TMI Blog2003 (12) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... nealed atomised powder that it manufactured on the basis of cost of production including sales and administrative cost and interest on bank outstanding and 13% of the amount as profit. This arrangement was entered into by an oral agreement with MSPL which was reduced to writing in September, 1995. The agreement contained the following provisions. The appellant agreed to supply annealed powder to MSPL for 10 years at a commercially competitive price. The preamble to the agreement provided that MSPL would not undertake the manufacture of annealed powder during the subsistence of the agreement. Clause 4 of the agreement provided that the price would be based on the formula referred to earlier (cost of production plus 13% profit). Clause 9 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been its largest buyer. It had, during the period from 1997 to 2002 purchased every year an average of 62% of the annealed powder manufactured by it. The purchase by it has not fallen below 57% in any year. Its next largest customer purchased about 10%. The quantity specified in clause (3) of the agreement had also been purchased each year by MSPL. The departmental representative contends that the undertaking by MSPL not to produce any annealed powder in 10 years gives a clear advantage to the appellant assuring it of a large segment of the market and the reduction in price clearly compensation for MSPL for this consideration. 5. It could be argued that the acceptable by MSPL not to undertake for ten years manufacture of the product in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to MSPL the goods at the lower price in after 2002, when the agreement elapsed, also is a significant pointer in this regard. 6. It was contended before the Commissioner, that the appellant had enclosed a copy of the agreement with MSPL as an enclosure to its letter dated 20-2-1996 and indicated in that letter that since MSPL buys about 50% of the quantity, 5% of the discount was provided to it and therefore the extended period of limitation would not be available. The Commissioner has not dealt with the submission that the agreement was enclosed to the letter and noted that what was described in the letter was a quantity discount. He has further said that declaration filed by the appellant under Rule 173C did not indicate any reduced p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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