TMI Blog1988 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... X' Division, issued a notice dated 29th October 1976 asking the petitioner to show cause why the petitioner should not be ordered to submit the price list in proforma Form IV. The petitioner sent a reply on 15th of December, 1976. Thereafter on 5th of April 1977 the Assistant Collector passed an order requiring the petitioner to submit the price list in proforma Part IV. This order was challenged by the petitioner in an appeal, which was allowed by the Appellate Collector of Central Excise on 19th of July, 1977 and the matter was remanded to the authority of first instance. By a fresh order dated 22nd December 1977, the Assistant Collector again asked the petitioner to file the price list in proforma Part IV and also to pay the differential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion,, "has challenged the two grounds on which basically the Appellate Collector has taken the view that the petitioner ought to submit the price list in proforma Part IV. One is the ground that nearly 80% of the sales of the petitioner company are to entities which are to be regarded as related persons and secondly that the wholesalers in the instant case are related persons though in fact they are separate legal entities. The provisions of Section 4 of the Central Excises and Salt Act, hereinafter referred to as "the said Act", as amended after 1975, are to be interpreted in order to examine the "validity of the order of the Appellate Collector as well as the validity of the contentions raised on behalf of the petitioner. Under Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent parts thereof. It had sales office" at different places from where it effected sales to consumers at list prices and the sales so effected came to about 90 to 95 per cent of its production. Apart from these sales, it also sold articles to wholesale dealers from different parts of the country in pursuance of agreement entered into with them. The agreement with the wholesale dealers provide(d) among other things, that they should not sell the articles sold to them except in accordance with the list prices fixed by the respondent. The question that was canvassed before the Court was whether the respondent was liable to be charged with excise duty on the basis of the price of retail sales made by it directly to the consumers from its head o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chunilal. It was contended on behalf of the department that the value of the excisable goods for the purpose of levy of excise duty in the hands of Kantilal Chunilal must be calculated by reference to the wholesale cash price at which this firm sold goods in the course of wholesale trade because, according to the department, M/s. Alok Textiles was a related person. In the High Court this view of the department was negatived and the department went in appeal to the Supreme Court. The Supreme Court pointed out that in Union of India v. Bombay Tyres International [1984 (1) SCR 347 = 1983 E.L.T. 1896] the definition of "related person" in clause (c) of subsection (4) of Section 4 of the Act was read down so that the Section itself could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it shows that merely because a large volume of the sales of a particular company goes to some partnership or other entities, that itself does not make that other entities related persons and does not authorise the department to levy excise duty on the prices at which these later entities sell the products. Secondly, this authority also shows that merely because there are certain directors common to the assessee and the wholesalers, be they partnership firms or limited companies, that itself does not make the latter as related persons under Section 4 of the Act unless there is some mutuality. It has not been suggested by the department that there is any mutuality between the petitioner company and the other entities to whom the products are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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