TMI Blog1999 (4) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... advantage of lower electricity tariff, reduced sales tax, octroi, interest charges etc. Although the contract price was not doubted by the Assistant Commissioner, yet vide his Order, he did not accord his approval of price-lists at the lower rate on the ground that the Contact originally entered into by the respondents, with their buyers, did not stipulate any variation in the prices. As such, he rejected the respondents claim for approval of the price-lists at the lower rate. 2. On an appeal filed against the above order, the Commissioner(Appeals) observed and held as under:- I have carefully gone through the record of the case as well as the appeal petition and submissions made at the time of personal hearing. I find that the Asstt. Collector has erred in holding that when the earlier price list was approved for a specified quantity that price cannot be reduced before completing the supply. The very argument seems to be absurd to me because there was no such clause in the purchase orders that the price quoted in the order would remain firm till the completion of the supply of the quantity ordered. In business parlance price factor is dependent on demand and supply. I, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue involved in the instant case, nevertheless, the same can be applied to the facts of the present appeal inasmuch as it is not the case of the Revenue that the goods have not been sold at the reduced price. We find sufficient force in the findings of the Commissioner (Appeals) that in the absence of any clause in the contract that the price quoted in the Order would remain firm till the completion of the supply of the quantity of the Order and accordingly, the reduction in prices for bona fide business reasons was justifiable. As such, we do not find any merits in the appeal filed by the Department and reject the same. Sd/- (Archana Wadhwa) Member (Technical) 7. [Order per : P.C. Jain, Member (T)]. - I have gone through the order proposed by my ld. Sister Mrs. Archana Wadhwa, Judicial Member. However, I would like to record a separate Order. 8. Facts of the case and the issue involved in this matter have already been set out by the ld. Sister in her proposed order. 9. Contract entered into between the respondents herein and their customer stipulated a certain price for certain quantity of goods to be supplied during a certain period. It is also a fact on record, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finite supply when the respondents themselves were prepared to perform their part of contract. There is no averment from the respondents to the affect that they could not so sue their customers. 15. It is true that Section 4 does not fix the wholesale price of the goods. Fixing of selling price in wholesale trade is the prerogative of the manufacturer. But value of excisable goods for purposes of assessment to duty is to be determined in terms of Section 4 ibid. Section 4 does not say that wholesale price charged by the manufacturer will invariably be the value. It shall be the value under Section 4 ibid, if and only if it satisfies all the ingredients mentioned in Section 4 (1) (a). 16. I have already held that reduced price to keep up the business relationship (for future sales) with a long-standing customer fails to satisfy one of the ingredients of Section 4(1)(a) i.e price is the sole consideration for sale . Hence the said reduced price cannot be accepted as value under Section 4(1)(a). In view of the foregoing discussion, I set aside the impugned order and allow the appeal of Revenue. Sd/- (P.C. Jain) Member (Technical) Point of Difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchase Order the price quoted were not the firm prices, the parties could reduce the agreed prices. He remanded the matter to the jurisdictional Commissioner of Central Excise for approval of the price lists as submitted. The Revenue came up in appeal and the ld. Member (Judicial) proposed that in the absence of any clause in the contract that the price quoted in that Order would remain firm till the completion of the supply of the quantity of the Order, the reduction in prices was justifiable. The ld. SDR submitted that the prices were firm, as the approval had been given of the declared contract prices. He further submitted that the very sanctity of the contract for which special provisions have been made in Section 4 of the Act would be lost if after a part of the contract is fulfilled the prices are sought to be changed thereafter. He referred to the Calcutta High Court s decision in the case of Union Carbide (I) Ltd. v. Assistant Collector of Central Excise-1986 (23) E.L.T. 429 (Cal) = 1984 ECR 135 (Cal), wherein it had been held that the price lists once approved are final. It has been observed therein that Rule 173C of the Rules upon a proper construction is intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were finally approved and the clearances of the excisable goods in terms of the approved price lists were also effected although full supplies were not made. After the contract has thus been acted upon the respondents filed fresh price lists in Part-II proforma in respect of the same contract revising downward the contract prices. 23. Under Section 4 of the Central Excise Act, 1944 the prices which had to form the basis of assessment are the normal price i.e. 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 same. For this general principle certain exceptions had been provided in the proviso to Section 4(1)(a) of the Act. Under Section 4(1)(a) where in accordance with the normal practice of the wholesale trade in the excisable goods, excisable goods are sold by the assessee at different prices to different classes of buyers (not being related persons), each such price shall subject to other given circumstances be deemed to be the normal price of such goods in relation to each such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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