TaxTMI 
TaxTMI 
1996 (6) TMI 204
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....cturers of two different types of Electric Motors described as ''Standard" and "Non-standard motors", they filed Price Lists in Part I and Part II, where Part I was in relation to the Standard Motors and Part II was in relation to the Non-standard Motors. It however appeared that the prices shown in Part II were lower as compared to those in Part I. Further, discount claimed in Part II was higher, which was felt as an attempt to suppress the correct assessable value. It also appeared that prices claimed in Part II were not actually the sale prices for sale to any specific class of buyers but were the prices negotiated individually with each specific customer which included traders and dealers. On issue of Show Cause Notice before approval of both the Price Lists, the appellants contended that those motors which were manufactured as per certain defined specifications and design were described as "standard motors" and when customers wanted some change in specifications and/or design they would order accordingly and the Motors then tailor-made, would fall within the category of Non-standard Motors and further contended that, price in Price List Part I and Part II cannot be compared, a....
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....y was higher than the normal discount given to the dealers/traders in Part-I Price List, and though no objection was raised in relation to other details in Price Lists in both the Parts, the Department have not approved the Price for non-standard Motors, ordered by and supplied to such traders and the discount offered had been curtailed upto 35%, mentioned in Part I Price List and the issue that has arisen for determination is whether the non-acceptance of Part II Price List in relation to sale of Non-standard Motors to such traders, is justified. 4.2. The Ld. Advocate has submitted that Standard Motors and Nonstandard Motors should not be taken as the same class of goods and in that case, comparable price indicated in Part I Prices List cannot be taken into consideration. Even assuming, as is submitted by the Ld. Advocate, that both the items fall within the same class of product or are taken as the same goods, Section 4(1)(a) proviso (i) makes a limited departure to the main provisions in respect of different classes of buyers and indicates that there could be price differentiation for the same goods when the class of buyers are different. He has then pleaded that the Tra....
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....submission, the price of Non-standard Motor is shown as lower than those of Standard Motor which also is unusual and the objection from the Department is only in relation to proposed price to be charged from those who are the Dealers/Traders. In his submission, Dealers/Traders cannot form different class of buyers in relation to artificially created distinction as Standard and Non-standard Motors. The Ld. SDR has further pleaded that if the Non-standard Motors are tailor-made and prices are negotiated prices, there could be no question of granting any trade discount. He has pleaded that the case law referred to by the Ld. Advocate does not have any bearing on the issue here. 6. Before considering the issues raised, it may be clarified that the present group of appeals actually involve in consideration of Five orders-in-Appeal, each order dealing with group of Appeals, and out of those orders-in-Appeal, the order No. CS-53 to 91/B-III/95, dated 23-5-1995 is the detailed order passed and in the orders-in-appeal subsequently passed, because the same individual Appellate Authority has heard all the appeals, she has endorsed her view taken in her order dated 23-5-1995. In some o....
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.... 10. Section 4 of the Central Excises and Salt Act, 1944, provides for valuation of excisable goods for the purpose of charging duty of Excise Clause (a) of sub-section (1) of Section 4 provides for normal price charged from the buyers in wholesale trade. Exception is however made in proviso to the said sub-section where proviso (i) accepts the different price charged for same item from different class of buyers, for the purpose of ascertaining the assessable value. 11. With no definition for `Class of buyers' given in the Act, it has always remained an issue to be determined in relation to each individual case, with only broad criteria laid down and with certain types of buyers identified as forming separate class, the Tribunal have, In Re : Travancore Cement Ltd. (supra) observed that "It is therefore, left to the choice of the manufacturer/assessee to form classes of buyers and what is required to be examined is while accepting such formation of separate class of buyer, whether classification of buyers to be made by an Assessee, would be at his mere whim and fancy or would have some nexus to commercial practice of sale of goods and business". 12. While rec....