TMI Blog1979 (8) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to pay to the petitioners an amount of Rs. 10.50 per hundred blades inclusive of cost of packaging and transportation to the destinations mentioned by the Company. 2. It is required to be stated that under Section 6 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the "Act"), no person is permitted to engage in the production or manufacture of excisable goods except under the authority of a licence granted under the Act. Under the provisions of the said Act, the petitioners submitted the price-list to the respondents on July 23, 1970 and in the said price-list, the value of the blades manufactured and supplied by them under the agreements was shown. The price list was approved by the appropriate authorities and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of the blades, it cannot be held that the sales are independent, in normal course of business or at an arms length. The orders passed by the two authorities are under challenge in this petition filed under Article 226 of the Constitution of India. 4. Mr. Taraporewala, the learned Counsel appearing in support of the petition, contended that the agreement between the petitioners and the Company was an ordinary commercial transaction entered into at arm's length and was similar to agreements entered into by the petitioners with other customers. The learned Counsel submitted that the price recovered from the Company was not a specially low price and the finding of the authorities below that the petitioners were only manufacturing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, Mr. Taraporewala rightly submitted that the show cause notice issued by the respondents nowhere indicates that the agreement between the parties was not genuine or there was certain material in the custody of the respondents to hold that the petitioners were merely agents of the Union Carbide. The show cause notice merely indicates that there is a variation between the price at which the petitioners sold the blades to the Union Carbide and the sales effected by the Company in open market. The orders of the two authorities do not carry the case any further and the Superintendent of the Central Excise has merely relied upon the letter dated July 23, 1970 to hold that the petitioners were mere agents of the Company. 6. Mr. Dalal, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company. It is well-known that the products are sold by the Company at a higher rate because of the reputation of their brand and that would not necessarily reflect the true value of the articles. In Voltas case, the Supreme Court observed:- "If a manufacturer were to enter into agreements with dealers for wholesale 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 'wholesale cash prices for the purpose of Section 4(a) of the Act if the agreements were made at arm's length and in the usual course of business." The agreement in the present case clearly establishes that it is at arm's length and is entered into in the usual course of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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