TaxTMI 
TaxTMI 
TaxTMI 
1985 (4) TMI 308
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ? (b) Whether the Appellant allowed any, and if so what, trade discount and if such discount has to be excluded from the computation of the assessable value in accordance with Section 4(4)(d)(ii) of the Act? (c) Whether the Appellant is entitled to exclusion of delivery charges from the computation of the assessable value ? 2. While the first two of the aforesaid questions arise in common with this Appeal in Appeal Nos. 125/80A, 78/81A, 1505-1509/84A as well, the third arises exclusively in this Appeal only. Two other issues which had arisen in all the Appeals, namely, inclusion of the value of the wrapping paper in the assessable value of the packed paper and relief under Rule 56A of the Central Excise Rules, 1944 were given up in the course of the arguments before us by an application. Accordingly, the order in this Appeal on the first two of the aforesaid questions disposes of the rest of the aforesaid Appeals as well. 3. The facts, as alleged by the Appellant, are as follows :- (a) the Appellant, manufacturing paper and paper boards, at all material times, sold their manufactured products directly to over 120 wholesale buyers all over India, (apart from Gover....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on 7-5-1959 and the Appellant holds no shares in M/s. Sun, who, however, held 5.9% shares in the Appellant company at the relevant time. Subsequently, it became diluted to 1%; (f) it would thus appear that while M/s. Sun were the collecting agents for a commission (not in controversy in this Appeal) on the one hand, they themselves are wholesale buyers to the extent of atleast 18% of the total production of the Appellant on the same terms and conditions as any of the other direct wholesale buyers numbering nearly 120 all over in India; (g) on the submission of various price lists by the Appellant claiming exclusion of discount at 10% and delivery charges at ₹ 50/- per M/T (for delivery at Appellant's godown in Calcutta) and ₹ 65/- per M/T (for delivery at buyer's premises in Calcutta), the Assistant Collector of Central Excise, Asansol directed the Appellant, on or about 16-6-1976, amongst other thing, to compute the assessable value after allowing a deduction of 5% trade discount only (equal to the discount given by M/s, Sun to purchasers from them of the quantity directly sold to them, i.e., 18% of the total production and to include the delivery charges, if incl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....since an agent has to be treated as a related person on account of the mutual interest that subsists between him and his principal in the business of each other. Further, M/s. Sun would appear to have substantial interest in the Appellant, when their share holding in the Appellant is compared with their other investments; (ii) in view of the marketing pattern of the sales of the Appellant, nearly 52% of their total production was necessarily sold through M/s. Sun. The dealers cannot purchase without going through M/s. Sun and all realisations were through M/s. Sun. Accordingly, in respect of nearly 70% of the total sales (made of 18% sales to M/s. Sun and 52% sold through them), the distribution is only through M/s. Sun and they happen to be the sole selling agents. Therefore, M/s. Sun is a related person to the Appellant. (iii) "delivery charges" had not been separately shown in the invoices and, in the absence of any severable transport cost, they could not be excluded from the assessable value; In the premises, he refused to interfere with the order of the Assistant Collector. The evidence on the basis of which he had come to the aforesaid conclusions was again neither disclo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ect purchase of a part of the goods produced by the Appellant that furnishes the criteria for adjudging relationship but mutuality of interest in the business of each other; (g) but then the question of M/s. Sun being sole distributor of the Appellant's goods to the extent of 52% of the Appellant's total production as concluded by the Assistant Collector or 70% as observed by the Collector, still remains, for "related person" includes, the Appellant's distributor in terms of the definition of the said expression. On this issue, as already observed, the Assistant Collector contradicts himself in his order. Nor is there any evidence brought! on record to support and prove that M/s. Sun is the sole distributor of the Appellant to the extent of the aforesaid 52% of their total production. The Collector as well does not discuss the evidence, if any, in holding that it was indeed, 70% of their total production that the Appellant sold through M/s. Sun and it is almost as if his mere ipsi dixit carries conviction on the issue; (h) if, as alleged by the Appellant and as found by the Assistant Collector, there were, indeed, direct sales to nearly 120 dealers all over the country (apart fro....