9911796707
TMI Blog1981 (3) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Synthetic Resin Products. They were selling their products to M/s. Parekh Agencies who were their Principal Distributors. The goods were sold to Parekh Agencies at the list price minus a trade discount of 10%. Up to 31-5-75 they were paying Central Excise duty on the list price i.e. without any deduction of the trade discount given by them to Parekh Agencies. When they came to know of the decision of the Supreme Court in the case of Atic Industries Ltd. v. M.M. Dave and Others, they realised that they were entitled to deduct the discount from the assessable value. They filed a fresh price list where they claimed the deduction of the 10% discount for determining the assessable value. They also filed 4 refund claims for the duty paid in ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners. It is the normal commercial practice for manufacturers to give commission on the sales to wholesale dealers. Prior to 1967, the petitioners did not have any sales division to sell their products and for the period between 1965 to 1967 their sales were made to Fedco Pvt. Ltd. who were their principal distributors and the petitioners were giving trade discount on their sales to Fedco, which practice was in vogue even prior to the introduction of Central Excise duty on Dispersed Organic Pigments and Pigment Dyestuffs. They have stated that in 1967 Fedco had some trouble and practically wound up its activities and, therefore, the petitioners started selling their goods to M/s. Parekh Agencies to whom also they gave more or less the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that out of 4,00,000 shares of Atic, M/s. Atul Products Ltd. hold 1,99,996 shares and Imperial Chemical Industries hold 1,99,996 shares. They have contended that the test laid down by the Supreme Court viz. "Transactions at arms, length" if applied to their case would show that they were entitled for deduction of the discount. (iii) They have drawn attention to the fact that Parekh Agencies in turn sold their goods to consumers and wholesale dealers to whom they passed on a substantial quantum of discount. They have filed the certificate given by their Chartered Accountants certifying that during the period 1-7-1974 to 30-6-1976 they gave to their wholesale dealers discount/commission of 7-1/2% They have further certified that for the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a substantial part of the discount to their wholesale dealers. There is no evidence on recording to show that Parekh Agencies were favoured buyers to whom a specially low price was charged. The following observations of the Supreme Court in Atic's case would be relevant:- "There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arms, length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the . The conclusion, is, therefore, inescapable that the assessable value of the dye stuffs manufactured by the appellants must be taken to be the price at which they were sold by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
