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2005 (11) TMI 71 - SC - Central ExciseWhether Section 4(1)(a) of the Act had to be applied or Section 4(1)(b) of Valuation Rules? Held that:- The respondent No. 1 assessee had submitted before the Department and before us that if the assessee was not permitted to rely upon the formula laid down in M/s. Ujagar Prints III [1989 (1) TMI 124 - SUPREME COURT OF INDIA] then it was entitled to discounts and advertisement expenses. These were not allowed by the Commissioner. As the question whether the respondent No. 1 would be entitled to discounts and deductions claimed would only arise if it held that the ratio of M/s. Ujagar Prints III would not apply, the Tribunal did not address this aspect of the matter at all nor did it consider whether the merchant-manufacturers and the respondent No. 1 were related persons. Since the Tribunal, in our opinion, wrongly upheld the respondent's contention that the formula in M/s. Ujagar Prints III would apply in full measure, it is now necessary for the Tribunal to consider whether the respondents were related persons and whether the respondent No. 1 would be entitled to claim discounts or could exclude the advertisement expenses incurred by the dealers. We therefore allow the appeals and remand the matter back to the Tribunal for the purpose of determining the nature of the alleged relationship between the respondent No. 1 and the other respondents. If it is found that the respondents are not related persons then the earlier decision of the Tribunal will stand. If on the other hand it is found that the respondents are related, the Tribunal will consider the questions of discounts and deductions claimed by the respondents before remanding the matter to the Commissioner for a correct computation of the calculation errors.
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