JUDGMENT

SABYASACHI MUKHARJI, J. :— This is an appeal under section 35-L(b) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) from the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as the Tribunal), dated the 20th January, 1984.

2. The appellants are the manufacturers of Supercem Waterproof Cement Paint, hereinafter called as the Product, and other allied products in their factory at Madras. The manufacture and market this product throughout India. It is stated that the appellants are a small manufacturing firm with no branches and/or sales offices in any other State, city or town. In these circumstances, an agreement for sale described as an agreement of sale dated 1st May, 1962 was entered into with Gillanders Arbuthnot & Co. Ltd., of Calcutta, hereinafter called Gillanders. The said company has a very big sales organisation having its offices located at all important places in the territory of Union of India and they market goods of all types, not only of the appellants herein, but also of several other reputed manufacturers through their well staffed offices in all the States of India. The appellants vide their letters dated 23rd April, 1979 and 15th May, 1980 to the Excise authorities, had claimed a refund of Rs. 2,39,153.63 on account of excess excise duty paid on the assessable value on the basis of price at which the Gillanders had sold the products to its customers, during the period July, 1977 to March, 1979. Both the Assistant Collector by his order dated 29th May, 1980 and the Collector by his order dated 24th March, 1981 rejected the contention of the appellants and held that the assessable value is the price at which Gillanders sold the goods.

2. The Tribunal in its order dated 20th January, 1984 referred to relevant clauses in the said agreement dated 1st May, 1962 and came to the conclusion that it was abundantly clear from the conditions that the title to and the ownership in the goods consigned to Gillanders was not to pass to them. According to the Tribunal a sine qua non of a sale is that the title should pass from the seller to the purchaser. When once that were not so, according to the Tribunal. When once that were not so, according to the Tribunal, then it was futile to contend that it was an agreement for sale. The Tribunal on an analysis of conditions of agreement came to the conclusion that the true character of the agreement was that it was an agreement for sole selling agency and not an agreement for sale. The Tribunal also referred to the expression a related person in the definition given by Sec. 4(4)(c) of the Act and held that Gillanders was a related person and, therefore, the assessable value of the goods for levy of excise duty must be on the basis of the price at which Gillanders ordinarily sold these in the course of wholesale trade less the transportation cost and other permissible deductions such as duty of excise and sales tax, if any, subject to proof. Aggrieved thereby, the appellants have come up in this appeal to this Court.

3. The first question that was canvassed and which requires to be determined is whether the agreement dated 1st May, 1962 is an agreement for sale or is one for sole selling agency.

4. In the said agreement, the appellants have been described as a partnership firm carrying on business at Madras and referred to as The Manufacturer and Gillanders of Calcutta described as The Selling Agents. The agreement, inter alia, stated that the selling agents had agreed to stock adequate quantities of the product for the purpose of sale thereafter. The manufacturer however agreed to accept return of all stocks held by the selling agents for a period of more than two years and replace such stocks free of all charges, provided the lids of the containers were intact and sealed The agreement further stated that all consignments would be despatched by the manufacturer at Railway risk. In case there