JUDGMENT

BHAGWATI, J.:— This appeal by certificate granted under Arts. 132 and 133 (1) of the Constitution raises a short question relating to the applicability of the definition of "related person" contained in clause (c) of sub-section (4) of S. 4 of the Central Excises and Salt Act, 1944 as it stood after its amendment by S. 2 of Central Act 22 of 1973 which came into force with effect from 1st October, 1975. The facts giving rise to this appeal are few and may be briefly stated as follows :

2. The assessee is a limited company engaged in the business of manufacturing dyes and it has its factory situate in Atul near Bulsar in the State of Gujarat. The share capital of the assessee is held by two limited companies : Atul Products Limited holds 50 per cent of the share capital while the remaining 50 per cent of the share capital is held by Imperial Chemical Industries Limited, London. The assessee at all material times sold the large bulk of dyes manufactured by it in wholesale to Atul Products Limited and Imperial Chemical Industries (India) Private Limited at a uniform price applicable alike to both these wholesale buyers and these wholesale buyers in their turn sold the dyes purchased by them from the assessee to dealers as well as consumers. Now, until 13th March, 1978, Imperial Chemical Industries (India) Private Limited was a subsidiary company wholly owned by Imperial Chemical Industries Limited, London. But, in pursuance of the policy, of the Government of India requiring that not more than 40 per cent of the share capital of an Indian company should be held by a foreign shareholder, 60 per cent of the share capital of Imperial Chemical Industries (India) Private Limited was offered to the public, with the result that since 13th March, 1978 only 40 per cent of the share capital of Imperial Chemical Industries (India) Private Limited was held by Imperial Chemical Industries Limited, London and 60 per, cent came to be held by Indian citizens and Imperial Chemical Industries (India) Private Limited ceased to be a subsidiary company wholly owned by the Imperial Chemical Industries Limited London. Consequent upon this dilution of foreign share holding, the name of Imperial Chemical Industries (India) Private, Limited was changed to Crescent Dyes and Chemicals Limited. Atul Products Limited and Crescent Dyes and Chemicals Limited continued to be the wholesale dealers of the dyes manufactured by the assessee throughout the relevant period with which we are concerned in this appeal. It was common ground between the parties that the transactions between the assessee on the one hand and Atul, Products Limited and Crescent Dyes and Chemicals Limited on the other were as principal to principal and the wholesale price charged by the assessee to Atul Products Limited and Crescent, Dyes and Chemicals Limited was the sole consideration for the sale and no extra-commercial considerations entered in the determination of such price. Atul Products Limited and Crescent Dyes and Chemicals Limited, of course, sold the dyes purchased by them from the assessee at a higher price which inter alia, included the expenses incurred by them as also their profit.

3. On 15th Sept., 1975 the assessee submitted, a price list showing the assessable value of the dyes manufactured by, it on the basis of the wholesale price charged by it to Atul Products Limited and Crescent Dyes and Chemicals Limited. The Superintendant of Central Excise demanded certain information from the assessee with a view to satisfying himself as regards the correctness of the price list, submitted by the assessee and the requisite information was furnished by the assessee by its letter dated 23rd Sept., 1975. Thereafter correspondence ensued between the assessee on the one hand and the Superintendent of Central Excise an the other and ultimately on 29th Oct., 1975, the Assistant Collector of Central Excise approved the price list submitted by the assessee. The assessee thereafter we