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TMI Blog1974 (5) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies sell these goods. The Petitioner Co. sells the goods manufactured by it to the customer Companies at its ex-factory price. The petitioner company pays Sales Tax on these sales. The price charged by the petitioner company includes manufacturing cost and manufacturers' profit. The petitioner Co. pays Income Tax on its profits from these sales. 2. In their turn, the customer companies sell the bulbs, tubes etc. to the public at rates higher than those charged by the petitioner company. The customer companies include their selling cost and selling profits. 3. In 1955 excise duty was for the first time imposed on the bulbs and tubes manufactured by the petitioner company. The duty was levied and collected on Specific basis. With effect from 1st March, 1969, the basis of the Excise Duty, was changed to ad valorem. This change was made in respect of electric bulb and fluorescent tubes only. The duty on miniature lamps continued to be levied on "Specific basis". 4. Soon after this change the Excise Department asked the petitioner company to supply it the catalogue of its selling price. The petitioner company complied with it. On 4th June, 1969, the Superintendent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company went up in Appeal against this order as well. 8. The appeal directed against the order dated 16th July, 1970 was decided by the Appellate Collector on 22nd March, 1973. He held that in view of the agreement the petitioner company cannot sell its product to any party other than the customer companies, that they were only manufacturing goods on account of the customer companies, that no evidence had been brought forth to the effect that the agreement for marketing their products for the above parties had been entered into at arms length and in the ordinary course of business and that the petitioner's prices were according to the voltage of the product and not according to the different brand names under which they are ultimately sold. It was held that the petitioner Company had declared that the prices indicated at which the six parties mentioned above (Namely the customer companies) market the goods and as such the determination of the value for the purposes of duty under Section 4 of the Central Excises & Salt Act has to be based on the wholesale cash price at which the products are sold by the above six parties. On these findings the Appeal was dismissed. 9. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le-sale to traders, even though the articles are sold to them on the basis of an agreement which conferred certain commercial advantages upon them, it cannot be said that there is no whole-sale market. So long as the sales are not to retailers they will be whole-sale sales. The fact that no other person could purchase the articles whole-sale from the manufacturing company did not detract from the sales being whole-sale. If there is an actual price for the goods themselves at the time and place of sale, and if that is a whole-sale cash price, Clause (a) of Section 4 would be applicable. 14. After referring to certain High Court decisions, the Supreme Court held that the price of sales to whole-sale dealers would represent the whole-sale cash price for the purpose of Section 4 (a) of the Act even though the manufacturer were to enter into agreements with dealers for whole-sale sales of the articles manufactured on certain terms and conditions, it would not follow from that alone that the price for those sales would not be the "whole sale cash price" for the purposes of Section 4 (a) of the Act if the Agreements were made at terms length and in the usual course of business. 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears to be that the petitioner is company under the complete control of the customer companies. Assuming that it is the true and correct legal position, then the petitioner could not be called upon to pay excise duty as the manufacturer. The several customer companies would then be manufacturers and they alone would, then be the manufacturer and they alone would, in Law, be liable to pay Excise duty. The fact that the Department is treating the petitioner company as the manufacturer and making it liable for excise duty precludes it from taking the plea that the petitioner is a dummy company or a benamidar for the customer companies. It may be borne in mind that the customer companies are not share-holders of the petitioner company : they are alleged to be subsidiaries of the share-holder companies. 19. The Appellate Collector also found that the petitioner had brought forth no evidence to show that the agreements for marketing their products with the customer companies were entered into at arms length and in the ordinary course of business. This finding appears to have been recorded to distinguish the Supreme Court decision in A. K. Roy's case (Supra). The Appellate Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny evidently is "whole-sale cash price" within the meaning of Section 4(a) of the Central Excise Act. The view of the Department as well as the appellate orders cannot be sustained. 21. The Superintendent, Central Excise, passed an order dated 16th August, 1969. This order was appealable, but the petitioner company did not go up in Appeal. It did not even come to this Court under Article 226 of the Constitution within a reasonable time. The present petition which was instituted on 5th April, 1973, was much beyond the usually prescribed period of ninety days. In the Writ Petition there is no explanation why this order was not challenged within the usually prescribed period of time. The Petitioner company seems to have acquiesced in that order, Hence it is not entitled to any relief in respect of this order. 22. In the result the Writ Petition succeeds and is allowed with costs. The orders passed by the Supdt., Central Excise, on 16th July, 1970, and 4th December, 1971, are quashed and so are the appellate orders dated 22nd March, 1973, and 24th May, 1973. We need not set aside the order dated 27th October, 1972, passed by the Superintendent Central Excise, because that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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