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TMI Blog2019 (2) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulators classifiable under Chapter 85 of the Central Excise Tariff Act. The appellant sold the goods at the factory gate and also stock transferred to their depots for further sale. The appellant also sold some quantity of the goods to Exide Products Limited (EPL) who further sold the goods to independent customers. The price for the goods sold at the factory gate was adopted as the price for sale to EPL on which excise duty was paid. Proceedings were initiated against the appellants by notice dated 28.6.1999 on the ground that since EPL is a related party, the price at which EPL sold to their customers should be adopted as the basis for determining duty. The notice proposed to demand differential duty of Rs. 42,23,240/- for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings of the Commissioner in the impugned order relied on the judgment of the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs Detergents India Limited 2015 (318) ELT 559 (SC) to contend that since the assessee was selling goods through related party, Section 4(1)(a)(iii) of the Central Excise Act, 1944 was applicable. 5. The Ld. Counsel for the appellant in his rejoinder contended that the Hon'ble Supreme Court had laid down applicability of Section 4(1)(a)(iii) of the Central Excise Act, 1944 under three circumstances, i. e. (i) presence of arrangement, (ii) sale of goods generally through related party and (iii) sale of goods directly and indirectly through related party. It was submitted that first condition was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d below:- "(iii) Where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person. The normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal of dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons), who sell such goods in retail." The above provision clearly stipulates that the same will apply when the goods are generally not sold in wholesale trade except to or through the related person. In the present case, admittedly the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wholesale dealers does not constitute normal value of the goods. Sales to the subsidiary are at the same price as to wholesale dealers. In such a situation, we are not able to agree with the finding in the impugned order that the goods have not been generally sold to wholesale dealers and that proviso (iii) to Section 4(1)(a) is attracted in the present case. This position remains settled by the decision of the Hon'ble High Court of Bombay in the case of Cosmos (India) Rubber Works, Pvt. Ltd. & Anr. and the other decisions relied upon by the ld. Counsel for the appellants. We do not find this position anyway affected by the fact that most of the sales are from the depots of the assessee. 8. In view of our above findings, we hold that provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deals with the price that is to be taken into consideration in case sales are made to related persons. Three basic ingredients are necessary before proviso (iii) gets attracted. The first ingredient is that the assessee must "arrange" that goods are sold by him in a particular manner. The second ingredient is that such arrangement must be such that the goods are "generally" sold by the assessee in the course of wholesale trade to or through a related person. And thirdly, such sale need not be to the related person - it can even be through the related person. 11.We are of the view that the "arrangement" spoken of in the proviso must be something by which the assessee and the related person "arrange" that the goods are sold at something b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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