1988 (6) TMI 51

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....of 200 ml. The Excise Duty per bottle calculated at the above rate is Rs. 1.125. The petitioners have been paying excise duty on the aforesaid basis till they received a notice dated 18-6-1987 from the Superintendent of Distilleries, Hyderabad. The demand notice dated 18.6.1987 is reproduced hereunder :- ".......M/s. Raphael Pharmaceuticals (P) Ltd., are manufacturing a medicinal preparation named "Hempher" under the Licence on behalf of M/s. Cachet Parma (P) Ltd. Entire production is sold to M/s. Alkem Labs. As such, M/s. Alkem Labs become a related person referred to in Section 4(4) (c) of Central Excises and Salt Act, 1944. Under the proviso (iii) to Section 4(i)(a) read with Rule 6(c) and 6(a) of Central Excises Duty should be retail p....

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....ons of Section 4(1)(a)(iii) read with sub-section 4(c). Section 4 Clauses (1)(a)(iii), (3) and (4)(c) of the Act are reproduced for facility. "4. Valuation of excisable goods for purpose of charging of duty of excise - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be - (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale: Provided that - (i) Where, in accor....

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....s obvious from Clause (4) (c) that for the person to be a "related person", two conditions have to be fulfilled. It is necessary that the person should be a distributor of the assessee and also should be related to the assessee. 5. The assessing authority dismissed the objections to the demand notice and confirmed the demand. The petitioner took into matter to the appellate authority, the Commissioner of Excise. The Commissioner of Excise did not give any finding whether the said sole distributor was a "related person" within the meaning of Section 4(4)(c) of the Central Excises and Salt Act, 1944 as amended. He, in fact, by-passed and went into the question whether the wholesale price is correct or incorrect, and came to the conclusion th....