1985 (2) TMI 42 - SUPREME COURT

Whether the dealers are related persons ?

Whether the commission of ₹ 110/-, ₹ 145/- and ₹ 145/- allowed in respect of different varieties of mopeds to the dealers could be regarded as a trade discount or not?

Held that:- The dealers were wholesale buyers of the mopeds manufactured by the appellants and since the transactions between them were on principal to principal basis, it is difficult to appreciate how the appellants' could possibly be said to have any interest, direct or indirect, in the business of the dealers. The dealers could not, therefore, be said to be related persons vis-a-vis the appellants.

The relationship between the appellants and the dealers was clearly on principal to principal basis and in the circumstances it is difficult to see how the amount of ₹ 110/-, 145/- and 165/- allowed to the dealers in respect of different varieties of mopeds could be regarded as anything other than trade discount. The appellants charged to the dealers the price of the mopeds sold to them less the amount of ₹ 110/-, ₹ 145/- and ₹ 165/-in respect of different varieties of mopeds. These amounts allowed to the dealers were clearly trade discount liable to be deducted from the price charged to the dealers for the purpose of arriving at the excisable value of the mopeds. Appeal allowed of assessee.