9911796707
TMI Blog1997 (1) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... ected and by another order-in-original, two refund claims were rejected. Collector (Appeals) allowed all the refund claims of which five were under Rule 97 of the Central Excise Rules, 1944, (for short, the Rules) and three were under Rule 173L of the Rules. The Collector of Central Excise, being aggrieved by the order passed by the Collector (Appeals) has filed these appeals. 2. The respondent, M/s. I.T.C. Limited, manufacturing various brands of cigarettes falling under erstwhile T.I. 4-II(2), was working under SRP as envisaged under Chapter VIII A of the Rules from 1-8-1969 to 3-4-1979 and thereafter cigarettes were brought under physical control. Parts of quantities of cigarettes cleared on payment of Central Excise duty and sold to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the cigarettes were practically worthless and had insignificant value when they were taken back and such value would necessarily be much less than the duty originally paid. It may be noted during the relevant periods, excise duty on cigarettes ranged between 150% and 250% of the value thereof. The Collector (Appeals) took the contrary view indicating that respondent, while taking back the cigarettes paid price equal to cum-duty price originally received from the dealers at the time of initial supply and since the cum-duty price would be more than the duty originally paid, the condition regarding value not being less than the duty originally paid was satisfied in these cases and respondent would be entitled to refund. 3. Shri M. Ali, JD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the respective cum-duty prices and when the cigarettes were received back amounts equal to the originally received cum-duty prices were paid to the dealers. The transactions amounted to sales and the amounts paid by respondent were paid by way of sale price. In Gopal Krishna Pillai s case, both sides agreed that the transaction by which the goods originally sold were taken back was a sale and accordingly it was held that the consideration for the sale was sale price and since it was not actually paid though promised, the claim was for a debt which represented the price of goods purchased. We have already indicated that the transaction by which deteriorated cigarettes were taken back and amount equal to the originally paid cum-duty price w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic and such as what a willing purchaser would pay to a willing seller in the ordinary course of trade. Ordinarily a purchaser would be willing to pay a price which has relevance to the value of the goods. In the ordinary course of trade, a person purchasing deteriorated goods will not pay a price equal to the price of the goods in good condition as he will not be getting in return his money s worth. It is true that the respondent preferred to pay a price equal to the price originally paid for the goods in good condition. That was not because deteriorated goods were worth that amount, but because respondent was prepared to bear the loss since if the dealers were allowed to sell the deteriorated cigarettes to customers, the image of the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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