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TMI Blog2012 (12) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... . The rate charged from HCR was 30% less than the rate charged from the other three distributors. 4. The Department issued show cause notice dated 26-7-1999 to the appellant invoking extended period of limitation demanding differential excise duty on the supplies effected to HCR by taking transaction value as the value charged from the other three distributors. 5. The appellant contested the show cause notice and vide letter dated 15-9-1999 claiming that the appellant was justified in charging lesser rate from HCR because it was bulk purchaser. The plea of the appellant did not find favour with the adjudicating authority and the duty demand to the tune of Rs. 10,78,120/- for the period from October, 1996 to February, 1999 was confirmed against the appellant with interest and penalty of equal amount was imposed. The appellant preferred the appeal against the order-in-original. The Commissioner (Appeals) confirmed the order-in-original. 6. The appellant feeling aggrieved by the order of the Commissioner (Appeals) preferred an appeal before the Tribunal and the Tribunal remanded the matter back to the Commissioner (Appeals) directing him to rehear the appeal on merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cludes a holding company, a subsidiary company, a relative and distributor of the assessee, and any sub-distributor of such distributor. Learned Counsel for the appellant has drawn our attention to letter dated 1-9-1996 addressed by the Regional Accounts Manager, West Coca Cola to the General Manager, Parle Beverage Limited, Bombay wherein it is stated that McDonand's which is an international fast food chain, is likely to open an outlet at Linking Road at Bombay and since M/s. Coca Cola India has a tie-up with McDonand's Worldwide, a special rate would have to be offered to them in view of large volume of syrup they would consume. In the context of this letter, the learned Counsel has submitted that special rates were offered to HCR which owns McDonald's family restaurant chain for the reason that they were considered as bulk purchasers of syrup accounting for more than 75% of total production. Thus, it is contended that the appellant was justified in selling the edible syrup to M/s. HCR at a lesser rate than the supplies made to other three distributors and he had rightly paid the duty of the transaction value in terms of Section 4 as it then existed. Learned Counsel expanding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butors during the period in question. This knocks down the theory that the bulk purchase was the basis of charging lesser price. Thus, it is contended that the duty demand has rightly been raised on the difference of the price charged from the other three distributors and the lesser price charged from McDonald's. In support of his contention Shri Meena has relied upon the judgment of the Supreme Court in the case of C.C.E., Calcutta II v. TISCO Ltd. - 2004 (174) E.L.T. 307 (S.C.). 13. We have considered the rival contentions and perused the record. It is not disputed that during the period in question, the appellant charged lesser price for the edible syrup supplied to HCR as compared to the rate charged from other distributors. It is also not in dispute that the appellant in respect of supplies made to HCR paid excise duty on the price charged from them. 14. On reading of the proviso (i) to Section 4(l)(a) of Central Excises Act, 1944 as it was applicable at the relevant time, it is evident that during the period in question, there was no bar on the assessee to sell the goods at different price to different classes of buyers and pay excise duty on the basis of the pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged from the other distributors and was justified to avail of the benefit of proviso (i) to Section 4(l)(a) of the Central Excises and Salt Act, 1944 as it then existed. Thus, the finding of the Commissioner denying the benefit of the aforesaid proviso to the appellant is not sustainable in law. 17. The next factor for consideration is whether lesser rate was charged from HCR out of some extraneous consideration. Shri S.R. Meena, the learned D.R. has submitted that the appellant has charged lesser rate from HCR not because the HCR was a bulk purchaser but because of admitted international business tie-up between McDonald's Chain of Restaurant and M/s. Coca Cola, the parent company of the appellant. We are not convinced with this argument. Merely because there was international tie-up between the parent company of the appellant and M/s. McDonald's Chain of Restaurant, it cannot be said that the appellant had sold edible syrup to M/s. HCR for extraneous consideration. In order to establish extraneous consideration, the Department has to establish that some extraneous arrangement was worked out between the appellant and M/s. HCR with a view to evade payment of excise duty under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing industry and another being a heavy duty machinery manufacturing industry or third being an electric motor manufacturing industry could all be different classes of buyers. But these are facts which must first be averred and then proved. It is only on the basis of facts averred and shown that a conclusion can be reached that the sale is to a different class of buyer. In this case except for broadly stating that the sale is to a different class of buyer the Collector (Appeals) has not given any 'reason as to how he concludes that TELCO was a different class of buyer. The only reason for concluding that the TELCO was a different class of buyer appears to be because a different price was charged from it. That by itself is not sufficient. On the facts of this case it is clear that there was no material to show that TELCO was a different class of buyer." On reading of the above, it is evident that as per the finding of the Supreme Court, the assessee can pay excise duty at lesser transaction price at which the goods were sold to one category of buyer provided he is able to show cogent reason as to how the buyer fall within different class of buyer. Supreme Court has held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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