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TMI Blog1994 (1) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... different States and to value all the sales at the price charged to industrial consumers in Kerala. On receipt of reply, the proposal in the Show Cause Notice was confirmed by the Assistant Collector. On appeal, the Collector rejected the appeal. Hence the appeal before us. 2. The Collector while rejecting the different prices in different States for industrial consumers relied on a judgment of Bombay High Court in the case of Godrej Boyce Manufacturing Ltd. v. Union of India, 1984 (18) E.L.T. 172. He held that industrial consumers are one class in terms of Section 4 of the Central Excises and Salt Act and there cannot be more than one price for industrial consumers. 3. The main contention of the learned Advocate for the appellant is that any group of buyers who are differently placed from each other for any relevant reasons have necessarily to be treated as different classes of buyers. Owing to factors as demand/supply and other market conditions, levels of competitions, taxation structure etc., the same goods have necessarily to be sold at different prices. He however, submitted that in a particular State, if there is no dealer selling white cement then the manufacturer can s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of determining the assessable value it is the price at which such goods are ordinarily sold by the assessee in the course of wholesale trade where buyer is not related person and the price is the sole consideration for sale is relevant. 9. It is not disputed that the various industrial consumers situated in various States are not related persons and that the different prices are the actual prices at which the appellant sells the goods to various industrial consumers in various States, and the price is the sole consideration for sale. Therefore, the different prices to different industrial consumers in different States satisfy the condition of normal price laid down in Section 4. However, the contention of the Department is that there cannot be different normal prices in respect of a particular class of buyers. Industrial consumers being one class of buyers there should be one normal price even though they are placed in different regions. In this context, we may refer to the Order of this Tribunal in Amar Chemical Industries v. Collector of Central Excise, 1992 (58) E.L.T. 85, though it is slightly different on facts from the facts of the present case. The relevant facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each such contract price shall be the normal price for the purpose of Section 4. In the instant case, it is not the case of the Department that the price is influenced by extra-commercial consideration or that it is not sole consideration for sale or that they are related persons of the appellant. It is also not disputed that it is the actual price which is charged from various industrial consumers from different States. In view of the above, we are of the view that the price charged by the appellant from various industrial consumers from different regions represent the price under Section 4 and the assessable value should be determined on the basis of different prices charged from different consumers from different States. 12. It is true in Godrej Boyce (supra) it was held that :- But wholesale dealers in India cannot be considered as belonging to different classes simply because they are located in different towns and cities unless there are different class of buyers there cannot be different normal price for excise purpose under Sec. 4. The above observations are made in the context of the argument advanced by the Department that the manufacturers were selling 40% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso there is no authority for the determination of separate assessable values in respect of buyers belonging to different sub-classes where it may be possible to group the buyers in a particular class or to different subclasses on the basis of certain common factors. 17. In my view the judgment of Bombay High Court in the case of Music India v. Union of India reported in 1986 (25) E.L.T. 1032 which has been referred to by the learned Member (J) is not relevant, in that case it was held that regional discount is deductible from the sale price for arriving at the value under Section 4(1)(a). In the appellants case in terms of proviso (1) to Section 4(1)(a) only a single price was determinable in respect of sales of white cement to industrial consumers who were treated as belonging to a particular class. Determination of separate assessable values in respect of industrial consumers in different States or geographical regions by deeming them as constituting sub-classes of a class of buyers namely, Industrial consumers would not be permissible. 18. I, therefore uphold the order passed by the Collector (Appeals) and reject the appeal filed by the appellants. Dated : 15-10-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le dealers) because they are located in different towns or cities. Learned advocate submits that it is so because the court has used the word simply while holding that wholesale dealers in India cannot be considered as belonging to different classes simply because they are located in different towns or cities. He submits that use of the word simply by the court is very significant. If the only criterion for treating the class of wholesale dealers as different classes because of their different location of towns and cities then alone the court had held that they cannot be treated as different classes. Learned advocate submits that if there are other factors, apart from the location of the dealers (persons) in different towns or cities or regions then there is no prohibition in treating such persons located in different regions or towns or cities as different classes. He submits that in the instant case it is not merely the location of the industrial consumers in different regions which has led the appellant herein to treat industrial consumers in different regions as different classes of buyers. There are other factors as well. Those other factors, he points out are purely comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The change that has been made in new Section 4 is laying down the rule, as held in Sharada Silicate, mentioned supra, that there can be different prices for different classes so long as classes are based on commercial considerations. In the instant case, he submits that Revenue has not challenged the classification made by the appellant that it is not on commercial consideration. 23.2 Next submission of the learned advocate is that instead of submitting a common price list for all industrial consumers in different regions, the appellant had the choice of submitting the price list as if under the contract between the manufacturer and the customer and the appellant could avail of the same normal trade discount for industrial consumers which he has shown for the industrial consumers as a whole in different regions, under the contracts with the individual buyers. In such a case the department could not raise any objection because the contract prices are acceptable under the accepted and settled principle of law. The department s objection, therefore, in essence boils around to the form of getting the price approved rather than to the substance of prices. 23.3 He, therefore, urge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eption to the uniqueness of the price under Section 4(1) (a) laying down that there may be different prices for the purposes of Section 4 if such goods are sold by an assessee at such different prices to different classes of buyers. The expression class of buyers has not been defined either in Section 4 or in any other provisions of the Act. It is, therefore, left to the choice of the manufacturer/assessee to form classes of buyers. The question that arises in this case is whether classification of buyers to be made by an assessee would be at his mere whim and fancy or would have some nexus to commercial practices of sale of goods and business. 24.2 I am of the view that classification to be adopted by an assessee must be on objective criterion and should not be based on his mere whim and fancy; otherwise there will be a scope for a manipulation and evasion of duty. To lay down an objective criterion I would like to take a due, for the purpose of classification under this section, from the judgment rendered by the Supreme Court under Articles 14 to 16 of the Constitution. Two conditions were laid down by the Court in the case of State of West Bengal v. Anwar Ali Sarkar [AIR 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umers, but also sales to consumers, such as Government bodies, hospitals, etc. It is for this purpose that a broad classification of various types of consumers has been made who purchase the goods in wholesale lots (otherwise than in retail) from an assessee. The definition of `wholesale trade indicating some of the classes of buyers does not appear to give an exhaustive list of classes of buyers for the purposes of proviso (i) to Section 4(1)(a). 25.3 Learned JDR s reliance on Ashok Leyland s case is not well founded because the respondents therein, as is apparent from the extracts of para 7 set out earlier, did not make any distinction between various classes of buyers themselves. The respondents therein were trying to make out a new case for different prices to different classes of buyers which has been turned down by the Tribunal in the said case. 25.4 I am also inclined to agree with the learned advocate for the appellant that the Bombay High Court did not lay down absolute rule of law in the case of Godrej Boyce because of the use of the word simply in that sentence. In any case, as rightly pointed out by the learned advocate since the judgment has been set aside, as b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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