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1992 (3) TMI 64 - SC - Central ExciseWhether the Government of India erred in holding that the duty paid on the electric motors was not deductible in computing the wholesale cash price under the provisions of Section 4 of the Act? Whether the Government of India erred in restoring the orders of the Assistant Collector whereby only 25 per cent discount was held to be deductible by way of trade discount in computing the wholesale cash price of the pumps in question? Held that:- There can be no doubt that the 'wholesale cash price' has to be ascertained only on the basis of transactions at arm's length. Once wholesale dealings at arm's length are established, the determination of the wholesale cash price for the purpose of Section 4(a) of the Act may not depend upon the number of such wholesale dealers. Before the Central Government it was emphasised by the appellant itself that the discrimination between the two patterns of sales was on account of the .fact that area distributors provided after sales service etc. which could be treated as post manufacturing operation. It is thus clear from the submission made by the appellant itself before the Central Government that the discount to area distributors was also in consideration for also providing after sales service which is not required to be taken into account while dealing with trade discount within the meaning of explanation to Section 4(a) of the Act. Therefore the Central Government rightly did not take into account such area distributors who may have to provide after sales service. The trade discount given to such wholesalers who were under no obligation to provide after sales service is the relevant trade discount given to the wholesalers. In view of our conclusion on the first point itself no useful purpose would be served in examining the second question as the appellant himself had given the reasons before the Central Government as to why they gave higher trade discount to their depots and other area distributors. Appeal dismissed.
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