9911796707
TMI Blog2012 (7) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, assessee is liable to pay excise duty on removal of goods from its factory situate at Bhimtal, Uttarakhand. Assessee has only one customer i.e. the holding company of the assessee. The said customer, therefore, is a related person in so far as the assessee is concerned. This related person of the assessee sells the goods manufactured by the assessee, not in wholesale, but in retail. In order to facilitate such sale in retail, the assessee has set up depots at various places, including some within the State of Uttarakhand. There appears to be no dispute to the aforementioned factual matters. 2) Since the goods dealt with by the assessee have no wholesale market, the value of the excisable goods manufactured by the assessee is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to yet another related person, who sells such goods in retail. This contingency, as contemplated, does not apply to the instant case, inasmuch as, that the person related to the assessee does not sell the goods in the wholesale market or to dealers or to yet another related person; instead, there is no dispute that, the related person in this case sells the goods to the ultimate customer. Clause (b) of sub Clause (1) of Section 4 directs that when normal price i.e. the wholesale price is not ascertainable, then the nearest ascertainable equivalent should be determined in such manner as may be prescribed. That has been prescribed by Rule 6 of the Central Excise (Valuation) Rules 1975. Clause (c)(i) of the said Rule provides that when the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured goods to the customer who pays for the price of the goods as manufactured as well as the price of reaching the goods to him. In this connection, reference was made to the Explanation 1 to Section 4A of the Act. It was submitted that cost of carrying the goods to the ultimate customer is one of those factors which has been taken note of while specifying what retail price is. It was also submitted that proviso to Clause (a) of Rule 6 not only directs to take into account trade practice in the commodity, but also the nature of the excisable goods and other relevant factors for the purpose of determining which amount should be reduced proceeding on the basis that the same was necessary and reasonable. The learned counsel for the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same time in the Rules, while it has not been said that cost incurred on freight, transportation, insurance etc. should be deducted, it has been provided that the reduction of such amount as is necessary and reasonable be made. Therefore, the conclusion would be that, while there is no direction that the freight and insurance charges for carrying the goods from the factory to the depot is to be reduced from the retail price, there is no bar in reducing the same and, while doing so, as provided in the proviso, the proper officer is required to take note of the nature of the excisable goods, the trade practice in that commodity and other relevant factors. The carrying cost for taking the goods from the factory to one depot may be at variance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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