TaxTMI 
TaxTMI 
1988 (5) TMI 119
X X X X Extracts X X X X
X X X X Extracts X X X X
....the appellants. 2. From their factory all the goods were removed to their sales depots and further disposal of the goods took place only from these sales- depots. Their prices were for destination. They had appointed three authorised dealers. These authorised dealers had entered into special agreement with the appellants. These authorised dealers were given 25% plus 15% (cumulative 36.5%) discount on the purchases made by them. In addition, these three authorised dealers procured orders from their buyers (consumers/dealers) and transmitted these orders to the appellants. The appellants invoiced and consigned the goods direct to these buyers of the authorised dealers. The buyers were given a varying discount of amount which was not below ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Central Excises and Salt Act, 1944, this could be done only if the authorised dealers in the first tier were proved to be 'related persons'. But such is not the case of either the lower authorities or of the learned representative of the department before us. Nor is their any evidence on record to show that the three authorised dealers of the appellants were related persons in terms of Section 4(4) (c) of the Act. The authorised dealers were, no doubt, bound by written agreements with the appellants. But these agreements contained the usual terms and conditions as we commonly see in the dealership agreements for machinery items. In the circumstances, we hold that the three authorised dealers of the appellants were independent buyers a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onsideration and deduct it from the gross discount of 36.25% given to the authorised dealers. We order that the net discount so arrived at shall be accepted for working out the assessable values of the goods sold direct to the authorised dealers. 5. We do not accept the plea of the appellants that their sales to consumers/dealers in the second tier, being sales through the authorised dealers, should also be accepted as sales to the authorised dealers. Here, the role played by the authorised dealers was that of a commission agent. They procured the orders from consumers/dealers and transmitted them to the appellants. The appellants invoiced and despatched the goods direct to the consumers/dealers. When the property in the goods never pass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd hence the actual trade discount allowed to them should alone be admissible in respect of the goods sold to them. We find merit in this plea. The actual consumers of motor vehicle parts were certainly a separate class from the authorised dealers in the first tier. While a small dealer, as compared to a bigger dealer, would not, by itself, constitute a separate class,we observe that there was qualitative difference between the authorised dealers in the first tier and the dealers in the second tier. The authorised dealers were bound by the terms and conditions of the agreement entered into by the appellants, such as maintenance of a show-room, keeping adequate class (stock?) for servicing the market at all time etc. The dealers in the secon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e concerned. 7. In their revision application filed before the Central Government (now the present appeal before us), the appellants have mentioned that since their sales were ex-depot and their list prices were FOR destination, post-manufacturing expenses like freight and depot costs should be deducted from their list prices. Their claim is admissible in principle as held by the Hon'ble Supreme Court in 1983 E.L.T. 1896 Bombay Tyres International and 1987 (27) E.L.T. 553 (SC) MRF Ltd., but the fact is that there seems to have been no claim for such deductions either in the price-lists or later before the Asstt. Collector. The order-in-original is silent on these deductions. The order-in-appeal clearly records in paragraph 2 (iv) that th....