9911796707
TMI Blog1990 (1) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... n the tractors, the petitioner entered into an agreement with respondent No. 4, Escorts Ltd., for the sale, promotion, distribution and servicing of the tractors manufactured by the petitioner This agreement was executed in the ordinary course of business and was based on purely commercial consideration. The excise duty was levied on the tractors at 10 per cent ad valorem from 29th May, 1971. Immediately thereafter, the petitioners approached the Superintendent of Central Excise S.R.P II, Faridabad, for the determination of the assessable value of the Ford SKD tractors which was fixed at Rs. 24,795.30 per unit. This value was based on ex-works price of Rs. 26,544.30 per unit as fixed by the Ministry of Food and Agriculture and Community Development and Cooperatives, Department of Agriculture vide their letter dated April 30, 1971, less uniform trade discount given on all tractors at the rate of Rs. 1,750/- per unit. As per the averment out of the said discount, a sum of Rs. 1,000/- was paid by respondent No. 4 to the dealers and a sum of Rs. 750/- only per unit was retained by it solely to meet the expense for sale, distribution, advertising and servicing of the tractors. 3. The S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t post-manufacturing and selling cost incurred by the said respondent. The mere fact that there is no sale of tractors at the factory gate of the petitioner to parties other than respondent No. 4 will not make the trade discount retained by respondent No. 4 a non- deductible in determining the assessable value, particularly, when the transaction between the petitioner and respondent No. 4 are at arm's length, and respondent No. 4 has not been a favoured buyer. The revisional authority under the circumstances has erred in overlooking and ignoring the settled legal proposition that the transaction does not cease to be a wholesale transaction merely because the petitioner has entered into an agreement with respondent No. 4 under which certain commercial benefits are conferred on the said respondent in consideration of certain services to be rendered by it. 6. As against this, the contention of the learned counsel for the respondent is that respondent No. 4, the distributor company had 45% participation having four common Directors in the petitioner firm. Both these companies had and are thus covered under the expression "related persons". The mutual interest was that M/s. Escorts Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c Industries Ltd., since it held 50 per cent of the share capital of that assessee and had interest as shareholder in the business carried on by the assessee. But even then the Court held that it could not be said that assessee, a limited company had any interest, direct or indirect, in the business carried on by one of its shareholders, namely, Atul Products Ltd. even though the shareholding of such shareholders might be 50 per cent. Secondly, it was noted that even though Atul Products Ltd. was a wholesale buyer of the dyes manufactured by the assessee but since the transactions between them were as principal to principal, it was difficult to appreciate how the assessee could be said by virtue of that circumstance to have any interest, direct or indirect, in the business of Atul Products Ltd. The assessee, it was observed, was not concerned whether Atul Products Ltd. sold such dyes at a profit or at a loss. In those circumstances, the first part of the definition of related persons in clause (c) of sub-section (4) of Section 4 of the Amended Act was, therefore, clearly not satisfied both in relation to Crescent Dyes and Chemicals Ltd., a subsidiary company of Atic Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de mark affixed to them, are sold by the respondent to Nestle, as stipulated under the agreement, would be the value of the goods for the purposes of excise duty i.e. the price at which the respondent sells the goods to Nestle in the course of wholesale trade and we fail to see how the value of the trade mark should be added to the wholesale price for the purpose of determining the value of the goods for the purpose of levy of excise duty. 12. In our recent judgment in United Copiex (I) Ltd. and Another v. Union of India and Others, (C.W. 411/83) decided on December 11, 1989 - 1990 (47) E.L.T. 297 (Del.), we have, on similar facts held :- "The close reading of the impugned order would show that the Assistant Collector has ignored the fact that the buyer makes a wholesale trade of the flaps to the seller and after adding 12% handling charges, the seller makes a further sale. The petitioners have specifically averred that the raw material is sold to them by the seller and they have also attached the receipt showing the separate .payments made for such sale of raw material. There is nothing to show that the buyer manufactures the flaps on behalf of the seller as has been held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
