TaxTMI 
TaxTMI 
1988 (4) TMI 145
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....rand name 'Dexion'. They sold the entire out-put to M/s. Killick Nixon Limited whom they appointed as their sole-selling agents for the whole of India. The appellants gave them 20% discount over the listed prices. The sole-selling agents retained 6.5% discount and passed on the remaining 13.5% to their customers. The point of dispute in these 8 appeals is as to which sale price should form the basis of assessment for central excise duty - whether the appellants' sale price to the sole-selling agents or the sole selling agents' sale price to their customers. The period of dispute is from October, 1974 to 9th March, 1976. 3. The lower authorities have held that since the entire out-put of the appellants' goods was sold to the sole-selling ....
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....e not permissible for deduction. 6. We have given the matter our earnest consideration. The department's plea that the sole-selling agents were only a commission agent is a new ground taken for the first time during the hearing before us. The case made out by the lower authorities against the appellants all along was on different grounds, namely, the transactions not being at arm's length. The appellants were never asked to answer the charge that their sole-selling agents were only a commission agent. We find further from clauses 4 & 5 of the agreement between the appellants and the sole-selling agents that the agreement was one of sale and purchase of the goods and the sole-selling agents were required to pay the purchase price normally....
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....k Nixon Ltd., the sole-selling agents, were a sister concern of the appellants. (3) The appellants did not deny this statement, made in the impugned order-in-original, before the Appellate Collector. On the contrary, in ground No. (vi) of paragraph 6 of their memorandum of appeal filed before the Appellate Collector, the appellants stated as under :- "The Assistant Collector erred in inferring that just because the manufacturer and the sole distributor are sister concerns, the transactions between them are not at arms length." (4) The appellants maintained the same stand before the Central Government. Paragraph 4(d) of their revision application (now the present main appeal No. E-111/77-A before us) stated as under :- "The appli....
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.... "(c) 'related persons' means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee, and any sub-distributor of such distributor." 10. The appellants then stated that the aforesaid definition of 'related person' covered a holding company or a subsidiary company but not a sister concern and that there was no finding by the lower authorities that M/s. Killick Nixon Limited, the sole-selling agents, were either a holding company or a subsidiary company of the appellants. The appellants may have a point insofar as the later part of Section 4(4)(c) is concerned. But they....
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....ond ground relating to sales promotion, we re-produce below clauses 6(i) and (vi) of the agreement :- "6. The Distributors will - (i) Use its best endeavours to promote the sale of Dexion Products on the maximum possible scale throughout the territory; (vi) At its own cost provide literature art work photographs and display materials for the promotion of the sale of Dexion Products and advertise Dexion Products throughout the territory;" The appellants explained that publicity to be done by the sole selling agents was for increasing their own sales and it was not at the behest -of the appellants. We do not accept this explanation. M/s. Killick Nixon Ltd. were the sole selling agents of the appellants for the whole of India. Anyb....