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TMI Blog1976 (2) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... s City. For the purpose of effecting the sale of their tyres, they have a separate sales and technical service organisation independent of its manufacturing unit. In the year 1967, this sales organisation consisted of six sales divisions or districts, each one of the division consisting of 2 or 3 States and as many as 25 sales depots including branches, functioning under the Divisional or District Office. The petitioners do not enter into any sales of their tyres for delivery at the factory gate. On the other hand, they make the tyres available to their consumers throughout India through their dealers, at a uniform price. For this purpose they have two prices, one the 'billing price' and the other the `list price'. The billing price is a un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the levy under the Act should be restricted only to the manufacturing cost plus manufacturer's profit. By an order dated 9-7-1970, the Superintendent of Central Excise, Madras North, the first respondent herein, informed the petitioners that section 4 of the Act did not provide for any abatement of duty in respect of post-manufacturing expenses incurred by the company from the assessable value and that, as such the company is not entitled to reduction of any post-manufacturing expenses. As against that order, the petitioners went on appeal to the Collector of Central Excise, who, however, by his order dated 9-11-1970 confirmed the original order passed by the first respondent. His view was that Section 4 of the Act provided for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken to be part of their factory and the sales effected at those depots should be deemed to be the sales at the factory gate and therefore, the price charged for the articles at the sales depots should be taken as the wholesale cash price, irrespective of the fact whether such price includes the cost of transport, insurance or of any other services. 1t is said on behalf of the respondents that the wholesale market price is the price charged for the goods article at the time when it enters the stream of trade, and that the goods having entered the stream of trade on their sales effected in the sale depots, the price charged at the sale depots should be taken to be the wholesale cash price. ***** 14. The Excise Department itself has accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be excluded. In the matter of detail, the Board has observed that the following expenses could be considered as referable to sales organisation : (a) Distribution expenses when they are reasonable and pertain to salaries and emoluments of that portion of the staff who is wholly engaged in the organisational work of the Wholesale Depot; (b) Travelling expenses when they are reasonable and pertain to the inspection Staff of the Sales Organisation; (c) Expenses on advertisement wholly attributable to the Sales Origination; (d) Insurance charges on footwear in transit to various customers and Sales Depots as well as those incurred on the stocks in Sales Depots. Insurance charges on account of stores and stocks in the factory and on goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile rejecting the contention of the respondents that the sale price charged by the last wholesale dealer to the retail dealer alone should be taken as the wholesale cash price, the Supreme Court pointed out that the only relevant price for assessment of value of the goods for the purpose of excise in such a case would be the price which the manufacturer receives from the first wholesale dealer, that is, when the goods first enter the stream of trade and that once the goods have entered the stream of trade and are on their onward journey to the consumer, whether along a short or a long course depending on the nature of the goods and the conditions of the trade, excise is not concerned with what happens subsequently to the goods. Having regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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