TaxTMI 
TaxTMI 
1995 (1) TMI 69
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....s said to be the holding company. One of the companies held by K.D.L. was Khoday Brewing and Distilling Industries Private Limited (K.D.B.I.) of which the appellant is a division. There is a partnership firm, Khoday, RCA. The partners of the said firm are all members of the Khoday family which controls the K.D.L. and K.D.B.I. The main business of this group of industries is manufacturing and bottling of beer and other alcoholic liquors. 3.Until 1978, the bottles required by the said group of industries for bottling beer and other alcoholic liquors were purchased from M/s. Alembic Glass Industries which has a plant near Bangalore. In the year 1978, however, the said group of industries established their own unit for manufacturing the bott....
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....r of Central Excise went in appeal to the Tribunal, which allowed the appeal on the following findings : That the price declared by the appellant was far below the(a) cost price and is totally unacceptable. The price declared was only a fraction of the price charged by M/s. Alembic Glass Industries for similar glass bottles. The sale of bottles to others was only of inferior quality(b) and 'reject' bottles. The sale was to dealers in second-hand bottles (kabariwalas) and, therefore, that price cannot be adopted as the basis for valuation under Section 4(1)(a). In view of the refusal/failure of the appellant to produce(c) the relevant data and material called for by the authorities, it must be held that the value in this case cannot....
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....than the prices declared by the appellant, the prices of Alembic should be adopted but where the prices of Alembic were lower than the prices declared by the appellant, the appellant's prices should be adopted. The learned counsel submitted that the course adopted by the Tribunal is inequitable besides being illegal. Sri Joseph Vellapally, learned counsel for the Revenue, on the other hand, justified the approach of the Tribunal as wholly consistent with the Rules and submitted further that where the appellant itself has declared higher values, it cannot object if those values are accepted. 7.Sub-section (1) of Section 4, which is relevant for our purposes, reads thus : "S. 4.Valuation of excisable goods for purposes of charging of du....
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....holesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail; where the normal price of such goods is not ascertainable for(b) the reason, that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed." 8.Under Section 37 of the Act, the Central Government has framed the Central Exc....
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....(ii) the cost of production or manufacture, including profits, if any, which the assessee would have normally earned on the sale of such goods; where the assessee so arranges that the excisable goods are(c) generally not sold by him in the course of wholesale trade except to or through a related person and the value cannot be determined under clause (iii) of the proviso to clause (a) of sub-section (1) of section 4 of the Act, value of the goods so sold shall be determined — in a case where the assessee sells the goods to a related(i) person who sells such goods in retail, in the manner specified in clause (a) of this rule; (ii) in a case where a related person does not sell the goods but uses or consumes such goods in the produc....
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.... should be the basis and that the Revenue cannot adopt or shift to another basis. It is not possible to agree. The submission of the learned counsel ignores the fact that the bottles manufactured by the appellant are of different values, i.e., of different sizes and shapes. The value of each type of bottles is different. Price lists filed by the assessee indicate the value of each type or category of bottles separately and the authorities too have to determine the value of each type/category of bottles separately. Different classes or categories of goods may call for different method of valuation to be adopted. If so, there is nothing illegal if the Tribunal directs that in case of those categories of bottles where the price declared by the....