L.T. 397 (Guj.) - Regional discount is essentially a discount which may vary between one purchaser to another depending upon the region in which they carry on business. Being given as a percentage deduction from the list price, it is a trade discount within the meaning of the explanation to Section 4 of the Act. (2) Music India Ltd. v. Union of India - 1986 (25) E.L.T. 1032 (Bom.) -Regional discount is deductible from the sale price if established under agreements or under terms of sale or by established practice. (3) Sharada Silicate and Chemicals Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides as under :- Section 4. Valuation of excisable goods for purposes of charging of duty of excise - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value, shall, subject to the other provisions of this section, be deemed to be - (a) the normal price thereof, that is to say the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale." 18. It is seen that the assessee had declared their prices as inclusive of the cost of packing. Their selling rates were also inclusive of Central Excise duty. Trade discount/cash discount of 5% was claimed for deduction. In some cases deduction towards some scheme was also claimed. In the price lists for outstation distributors, a deduction of 4% towards Central Sales Tax was also claimed. The value so arrived at after such deductions was claimed for approval, and was approved by the proper Central Excise Officers. 19. In the case of Union of India v. Bombay Tyre International -1983 (14) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 4 of the Act, then no objection could reasonably be raised by the Central Excise department for determining the assessable value on the basis of different prices to different classes of buyers (not being related persons). 24. Now let us examine whether in the circumstances of the case before us, the Delhi distributors and the outstation distributors of the appellants, could be considered as different classes of buyers. 25. Wholesale dealers has been defined under Section 2(k) of the Act as under :- Wholesale dealer means a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent who, in addition to making contracts for the sale or purchase of excisable goods for others, stocks such goods belonging to others as an agent for the purpose of sale." 26. Wholesale dealer could be a trader, manufacturer, broker, commission agent, contractor and a stockist. 27. As held by the Hon ble Supreme Court in the case of Krishi Utpadan Mandi Samiti v. Shanker Industries - 1993 AIR SCW 762 where the legislature uses the words means and includes , such definition is to be given a wider meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder had observed as under :- The price lists are filed for the purpose of making assessment and for the convenience of the Department as well as the assessee to ascertain the price of the manufacture, clearance, deductions claimed etc. The filing of a price list under a particular part, say in Part I, II, III may not entirely be relevant in determining whether the price list represents the price under Section 4(l)(a) in view of the various provisos provided under Section 4(1). In other words, as long as it is a sale to a class of buyers indicated in the earlier paragraphs in the course of wholesale trade at the factory gate and as long as the buyer is not a related person and the price is the sole consideration for the sale, it represents the price under Section 4(l)(a). Therefore, the reasoning of the Collector that since there was no Part-I price approved, the price approved under Part II cannot be treated as the price under Section 4(l)(a) of the Act is based on a misconception of the provisions of the Act." 36. In the case - Sharada Silicate and Chemicals Industries v. C.C.E. -1979 (4) E.L.T. (J 20) (Mad.), the Madras High Court had held that the price charged by the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay High Court did not object to the higher price for the refrigerators sold and delivered to wholesale dealers outside Bombay. In that case the petitioners were levying a separate charge for their secondary packing under a separate invoice. This practice has been in vogue for a long time. The Bombay High Court had held that the petitioners were entitled to have the value of refrigerators determined for the purpose of excise duty without the addition of the charge for extra packing. In the case before us, there is no dispute about the packing or the packing charges. 43. In the case of Shakti Insulated Wires Pvt. Ltd. v. C.C.E. - 1990 (49) E.L.T. 554 (Tribunal), relied upon by the Assistant Collector, Central Excise and referred to by the Collector, Central Excise (Appeals), the matter related to contracted prices. It was noted by the Tribunal that what was termed as contract was merely a confirmation order signed only by the appellants and as such on that very basis, it could not be held to be a contract. The Tribunal came to a finding in that case that the contracted parties were not in any way different from the other wholesale dealers. 44. The decision in the case of C.C.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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