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TMI Blog1989 (4) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner is alleged to be the owner of the finished goods until and unless the same is sold to the purchasers. In or about 1964, the petitioner Company is alleged to have commenced manufacturing rubber transmission belting which is an excisable goods under Tariff Item 16-A(4), the duty being ad valorem. The Company is also alleged to have relevant L-IV Licence from the Excise Authorities as manufacturer of the products and obtained various other statutory licences. It is claimed in details that since the petitioner started manufacturing excisable goods i.e. rubber transmission belting, it paid excise duty on products duly manufactured by complying with of all the formalities required under the Central Excise Rules. It goes on claiming that since about 1966 under and in terms of an agreement with Messrs. Goodyear India Limited, the Company has been manufacturing transmission belting as per the orders placed by the said Messrs. Goodyear India Limited and according to their technical specifications. The said products were manufactured out of the raw materials purchased by the petitioner Company in its own plant and machinery and by engaging its own labourer/staff after manufacturing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the amended provision of law, the petitioner Company duly submitted its price-list for the determination of assessable value showing the price at which the petitioner Company sold the products to Messrs. Goodyear India Limited for the purpose of determination of assessable value. As the Excise Authorities did neither approve nor reject the price-list submitted by the Company on September 30, 1975, the petitioners moved a writ application and C.R. No. 12582-83(W)/76 was issued. The said Rule was disposed of in terms of judgment dated 20-5-1980 by S.C. Deb, J. (As His Lordship then was) directing the respondents to approve the price-list by determining the assessable value of the products which were the subject matter of the said writ petition and the respondents were directed to give an opportunity for personal hearing to the petitioner before such approval and the petitioner will be at liberty to make submissions. It was made clear that if the petitioner is aggrieved by the order determining the assessable value the petitioner was given liberty to take such action or steps as may be advised. In spite thereof, the respondent No. 2 the Assistant Collector of Central Excise, Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actured by the petitioner, the same are embossed with the patented brand name of the respondent No. 4 and sold to them by raising invoices. The respondent No. 4 has to make payment of the agreed price of the goods. The transaction are on principal to principal basis and are in the usual course of business. At no stage prior to the sale of the finished products, the respondent No. 4 becomes the owner of the goods. After the said goods is transferred to the said respondent No. 4 and when the goods are delivered to the respondent No. 4 after sale they became owners. The petitioner Company, is, however, at liberty to make any manufacture any rubber products and free to sell its manufactured products to purchasers, but once the brand name of Goodyear is embossed on the products the same becomes the property of the respondent No. 4 and under the terms of the agreement, the petitioner cannot sell the branded products to any other person except the Goodyear. The respondent No. 4, however, made representation to the Collector of Excise Duties by letter dated 8th of January, 1976 whereby it was contended that the respondent No. 4 is not the manufacturer within the meaning of Section 2(f) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Law. By the said trade notice the attention of the trade and industry was also invited to the provisions of Rule 174 of the Central Excise Rules, 1944 wherein every manufacture of excisable goods was required to take out a licence unless exempted under Section 174A and the law required that such manufacturers should not conduct business in regard to such goods otherwise than by authority and subject to the terms and conditions of licence granted by an authorised Officer in the appropriate form. Messrs. Goodyear India Limited made representation on or about May 13, 1976 against a notice dated December 17, 1975 issued by the Superintendent of Central Excise, Sahagunj Range requested Messrs. Goodyear India Limited to take out a licence for the goods manufactured by Messrs. Dunlop India Limited on their behalf nor the said representation, of Messrs. Goodyear India Limited requested the Collector of Central Excise and Customs, West Bengal for fixing a date for discussion. The Collector of Central Excise and Customs did not find any scope for discussion on the subject as the procedure for obtaining licence would be the same in any of the Collectorates. Thereafter, by a lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in compliance with the direction and/or orders the Assistant Collector passed an order on or about September 14, 1980 after affording reasonable opportunity to the petitioner. In the said order, the Assistant Collector held that the issues involved in the case as to whether Messrs. Goodyear India Limited was to be reckoned as "manufacturer" or as to how the value of the goods manufactured with the brand name of Messrs. Goodyear India Limited was to be determined. It was held by him that the selling price at which Goodyear India Limited sold/sells the goods to their dealers/customers not being related persons in course of wholesale trade, would be the normal price for the purpose of determination of assessable value. It is further stated that the petitioner Company did not go in appeal against the order of the respondent No. 1 passed pursuant to the direction of the High Court in Civil Order No. 13660 (W) of 1976; it is not open to either to the petitioner or to Messrs. Goodyear to make a different plea and the present petition is otherwise speculative and misconceived. All other allegations made by the petitioner Company have been denied and disputed. The petitioner Company has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and time to time the finished products are inspected by the agents and/or representatives of Messrs. Goodyear India Limited. It is not proved before this Hon'ble Court by any materials whatsoever that the goods are manufactured at the place of the petitioner No. 1 by men and materials and/or funds and finance provided by Messrs. Goodyear India Limited. There is nothing to infer and surmise that the goods in question were and are manufactured by Messrs. Goodyear India Limited. Any admission by either party contrary to such facts cannot be conclusive and the admission, if any, can be explained properly under which context the same was made. In the instant case, this Court has the occasion to examine the pleadings of the parties and to scrutinize the relevant materials on record. There cannot be any other conclusion (but?) that the goods manufactured by Serampore Belting Works Limited at its own factory with its own men and materials are not to be deemed as manufactured by Messrs. Goodyear India Limited. If the goods are manufactured by Serampore Belting Works Limited under specific terms and conditions to be sold exclusively to Messrs. Goodyear India Limited it has to be ascertained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at page 685 = 1985 (22) E.L.T. 324 (S.C.) (Joint Secretary to the Government of India Ors. v. Messrs. Food Specialities Limited). It has been found that where the assessee Company manufactures the goods according to the specifications supplied by Nestle's another Company and affixes the trade mark of the latter on the goods and supplies the same to the latter at the wholesale price free on Rail at the place of its head office or free on lorry at factory stipulated under the agreements, it is the wholesale price of such goods that must determine the value for the purpose of assessment of excise duty. The value of the trade marks cannot be added to the wholesale price for the purpose of determining the value of the goods for the purpose of levy of excise duty. There can, therefore, be no doubt that the wholesale price at which the goods with the trade marks affixed to them are sold by Serampore Belting Works Limited to Messrs. Goodyear India Limited as stipulated under the agreement would be the value of the goods for the purpose of the excise duty, i.e. the price at which the petitioner No. 1 Company sells the goods to the respondent No. 4 in the course of wholesale trade. 4. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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