TMI Blog1988 (3) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... determination of "value" for the purpose of excise duty. Tribunal's upholding the order of the Appellate Collector, was right and correct. - 1938-39 of 1987 - - - Dated:- 28-3-1988 - Sabyasachi Mukharji and S. Ranganathan, JJ. [Judgment per : Sabyasachi Mukharji, J.]. - These are appeals under Section 35L(b) of the Central Excises and Salt Act, 1944 (hereinafter called 'the Act'). The respondents - T.I. Millers Ltd. and T.I. Diamond Chain manufacture cycle lamps and automative chains. Both these goods are assessable under Item 68 of the Central Excise Tariff. The said respondent filed price lists for the sale of the goods through their distributors, namely, M/s. T.I. and M-Sales Ltd., M/s. Charmvel Agencies and M/s. Ambadi Enterprises Pvt. Ltd. quoting their price to the distributor as assessable value. However, subsequently following the decision of the Madras High Court in a valuation case, the respondents required that the price charged by them from buyers at the factory gate should be accepted as the assessable value and not the price to the distributors. The question is whether the price charged by the respondents from buyers at the factory gate should be accepted as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an interest, direct or indirect in the business of the person alleged to be a related person nor is it enough that the person alleged to be a related person has an interest, direct or indirect in the business of the assessee. To attract the applicability of the first part of the definition, it was observed, the assessee and the person alleged to be a related person must have interest, direct or indirect in the business of each other. Each of them must have a direct or indirect interest in the business of the other. The quality and degree of interest which each has in the business of the other may be different; the interest of one in the business of the other may be direct while the interest of the latter in the business of the former may be indirect. That would not make any difference so long as each has got some interest, direct or indirect in the business of the other. 4. In the notice issued by the Central Government seeking to review the Appellate Collector's order, the Central Government indicated that there was an agreement existing between the respondents and their distributors according to which they were the company's distributors for the sale of their goods. Major port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case is one where under the old Section 4(a) the value must be determined as the price at which the excisable article or an article of the like kind and quality is capable of being sold in wholesale trade at the time and place of removal. This Court analyses the position under the Central Excises and Salt Act, 1944 as amended by Act XXII of 1973 that if the price at which the excisable goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal as defined in sub-section (4)(b) of Section 4 is the basis for determination of excisable value provided, of course, the buyer is not a related person within the meaning of sub-section (4)(C) of Section 4 and the price is the sole consideration for the .sale, that would be the value. The proposition is subject to the terms of the three provisos to sub-section (1)(a) of Section 4. Where the wholesale price of any excisable goods for delivery at the place of removal is not known and the value thereof is determined with reference to the wholesale price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mark up included certain elements which have to be included in the assessable value. The Tribunal held that according to the judgment of this Court in Bombay Tyre International case (supra) where the sale is effected at the factory gate, expenses incurred on account of charges for services after delivery to the buyer, namely after sale service and marketing and selling organisation expenses, including advertisement expenses could not be deducted from the assessable value. It was further urged on behalf of the appellant that other features like division of territory amongst the distributors and the marginal quantity of direct sales otherwise, as well as the fact that the distributors did not deal in competitors' goods, clearly indicated that these are related persons. Learned counsel drew our attention to the meaning of the term 'ordinarily' given in K.G. Iyer's Judicial Dictionary at page 704 and explained that it meant 'habitually', or 'usually', or 'normally'. In this case, ordinarily sales are only through distributors and the sales are made by them on behalf of the manufacturer. Learned counsel pointed out that this was a case where it was an extension of the manufacturer's se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished in this case, such is not the position. It appears that the link between the respondents T.I. Miller Ltd. Company and T.I. M Sales Ltd., is the main distributors of M/s. Tube Investments of India Ltd., who are the holding company of the respondents. This relationship does not satisfy the criteria for establishing the related persons concept. These were limited companies at the material time, and it will be difficult to say that a limited company has any interest direct or indirect in the business carried on by one of its shareholders. 7. It has been explained that the mark up in the price was allowed in connection with the requirement to display the maximum sale price. The sales pattern shows also sales to other than distributors and it is not restricted only to the appointed distributors of T.I. India Limited. 8. In the premises the Tribunal's upholding the order of the Appellate Collector, was right and correct. In the background of the facts mentioned hereinbefore and in the light of the decisions of this Court in Bombay Tyre International and Atic Industries cases (supra), we are of the opinion that the Tribunal was right and there is no cause for interference ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
