TaxTMI 
TaxTMI 
1985 (9) TMI 89
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.... is owned by Atul Products Limited, 30 per cent belongs to a foreign company known as Ciba Geigy of Basle in Switzerland and the remaining 5 per cent to Ciba Geigy of India Limited. The respondent Cibatul Limited (referred to shortly as the "seller") entered into an agreement with Ciba Geigy of India Limited (the "buyer") on March 24, 1971 under which certain specified products, which included U.F. Resins and M.F. Resins, were to be manufactured by the seller in accordance with a manufacturing programme drawn up jointly by the seller and the buyer. The resins were to be manufactured in accordance with the restrictions and specifications constituting the buyer's standard, and they were supplied at prices agreed upon between the seller and th....
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....ent was executed between the three parties on December 1, 1973 in respect of the second agreement between the buyers and the seller, namely, that relating to Epoxy Resins. The trade-mark concerned was Araldite. 3. The respondent filed a declaration for the purposes of the levy of excise under the Central Excises and Salt Act, 1944 showing the wholesale prices of different classes of goods sold by it during the period May, 1972 to May, 1975. The declaration included the wholesale prices of the different resins manufactured under the two aforesaid agreements. The Assistant Collector of Customs revised those prices upwards on the basis that the wholesale price should be the price for which the buyer sold the product in the market. The Assis....
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....ods were manufactured by the seller as its own goods, and therefore, the wholesale price charged by the seller must form the true basis for the levy of excise duty. 5. Excise duty is levied under Section 3 of the Central Excises and Salt Act, 1944, on goods manufactured in India and, broadly, for the purposes of computing the duty, the value of the article is deemed under Section 4 of the Act (as it stood before its amendment by Act XXII of 1973) to be the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory for delivery at the place of manufacture. The words "manufacture" and "manufacturer" have been defi....
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....h the specifications of some other product and provided that the buyer has a need for that product, or the goods are sold to others in the market as sub-standard goods at a lower price or the goods are destroyed. It is significant to note that the buyer is not obliged to purchase the goods manufactured by the seller regardless of their quality, and that in the event of rejection by the buyer the alternatives present before the seller extend to the sale of the manufactured goods to others or even to the very destruction of the goods. It is apparent that the seller cannot be said to manufacture the goods on behalf of the buyer. 7. The appellant relies also on the circumstance that under the agreements the seller is required to affix the tr....