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TMI Blog1989 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the petitioners and M/s. Modi Rubber Ltd., and held that the petitioners were not entitled to exemption under Notification No. 65/81, dated 25-3-1981 as a small scale industry as the turnover would exceed rupees two crores. 2. The petitioners produce the sheets of rubber called flaps used in the trucks alongwith the tyres. The raw material is supplied by M/s. Modi Rubber Ltd. Under the contract between the petitioners and M/s. Modi Rubber Ltd., the petitioners use the brand name "Modi Continental" and mark the flaps with the said brand name. The wholesale sale of the flap is made by the petitioners to M/s. Modi Rubber Ltd. M/s Modi Rubber Ltd. add 12% handling charges to the price at which the petitioners sell the flaps to them and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat mere use of brand name or trademark of another establishment does not make the manufacture by the seller on behalf of the buyer. On the facts of that case, the Court held "The seller owns the plant and the machinery, the raw material and labour, and manufactures the goods and under the agreements, affixes the trademark on the goods. The goods are manufactured by the seller on its own account and the seller sells the goods with the trademark affixed on them to the buyer." This principle was upheld by the Supreme Court further in the recent Judgment reported in Judgment Today, and cited as 1989(3) SC 18. In Union of India v. Playworld Electronics Pvt. Ltd., 1989(41) E.L.T. 368 (S.C.) the Supreme Court further laid down that even though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not related persons, within the meaning of Section 4(4) (c) of the Act, it is not the buyer's price but the seller's price that is relevant. In other words, the value cannot be determined u/s 4(i)(a) and (iii). [Union of India v. Cibatul Ltd., 1985 (22) E.L.T. 302; joint Secretary to Govt. of India v. Food Specialities Ltd. -1985(22) E.L.T. 324]. 5. The Assistant Collector has held that the buyer and seller are the interrelated persons on the following considerations: The buyer uses the brand name of the seller; the flap with the brand name is sold wholesale by the buyer through its own depot; the flaps are not sold in open market by the seller. The impugned order also notices that the raw material is supplied by the seller to the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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