TMI Blog1976 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... tured by the appellants in the above period was paid under protest on the basis of prices declared in various price lists and which were provisionally approved by the officer concerned. The grounds for claiming the refund were that the provisional values approved by the Supdt. were higher than the gross selling price of their fans and included cash discount, quantity discount, Incentive Bonus Discount, Freight Charges, Packing Charges, Distributors Commission, and other post manufacturing and selling expenses and also the value of Speed Control Regulator, which is claimed by the appellants as a non-excisable item. The appellants claim that duty was leviable on the value arrived at after excluding the above mentioned items from the gross sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the factory. 2. After making their written submissions the appellants also argued their case in a personal hearing before me on 20-7-1976 through their advocate Shri P.B. Kapoor and Shri H.P. Choudhary, Factory Manager. Besides pleading that before issuing his order the Assistant Collector did not afford any opportunity to the appellants to make representations and submissions and did not afford any opportunities of personal hearing, the appellants have contended that the value of their goods should have been determined on the basis of the wholesale cash price at the time and place of removal i.e. at the gate of the factory of the appellant, the wholesale cash price within the meaning of section 4 of the Central Excises and Salt A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er deducting the cash discount allowed by the appellants through its Chief Distributors to various Dealers and Retailers for prompt payment and after deducting the quantity discount and the incentive bonus discount allowed and/or passed on by the appellants to various dealers etc. as the said discount are customary trade discounts and are passed on in accordance with the normal marketing procedure of the appellant. According to the appellants excise duty is not payable on freight paid for transporting the goods of the appellants from their factory to the various selling points. Deductions have also been claimed on account of cost of packing which is incurred by the appellants only after the goods have been manufactured. Selling over heads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s packing, forwarding and freight charges also. In other words it means that except for the price of the Fan Regulator, a sum of ₹ 25/- represents all the deductions claimed by the appellants i.e. the total deduction claimed is ₹ 25/- plus the price of the Regulator. 3. I have gone through the above submissions and observe that according to their marketing system the appellants do not sell any electric fan at the factory gate. Therefore there is no wholesale cash market in respect of their goods at the factory gate. They have appointed a number of Chief Distributors for the purpose of selling their goods on wholesale basis. These Distributors have been given area-wise distribution and the appellants have entered into agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd. Vs. Union of India and others. The above position is that the value of the goods for the purposes of excise should take into account only the manufacturing cost and the manufacturing profits and it must not be loaded with post manufacturing cost and manufacturing profits arising out from post manufacturing expenses. The price charged by manufacturer for the sale of the goods in wholesale market would therefore represent the real value of the goods for the purposes of assessment of excise duty. Further the wholesale cash price which the manufacturer receives from the sale to the wholesale dealer i.e., when the goods first enter the stream of trade and are their onward way to the consumer would be the relevant price for assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rganisations is distinct from the manufacturing unit profit, should also be excluded. The following deductions claimed by the appellants can be considered as referrable to the Sales Organisations :- 1. Godown Rent. 2. Insurance Charges on goods in transit to Sales Depots as well as those incurred on stocks in Distributors premises. 3. Administrative expenses subsequent to process of manufacture like Distribution Expenses pertaining to salaries and emoluments of the portion of the staff which is wholly engaged in the Distributors premises. 4. Expenses on advertisement wholly attributable to Sales Organisations. Advertisement charges attributable to manufacturing expenses will not deductable from the whole cash price. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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