9911796707
TMI Blog2012 (12) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri Balbir Singh, Advocate, for the Appellant. Shri S.R. Meena, AR, for the Respondent. [Order per : Justice Ajit Bharihoke, President (Oral)]. Appellant M/s. Parle Bisleri Pvt. Ltd. (formerly known as M/s. Parle Beverages Ltd.) was engaged in the manufacture of aerated water and edible syrup with effect from October 1996 to February 1999. 2. The appellant at the relevant time, was having three distributors, namely, Parle Marketing Services, Parle Sales Services and K.R. Sales to whom they were marketing. Besides supply to said three distributors, the appellant was also supplying edible syrup to Hard Castle Restaurant (HCR) who are running the chain of McDonald s family restaurant. 3. The appellant was charging different rates for clearance of the edible syrup at their factory gate from the said three distributors and HCR. 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 transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to each such class of buyers; 10. Learned Counsel for the appellant submits that proviso (i) to Section 4(1) makes it clear that the assessee at the relevant time could sell his goods at a different price to different class of buyers and pay excise duty on the amount charged subject to the condition that the buyer to whom the goods were sold at a lesser price was not a related person and there was no extraneous consideration for charging lesser price. Learned Counsel submits that in the instant case, there is no evidence on record to bring the appellant i.e. M/s. HCR within the definition of related person as defined in Section 4(3)(c ) as under : 4(3)(c) related person means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant from M/s. McDonald s chain of restaurant for extraneous consideration, i.e. McDonald s Chain of Restaurant was having international tie-up with the appellant s parent company M/s. Coca Cola and HCR the owner of McDonald s chain of restaurant was also bottling aerated water for M/s. Coca Cola India. Learned Shri S.R. Meena further submits that plea of the appellant that he was given special concessional rate being different class of customers is difficult to believe in view of the fact that with effect from 24-2-99, the appellant company started selling its entire stock of edible syrup to M/s. Hindustan Coca Cola Bottling Company at assessable value of Rs. 984.24 and Rs. 492.12 for 18 Litres and 9 Litres pack respectively which was the rate equivalent to the higher rate charged from other three distributors 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 ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. Sales and Parle Sales Services are the marketing companies who after purchasing the edible syrup from the appellant market the same to the retail consumers. However, the case of HCR is different for the reason that M/s. HCR admittedly had purchased edible syrup not for marketing but for captive consumption for McDonald s Chain of restaurant. Thus it is evident that HCR is different class of buyers as compared to the three distributors of the appellant company. Further from the records it is evident that M/s. HCR is bulk purchaser which on average picked up almost 30% or more of the production of the appellant. By this standard also M/s. HCR falls within the distinct class of buyer and as such the appellant was well within its right to clear the edible syrup at a price less than the price charged 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llector (Appeals) notes :- Whether a particular buyer constitutes a class of buyers or not, will depend upon the trade practice. Yet the Collector (Appeals) then ignores the fact that there is no averment nor proof of any trade practice. Further, the observations of the Collector (Appeals) that the price charged to a buyer treating it as a different class of buyer should be the normal price unless there is an evidence to hold that such buyer is a related person of the assessee, is a wrong proposition of law. Cogent reasons must be shown as to how the buyer is a different class of buyer. There can be various reasons why a buyer becomes a different class of buyer. A bulk purchaser or persons situated in different locations or different industries for example one being a car manufacturing 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 broad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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