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TMI Blog1985 (8) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st July, 1978 passed by the Appellate Collector Central Excise (Annexure 'C' to the writ petition). 3. The petitioners M/s. Redihot Electricals are manufacturers of domestic electrical appliances. These electrical appliances are chargeable to excise duty under Tariff Item No. 33 C. ad valorem excise duty is chargeable with reference to the value of the appliances and the value of the appliances is required to be determined under Section 4(a) of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act'). 4. The petitioners had filed their list of prices with the excise authorities which was approved and the goods were being cleared on payment of excise duty on the basis of the approved list. 5. It a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash price received by the petitioners from their customers. 9. The excise authorities found that out of the aforesaid two demands the amount to the extent of Rs. 21,660.58 was within time and rest was barred by time so to that extent relief was granted to the petitioner but otherwise the submission of the petitioners was rejected. It was held by the appellate authorities that "the appellants manufactured appliances bearing brand name on behalf of M/s. Racold and M/s. Killick and, therefore, Central Excise duty should be paid on these goods on the basis of the prices at which these are sold by M/s. Racold and M/s. Killick." 10. The petitioners had challenged this part of the finding of the appellate authorities. 11. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce wholesale dealings at arm's length are established, the determination of the wholesale cash price for the purpose of Section 4(a) of the Act may not depend upon the number of such wholesale dealings." Thus the expression used by the Supreme Court "if the agreements were made at arm's length" were explained by the Supreme Court itself namely contracts which should not be tainted by extra-commercial considerations. 13. It is nobody's case that the contracts with M/s. Killick and M/s. Racold suffer from the vice of extra-commercial considerations. Therefore, the decision of the Supreme Court in the aforesaid case is fully applicable to the present case and the excise authorities were not right in treating the sale price of M/s. Kill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y now proceed directly to the consideration of certain aspects of the provisions of the old Section 4. There has been serious argument on the question whether Section 4(a) provides for the value of the assessee's excisable article being determined on the basis of the wholesale cash price charged or chargeable for articles of the like kind and quality sold by manufacturers generally or on the basis of the wholesale cash price for articles of the like kind and quality sold by the assessee. At first blush, it would seem that the former construction should be accepted, and indeed some support can be derived for that view from the observations of the Privy Council in Vacuum Oil Co. (A.I.R. 1932 P.C. 168) (supra), where the "Wholesale cash price" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and place of sale and if that was a "wholesale cash price", the clause was not inapplicable for want of sale of other goods of a manufacturer. The practical way of looking at the problem is that there are very few cases indeed where two manufacturers produce an article of the like kind and quality, an instance has been supplied by learned Counsel for the assessees and we are referred to the case of a factory which manufactures identical electric bulbs for supply to a number of companies who sell them in the market under their own distinctive trade names. While such examples are possible, we are inclined to accept the statement of the learned Solicitor General that goods manufactured by different manufacturers generally differ in both ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed by the assessee in his own industry the case is one whereunder the old Section 4(a) the value must be determined as the price at which the excisable article or an article of the like kind and quality is capable of being sold in wholesale trade at the time and place of removal." 17. Both the decisions of the Assistant Collector of Central Excise as well as the Appellate Collector Central Excise are, on the face of them, contrary to the aforesaid dicta in the cases A.K. Roy and another v. Voltas Limited (supra) and Union of India and others v. Atic Industries Ltd. (supra). 18. There was no question of any short levy in the circumstances and therefore, the notices issued under Rule 10 of the Central Excise Rules, 1944 were w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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