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TMI Blog1999 (9) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the true scope and ambit of Section 4 of the Act. In order to have a closer scrutiny of those decisions and the scope and effect of Section 4 of the Act, these appeals were placed before a larger Bench of three Members. This is how they came before us. Arguments advanced by learned Departmental Representative and learned Counsel were heard in detail. We are disposing of the appeals. 3.For a proper understanding of the actual issue raised, it is necessary to refer to the facts. Since facts in these appeals are almost similar, except in the case of Taparia Tools which will be referred to hereinbelow we consider it advantageous to state the facts in one case viz. Appeal No. E/907/97-A, Collector of Central Excise, Chandigarh v. M/s. Royal Biscuits Pvt. Ltd. Respondents are engaged in the manufacture of Biscuits assessable to duty under Chapter Heading 1905.11 of the Schedule to Central Excise Tariff Act, 1985. Manufacturer filed price lists in Part I for sale of their produce to independent buyers through their sales depot located in various States. In those lists different prices were shown by allowing different trade discounts for wholesales to dealers from different regio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers merely because they are situated in different States in India and regional discounts are not permissible to be deducted from normal ex-factory price to arrive at the assessable value for levying Central Excise duty. 5.Section 4 of the Act provides for the assessment of the value of excisable goods for the purpose of charging excise duty. It states that where duty of excise is chargeable on any excisable goods with reference to value, such value shall be deemed to be the normal 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. The buyer should not be a related person and price should be the sole consideration for the sale. Place of removal has been defined to mean a factory or any other place or premises of production or manufacture of excisable goods or a warehouse or any other place where excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed. Prior to the amendment of 1996 a depot was not a place of removal. So removal of goods to depot entails payment of duty. Duty has to be calculated at the point of time of remov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are to be included in the assessable value irrespective of who has paid for the same but the loading expenses incurred outside the factory gate are excludible. Duty of excise is a tax on the manufacture, not a tax on the profits made by a dealer on transportation." 7.The question whether different classes of buyers can have different prices was not an issue in that case. As per that decision, if ex-factory prices were not ascertainable and goods were to be assessable ex-depot, then it would be for the manufacturer to claim, on the basis of actual evidence, deductions admissible from the price list. It was decided therein that where ex-factory price is ascertainable that price should be the basis upon which value of the goods should be determined for assessment. This decision, according to us, is not an authority for the proposition that ex-factory price to a particular class of buyers can be the basis for forming the value for assessment in respect of sales to different classes of buyers. 8.In Metal Box India Ltd. v. Collector of Central Excise, Madras, 1995 (75) E.L.T. 449 their Lordships approved the following observations made by the Gujarat High Court in Gujarat State Fertili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Section 4(l)(a) the Govt. would be a class by itself and the price charged to it would be relevant only to the goods sold to it. So far as depot sales are concerned, they are to a different class or classes of buyers and in respect of the goods sold to them, the price charged to each of such class of buyers would be the normal price. The price charged to one class of buyers cannot, therefore, be directed to be adopted as the price in respect of all the classes of buyers." 11.In this view, their Lordships held that where goods are sold in the course of wholesale trade at place or places outside the place of removal the expenses incurred for transportation of the goods together with cost of insurance on freight can be deducted. This decision is authority for the proposition that there can be different classes of wholesale buyers and the ex-factory sale price to one class cannot be taken as the price in respect of goods sold to another class of buyer. 12.It is settled law that duty has to be calculated at the point of time of the removal of the goods. At that point of time duty can be levied by calculating the value on the basis of sale to independent wholesale dealers. Price re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale at factory gate is to one class of such buyers and sale from depot, to which stock has been transferred, takes place to other class of buyers, ex-factory price charged cannot be relevant normal price for assessing duty on those goods. Question whether a wholesale buyer or dealer is a separate class or not is a question of fact and it has to be decided on an appreciation of the entire evidence made available by the manufacturer. Prior to the amendment of the Act, Depot cannot be treated as an extended arm of the factory or an extension of the factory where manufacturing process is undertaken. 15.In all the appeals before us the stand taken by the Department, appellant, is that wholesale dealers in India cannot be considered as belonging to different classes on the ground that they are located in different parts of the country and that when factory gate sales to independent buyers are available the same value should be applicable for all clearances. These arguments cannot stand in view of the conclusions reached by us earlier in this judgment. Consequently, the appeals have to fail. 16.In view of what has been stated, we find no reason to interfere with the orders passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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