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TMI Blog2002 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... . The mere fact that sale is also made to the Defence or to the Civil Department of the Government at different prices would not mean that the price becomes an unascertainable price. In the case of the appellants, a price is ascertainable. They admittedly sell in the market at a particular price. Section 4(1)(b) would not come into play and would not apply at all. Section 4(1)(b) of the Act would only apply if the price cannot be ascertained. In this case, as indicated above, the price is ascertainable and, therefore, the question of application of Section 4(1)(b) does not arise. If Section 4(1)(b) does not apply, Rule 6 will also not apply. Against assessee. - 4995 of 1995 - - - Dated:- 13-11-2002 - S.N. Variava and B.N. Agarwal, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Valuation of excisable goods for purposes of charging of duty of excise. — (1) Where under this act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be ---- the(a) normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale : Provided that--- (i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(4)(e)-- "wholesale trade" means sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase their requirements otherwise than in retail." 6.Thus it is clear that Section 4(1)(b) will only apply if normal price is not ascertainable. In cases where price is not ascertainable, the valuation must be made on the basis of Rules 3 to 6 of the Central Excise (Valuation) Rules, 1975. 7.Mr. V. Sridharan, learned Counsel appearing for the appellants, submitted that the decisions of the authorities cannot be sustained. He submitted that the price in respect of the components, transferred to the units at Hosur, Alwar and Bhandara, cannot be ascertained at all. He submitted that Section 4(1)(a) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that a price has to be determined under Section 4(1)(b) of the Act read with Rule 6(b)(ii). He submitted that the value has to determined on the basis of the cost of production or manufacture including profits, if any, that the assessee would normally have earned on such sale. 8.Mr. Sridharan further submits that no other construction can be placed as, in the automobile industry, there is in existence a two-tier price structure wherein normally components or parts are sold to the original equipment manufacturer at one price and sold in the market to the consumer at a different price. He points out that the fact that there is a two-tier system in the automobile industry has been accepted by the Collector. 9.Mr. Sridharan seeks su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es." 10.In our view, the provisions of the Act are very clear. Excise duty is payable on removal of goods. As there may be no sale at the time of removal, Section 4 of the Act lays down how the value has to be determined for the purposes of charging of excise duty. The main provision is Section 4(1)(a) which provides that the value would be the normal price thereof, that is, the price at which the goods are ordinarily sold by the assessee to a buyer in the course of a wholesale trade. Section 4(4)(e) clarifies that a sale to a dealer would be deemed to be wholesale trade. Therefore, the normal price would be the price at which the goods are sold in the market in the wholesale trade. Generally speaking, the normal price is the one at which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also not apply. 11.In our view, if the decision of the Tribunal, relied upon by Mr. Sridharan, lays down what it purports to lay down, then it must be stated that the reasoning cannot be sustained at all and it would not be a good law. However, it is pointed out to us that in that case the facts were different. It is submitted that what was supplied to various units were incomplete engines whereas what was sold in the market were complete engines. We do not express any opinion as to whether on those facts a different view can be taken. 12.Another reason why the arguments of Mr. Sridharan cannot be accepted is that if such an argument is to be accepted, then in every case, in order to get out of an ascertainable value, a person who capt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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