TMI Blog1975 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Limited, Firestone Tyre and Rubber Co. of India (Pvt.) Ltd.. Ceat Tyre of India Ltd., Madras, Rubber Factory, Inchek Tyres Ltd., Premier Tyres Ltd., Goodyear India Ltd. and Bata Shoe Co. Ltd. the remaining quantity is sold through a network of Stockists located in various parts of lndia having dealings with rubber goods manufacturers operating in smaller scale. The petitioner has no sole selling agent for the said Chemicals. The petitioner has, however, appointed three stockists in Bombay region and two each in Delhi, Calcutta and Madras regions. The petitioner has also regional selling offices at Bombay, Delhi, Calcutta and Madras. The petitioner maintains all India selling prices on a uniform scale being the petitioner's list prices in respect of the said chemicals. All sales made by the petitioner are at the list prices. The stockists, however, are allowed 21/2% commission and/or discount on the said prices. The cost of packing/freight/ handling/service charges etc. up to the point of sales from the four regional selling offices are included in the selling prices. By virtue of the Finance Act. 1973, the said chemicals, namely, accelerators and antioxidants became excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le value has been computed in rupees after deducting from A both the figures mentioned at B and C. The petitioner has also indicated what according to the petitioner was the details of the post manufacturing expenses leased on 1971 and 1972 actuals. In the analysis of the said details, the petitioner has mentioned the expenses on account of realisation, packing material, technical fee, freight, distribution and selling profit. The petitioner has also indicated the percentage of post manufacturing expenses to realisation which the petitioner has computed at 13.87 and the percentage of selling profit to realisation, which the petitioner has computed at 6.8% 4. There was a requisition by the respondent No. 4 and pursuant to the requisition contained in the letter dated 9th April, 1973, the representative of the petitioner appeared on the 3rd May, 1973 and discussed the matter with the petitioner. Thereafter, certain documents were required by the Assistant Collector of Central Excise and in compliance thereof, the petitioner by its letter dated the 22nd July, 1974 submitted to the said Assistant Collector a copy of the balance sheet for the year ending 30th September, 1973 and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed price but duty is being paid by them on the assessable value ascertained after deduction of post manufacturing expenses and selling profit from their listed price. Balance sheet shows that expenditure due to commission on sales which is a conclusive evidence that no discount is paid by the company to any one and the sales are therefore sold through appointed agents only. ORDER After careful study of the marketing organisation and pattern of sale, I hold that the assessable value will be under section 4(b) of Central Excise and Salt Act, 1944. Listed price without any deduction whatsoever should be the assessable value. Freight and packing charges and service charges of billed by assessee should also be loaded to the assessable value." 5. Thereafter demands were raised on the basis of the said order. It is this order which is Annexure 'D' to the petition which is the subject matter of challenge in this application under Art. 226 of the Constitution. 6. The question is, therefore, whether the said order determining the assessable value of the said Chemicals under the Central Excises and Salt Act, 1944 is legal and valid. In order to appreciate this question it would be nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or could be sold, that would not in any way affect the existence of any market in the proper sense of the term provided the articles themselves could be sold wholesale to traders, even though the articles were sold to them on the basis of agreements which conferred certain extra commercial advantages upon them. The Supreme Court, further, observed that Section 4 of the Act provided that the real value should be found out after deducting the selling cost and selling profit and the real value can include only the manufacturing cost and manufacturing profit. The Supreme Court, further observed that the section postulated that the wholesale price should be taken on the basis of cash payment thus eliminating the interest involved in wholesale price which gave credit to the wholesale buyer for a period of time and the price had to be fixed for delivery at the factory gate thereby eliminating freight, octroi and other charges involved in the transport of the articles. 9. In the case of Attic Industries v. Assistant Collector of Central Excise- AIR 1975 S.C. 960 = 1978 E.L.T. (J 444), the Supreme Court again reiterated that the value of the goods for the purpose of excise must take int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e such wholesale cash price is not ascertainable then the value of the article would be the price to be computed in the manner indicated in clause (b) of Section 4 of the Act. Clause (a) of Section 4 speaks or (i) which is (a) wholesale i.e. in contradistinction to retail price, and (b) cash i.e. free from any augmentation for credit or other advantages allowed to a buyer, it is to be a price "less trade discount it is a price conservative in every aspect and free in particular from any loading for any post manufacture and post production charge (c) if there is an actual price for the goods themselves at the time and place of sale and if that is a "wholesale cash price" the clause (a) of Section 4 would not be inapplicable for want of sale of other goods of like kind and quality. If the manufacturer enters into agreements with dealers for wholesale sales of articles manufactured on certain terms and conditions it would not follow from that along that price for those sales would not be "wholesale cash price" for the purpose of Section 4(a) of the Act if the agreements were made at arms length in usual cause of business (d) once wholesale dealing at arms length are established the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The overriding control of the assessee even for subsequent dealings of the commodities in question. (3) The assessee has equalised price throughout India. (4) The assessee has no separate profit and loss account. (5) The assessee was given a chance to establish the contention for claiming the deduction of post manufacturing expenses and selling profit but the assessee failed to do so. (6) The assessee is collecting the excise duty from its customers. 12. The question, is whether these are factors relevant for the germane to the determination of the question whether clause (a) of Sec. 4, would be applicable or in other words whether the wholesale cash price is ascertainable or not. The main factor seems to be the difficulty which officer has felt in ascertaining the wholesale cash price and what would be the manufacturing profit and the manufacturing expenses. It is true that this is not a case of deduction but it is a case of computation of the assessable value of the goods. It is also true that irrespective of the help or lack of help from the assessee the assessing authority has to compute the assessable value of the goods to the best of his judgment on the materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges would be the assessable value, the Assistant Collector is clearly in error and in violation of the ratio of the aforesaid Supreme Court decisions. 14. Two other aspects were argued in this matter. One was that there was an alternative remedy provided under the Act by Section 35 whereunder appeals were provided from this order. It was submitted that the petitioner had not resorted to the alternative remedy and as such, the petitioner was not entitled to any relief under Art. 226 of the Constitution. The existence of an alternative remedy is not a bar to the granting of the relief under Art. 226 of Constitution but only a factor to be taken into consideration in exercising the discretion of the court. In this case where this is an error of law and where the court has entertained this application and issued a rule nisi, in my opinion, it would be inappropriate at this stage to exercise my discretion not to grant the reliefs to the petitioner on the plea of alternative remedy. 15. It was, then, contended that the petitioner had realised excise duty from its customers. Therefore, the petitioner was not entitled to any relief in this application. It was contended that on the theo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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