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TMI Blog1989 (7) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... tors manufactured by the Petitioner-Respondent Company. Before we deal with the question, we may briefly set out the facts. 2. The International Tractor Company of India Ltd. with which the Petitioner Company subsequently had merged during the period from 4th October 1971 to 11th February 1972 and from 14th February 1972 to 12th October 1972 had sold diverse number of tractors of the said Company to M/s. Voltas Ltd. under a distributorship agreement dated 17th March 1970. The said distributor Company in turn had sold the said tractors to various parties. In the event the said sales during the two periods in question were on the basis of principal to principal without any extra commercial considerations as claimed by the Petitioner-Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the learned Counsel for both sides and having perused the materials on record, we are in entire agreement with the learned Single Judge that in the present case the price charged by the manufacturer Company for sale of its products to the distributor had been rightly held by the learned Single Judge to be the wholesale price within the meaning of Section 4(a) for the purpose of assessment of excise duty. Accordingly, the refund claims made by the Petitioner Company were wrongly rejected by the Assistant Collector after remand made by the Appellate Collector. 4. The law on the point is well settled. We will, therefore, deal with the same in brief before dealing with the terms of the agreement under which the transactions in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales would not be the wholesale cash price for levying excise under Section 4(a) of the Act. A sole distributor might or might not be a favoured buyer according as terms of the agreement with him are fair and reasonable and were arrived at on purely commercial basis." 5. In the case of Atic Industries v. Asstt. Collector, Central Excise, 1978 (2) E.L.T. (J 444) = A.I.R. 1975 S.C. 960, the same view was taken about the indicia of the wholesale cash price within the meaning of Section 4(a) of the Central Excises and Salt Act (as the said provisions stood prior to 1st October 1975). Bhagwati, J. (as he then was) in paragraph 13 of his judgment in Atic Industries' case (supra) had reiterated that where a manufacturer sold the goods manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreement of distributorship. Mr. Desai appearing on behalf of the Appellants and Mr. Atul Setalvad appearing on behalf of the Respondents both referred to various terms of the distributorship agreement. Having perused them, we find no reason to doubt in any other way about the nature and effect of the said agreement between the manufacturer Company and its distributor M/s. Voltas Ltd. Under the said agreement made on 17th March 1970 between the present Petitioners' predecessor the International Tractor Company of India Ltd. and M/s. Voltas Ltd., the Company had granted the latter sole and exclusive right to sell in the whole of India its products listed in Schedule including parts thereof. Under clause 3(b) of the said agreement, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from its factory to Voltas or its dealers and other outlets or to a customer of Voltas." We may also refer to clause 4 of the agreement under which the terms of payment for all products purchased by the distributor Company was net cash 18 days from the date of delivery. 8.We are unable to accept the submission made on behalf of the Appellate that in view of the provisions relating to sharing the advertising expenses referred to in clause 15 of the agreement and the competing lines referred to in clause 17 thereof, the agreement between the Company and its distributor was not at arm's length. Mr. Setalvad has rightly submitted that both the Company and the distributor had mutual interest in maximising the sale of the products in question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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