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TMI Blog1985 (9) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery, the raw material, the labour and manufactures the goods and under the agreements,affixes the trade marks on the goods. The goods are manufactured by the seller on its own account and the seller sells the goods with the trademarks affixes on them to the buyer. We hold that the High Court is right in concluding that the wholesale price of the goods manufactured by the seller, is the wholesale price at which it sells those goods to the buyer, and it is not the wholesale price at which the buyer sells those goods to others. Appeal dismissed. - 2619 of 1977 and 4399 of 1985 - - - Dated:- 27-9-1985 - P.N. Bhagwati, C.J.I., R.S. Pathak and A.N. Sen, JJ. [Order per: Pathak, J.]. - These appeals by special leave are directed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured under the two agreements would bear certain trade marks which were the property of the foreign company, Ciba Geigy of Basle. In this connection, on December 7, 1971 a tripartite agreement was executed between the buyer, the seller and the foreign company in respect of four trade-marks. Areolite, Melocol, Melolam and Resicart. The foreign company, which owned these trade marks, as well as the seller recognised the buyer as the registered or licensed user there of. The buyer authorised the seller to affix the said trademarks on the products manufactured under the first contract, and the seller was to do so "as an agent for and on behalf of the buyer and not of his own account". The seller had also agreed to refrain from selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sob-section (2) of Section 36 of the Act, and the orders made by the Assistant Collector were restored. The respondent filed a writ petition in the Gujarat High Court against the orders of the Central Government, and the High Court held that the Central Government was wrong and the Appellate Collector was right on the question as to the liability of the seller to excise duty. 4. The basis on which the Central Government proceeded in holding that the wholesale price of the goods should be the wholesale price charged by the buyer is that the goods were manufactured by the seller on behalf of the buyer, specially a they were embossed with the trade-mark of which the buyer alone was the registered user in India, that the two agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods and the seller merely manufactures them on behalf of the buyer. 6. The entire question before us is whether the goods are manufactured by the seller or are manufactured by the seller on behalf of the buyer. The relevant provisions of the agreements and the other material on the record show that the manufacturing program is drawn up jointly by the buyer and the seller and not merely by the buyer, and that the buyer is obliged to purchase the manufactured product from the seller only if it conforms to the buyer's standard. For this purpose the buyer is entitled to test a sample of each batch of the manufactured product and it is only on approval by him that the product is released for sale by the seller to the buyer. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout the advantage of those trade-marks. The trade-marks are affixed only after the goods have been approved by the buyer for sale by the seller to the buyer. The seller owns the plant and machinery, the raw material, the labour and manufactures the goods and under the agreements,affixes the trade marks on the goods. The goods are manufactured by the seller on its own account and the seller sells the goods with the trademarks affixes on them to the buyer. 8. The appellant has invited our attention to certain observations in Union of India v. Delhi Cloth and General Mills - (1963) Supp. 1 SCR 586 at 592 and 598 = 1977 E.L.T. (J 199) (S.C.), South Bihar Sugar Mills Ltd., etc. v. Union of India and others (1968 3 SCR 21 at 31 = 1978 E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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