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TMI Blog1995 (10) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... e normally less than the cost of manufacture. I also observe that the appellants have not denied that in the instant case the price declared by them was less than the cost of manufacture and have tried only to plead that old Section 4 placed no bar on having a wholesale cash price lesser than the cost of manufacture and have cited Supreme Court Judgment in Voltas case in support of their contention that the wholesale cash price at which the goods were actually sold could only be considered as the assessable value. I consider that the arguments advanced by the appellants are fallacious. Neither the language of old Section 4 nor the ratio of the Supreme Court judgment in Voltas case implies that the wholesale cash price could be less than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture of the said machinery. Accordingly, a show cause notice was issued to the appellants to explain as to why the assessable value should not be refixed and duty charged on the refixed assessable value after taking into consideration the cost of raw materials plus manufacturing cost plus reasonable margin of profit. The appellants in reply to the show cause notice have submitted that neither quantity of excisable goods manufactured and cleared by them at a different rate has been stated nor the amount of duty short paid has been indicated; that the goods were cleared by the appellants after approval of the price list by the Department and therefore, the approved price list cannot be reopened or reviewed by the Assistant Collector; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer and the purchaser of the goods were not related persons; that if such price was ascertainable then there was no question of determination of such price on the basis of Cost Accountant s Certificate. In support of his contention, the learned Consultant cited and relied upon the decision of the Government of India in its order in Revision No. 336 dated 28-3-1980 in the case of M/s. Forbes Campbel and Co. Ltd. reported in 1980 E.L.T. 653 and also in the cases reported in 1976 E.L.T. 499 and 1991 (53) E.L.T. 70. On the question of limitation, the ld. Consultant submitted that the demand was time-barred as the show cause notice was issued on 9-7-1976 whereas the case pertains to the year 1975-76. 4. Shri A.K. Singhal, the learned JDR app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the production and manufacture of goods (see Union of India v. Delhi Cloth and General Mills (AIR 1963 SC 791) Section 4 of the Act therefore provides that the real value should be found after deducting the selling cost and selling profits and that the real value can include only the manufacturing cost and the manufacturing profit. This Section makes it clear that excise is levied only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post-manufacturing cost and the profit arising from post manufacturing operation, namely selling profits. The Section postulates that the wholesale price should be taken on the basis of cash payment thus eliminating the interest involved in wholesale price which gives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the purchase must be a wholesale purchase and not a retail one. In other words, the sale must be wholesale and not a retail one. In other words, the sale must be wholesale and not a retail one in order that the price realised may be termed the wholesale cash price". In that case the appellants before the Privy Counsel imported at Bombay: very large quantities of lubricating oil of a particular manufacture and mark. They sold it direct to numerous customers, never to dealers. The price they charged was the same whether a large or small quantity was bought, except that if a consumer contracted to buy from them all his requirements for a year, he was entitled to a discount from 2 to 15 per cent according to the quantity bought in the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business, must always be charged to the consumer, and which are eliminated." 7. In the case of Union of India Others v. Bombay Tyre International Ltd. etc., the Hon ble Supreme Court in para 25 reported in 1983 (14) E.L.T. 1896 of their order held : 25. Accordingly, we hold that pursuant to the old S. 4(a) the value of an excisable article for the purpose of the excise levy should be taken to be the price at which the excisable article is sold by the assessee to a buyer at arm s length in the course of wholesale trade at the time and place or removal. Where, however, the excisable article is not sold by the assessee in wholesale trade but, for example, is consumed by the assessee in his own industry the case is one where under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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