TaxTMI 
TaxTMI 
1997 (11) TMI 486
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....India Undertaking, but at a higher price. The price charged from the Defence was Rs. 33,393/- as against Rs. 53,993/- from M/s. HAL. The prices charged were in terms of the contract which were entered into by the appellants with the respective buyers. In case of supplies to the Defence, there was a stipulation that the appellants would be supplied life expired batteries and they were to retrieve silver contained in these batteries and after refining, use the same for the manufacture of the batteries and they were to give a rebate to the Defence in the price to be charged per battery. The appellants while invoicing the goods to the Defence, took the value of the silver used in those batteries as was recovered from the life expired batteries ....
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....e excis­able goods at the transaction value, except in areas where there may be scope for manipulation (such as sales to or through related persons) and making specific stipulation with respect to situations frequently encountered in the sphere of valuation". He has pleaded, in this background there was no warrant to demand the duty from the appellant. He has pleaded there was no additional considera­tion for sale of the batteries to the Defence. He, in this connection, referred to the Government of India order reported in 1982 (10) E.L.T. 653 wherein, it had been set out that notional value was not acceptable when actual value was available. He also cited the decision reported in 1989 (43) E.L.T. 165 to highlight that the sale tran....
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....tity of materials and stores so supplied was specified at a rate and got set off or deducted from any sum due or to become due thereafter to the contractor. Mr. Virmani, appearing for the appellant submitted before us that in the instant case, there was no such independent and separate sale. But we are unable to accept. Though, in a transaction of this type there is no inherent sale; a sale inheres from the transaction. Clause 10 read in the proper light indicates that position." 4. The learned Advocate pleaded that there was a two way sale and the life expired battery which was supplied was in fact a sale to them and they took the value of the material at which the same was given to them for arriving at the as­sessable value. ....
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.... the sale price based on this lower rate of the silver which was held to be payable for the silver which was retrieved from the life expired batteries. He has pleaded that the lower price charged was on account of the supply of the life expired batteries. He has pleaded that the value had to be reflective of the true cost of the material and it could not be a conceptional value. He further pleaded, while arrangement for the adjustment of the price on account of supply of life expired batteries were reflected in the invoice, there was no indication as to the weight of the silver taken into reckoning for the purpose. He has pleaded that suppression was there with intention to evade payment of duty. 7. We have considered the pleas made....
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....hey had indicated even a lower price as the appellants were getting the silver through the medium of life expired batteries from the Defence and they had made no payment for this silver. If Defence had indicated a price of Rs. 150/- per kg, the appellants would have adopted that and as they were indicating the amount for the job work that they were doing i.e. making the battery by use of the silver supplied to them. It could not mean, therefore, that any price which is indicated by the Defence can be taken as reflective of the true value of the silver. In terms of Section 4, the price that is to form the basis for assessment is the price at which the goods in the ordinary course of business could be sold. The sale to Defence in the backgrou....