9911796707
TMI Blog1997 (7) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... erent brand names, three brand named 'Exide', 'Index' and 'Dagenite' belonging to the appellant and another brand name `Lucas' belonging to M/s. Lucas India Services Ltd. (for short, LISL). Batteries under brand name Lucas are manufactured pursuant to the franchise agreement with the owner. The entire production of Lucas batteries are sold to LISL. However, the other batteries bearing brand name of the appellant are sold to wholesale dealers. Appellant had filed different price lists in Part I showing price to wholesalers in the case of own brand name and showing price to LISL in the case of Lucas brand batteries. After approval of the price lists goods were being cleared on payment of appropriate duty. 3. Show cause notice dated 11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty payable. 4. In the course of adjudication proceedings, the appellant stated that while 26% discount was being given to wholesale dealers in regard to batteries with appellants brand name, discount of 42% was being given to LISL in respect of Lucas batteries and higher discount was being given since appellant had no responsibility for advertisement, distribution, cost of warranty and after sales services. 5. Assistant Collector confirmed the demands and in doing so held that the prices at which LISL sold Lucas batteries were controlled by the appellant and as such there was indirect interest in the business of appellant and LISL and as such the price charged by LISL which was the price advised by the appellant could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries were sold were offered only 26% discount. 7. Lower authorities held that the appellant and LISL are 'related persons' as defined in section 4(4)(c) of the Central Excise Act on account of four reasons, namely, the entire quantity of Lucas batteries were sold only to LISL, that appellant was controlling the price of Lucas batteries, maximum consumer price shown in the price lists was higher than the declared price and it covered the cost of advertisement, marketing expenses, etc., that discount to LISL was much higher than discount to other wholesalers and the aforesaid circumstances evidenced indirect mutual interest. 8. The circumstances that the entire quantity of Lucas batteries were sold to LISL by itself cannot be a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyers of appellants brand name batteries. One should not miss the fact that lower discount was being given by the appellant in regard to their own brand name batteries in respect of which they would be directly interested in sales promotion, warranty, after sales service etc. for which appellant would have to incur expenditure. In the case of Lucas brand batteries, the entire production was being sold to LISL and the brand name involved is not that of appellant but that of buyer. In those circumstances if the buyer incurs expenditure on sales promotion, cost of warranty, etc., the buyer would be doing so on their own and not for and on behalf of the appellant. We have already indicated that there is no specific material to show any mutualit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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