9911796707
TMI Blog1990 (10) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... Services (India) Limited, which is a wholly owned subsidiary company of petitioner No. 1, and which acts as an authorised distributors of the products manufactured by petitioner No. 1. The price at which the diesel engines are sold, both to the direct customers and to the subsidiary company are commercial price consisting of manufacturing costs and manufacturing profits of petitioner No. 1 Company in respect of diesel engines. The petitioners claim that in no circumstances the price charged and recovered from the subsidiary company is concessional price and the sole consideration for the sale of engines to the subsidiary company is the price which is equal to that recovered from sale to individual buyers. 2. Amended Section 4 of the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidiary company to the purchasers as relevant for determination of the assessable value. 3. The petitioners filed refund application dated October 8, 1976 for refund of duty illegally recovered between the period October 1, 1975 to September 30, 1976 and the amount claimed was Rs. 6,81,079.36. The company also informed the assessing authorities that any future payment based on the second stage price would be made under protest. The excise authorities then informed the Company that the refund claim is receiving attention. Second refund application was filed by the Company on February 15, 1980 for the period from October 1, 1976 to September 30, 1979 and the amount claimed was Rs. 18,65,710.04. On August 18,1980 the Assistant Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and challenged the order of the Assistant Collector passed on February 16, 1983 and now the question for determination is about correctness of that order. Shri Setalwad, learned counsel appearing on behalf of the Company, submitted that the Assistant Collector was clearly in error in holding that the price charged by the subsidiary company to their purchasers should be taken into consideration for determination of assessable value of high horse-power diesel engines manufactured by the company. The learned counsel did not dispute that the subsidiary company of the assessee is a related person as contemplated by Section 4(1)(c) of the Act. The expression "related person" means a person who is so associated with the assessee that they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Sec. 4(1)(a)(iii) to hold that the price charged by the subsidiary company to their purchasers should be relevant for determining the assessable value. It is therefore necessary to set out proviso (iii) in its entirety. (iii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of Shri Desai that the sales of the Company is not wholesale trade as prescribed under Section 4(4)(e) of the Act. Shri Setalwad points out that most of the engines manufactured by the Company are sold to the industrial consumers and therefore the sales clearly fall within the expression "wholesale trade". In our judgment, the Assistant Collector was clearly in error in holding that the price charged by the subsidiary company to their purchasers should be taken into consideration for determining the assessable value. The price at the second stage of sale is not relevant and such assessment is not permissible under any of the provisions of Sec. 4 of the Act. In our judgment, the Asstt. Collector was in error in refusing to grant the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before a certain date and that too with interest. Shri Desai stated that the amount of refund would be paid on or before December 31, 1990. As regards interest Shri Desai submitted that no case has been made out for grant of interest. Shri Setalwad on the other hand points out that though the refund applications were filed from the year 1976 onwards and even personal hearing was given in August 1980, the Assistant Collector did not bother to pass any order till the present petition was filed and specific directions were issued to pass the order. It is obvious that the refund applications were kept pending without any reason whatsoever and therefore we are inclined to direct payment of interest at the rate of 9% per annum on the amount cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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