The commission paid to the dealers was not a normal trade discount but was a remuneration for organizing sales and providing facilities. The dealers were related persons within the meaning of Section 4(1)(c) of the Central Excises and Salt Act, 1944, as they had a mutual interest in the business of the petitioner company. Therefore, the commission was includible in the normal price of the mopeds for the purpose of calculating excise duty.

SARDAR ALI KHAN, J.

( 1 ) MESSRS Mopeds India Limited, Renigunta Road, Tirupathi Who are the manufacturers of two-wheeler popularly known as Mopeds, is the petitioner herein. The writ has been filed for the issue of a Writ of Certiorari, to quash the order in C. NO. V/34/17/449/75-B3 in order No. 385/79 dated 25-9-1979 and the consequential demand in D. 2 No. 052609 dated 23-10-1979 for sum of Rs. 6,96,177. 09 p. towards the differential duty payable by the petitioner company and for a declaration that the approval accorded to excisable goods cleared under Tariff Item No. 34, 34-A and 68 on the price lists submitted on and after 26-5-1979 on which the respondent loaded the commission unilaterally is illegal and ultra virus the authority of the respondent. It is further claimed that the respondent may be directed to redetermine the assessable value of the price lists submitted by the petitioner as also the earlier approved price lists commencing from 1-10-1975 on the basis of the manufacturing costs and manufacturing profit of the petitioner company and also to grant consequential relief of refund of duty that may accure to the petitioner company.

( 2 ) THE Mopeds India Limited manufactures Mopeds under the name of Suvega Standard, Suvega Deluxe, Suvega Samrat excisable under the Central Excise Tariff No. 34 as two-wheeler motor vehicles designed for use on the road for which it has granted a Central Excise Licence L. 4 NO. 1/65 (M. V. ). The company also manufactures "motor Vehicle Parts" and "accessories of motor vehicles" falling under Tariff Item No. 34-A under the L. 4 Licence No. 1/75 and certain other parts of motor vehicles falling under the Tariff Item NO. 68 with effect from 1-3-1979 under Central Excise Licence L. 4 NO. 1/78-79. The three items of manufacture viz. , Suvega Standard, Suvega Delux and Suvega Samrat are assessable to duty under the Central Excise and Salt Act, 1944. The petitioner Company is giving a commission of Rs. 110. 00 for Suvega Standard, Rs. 145. 00 for Suvega Deluxe and Rs. 165. 00 for Suvega Samrat to its dealers. It is the payment of these commissions to the dealers which are the subject-matter of litigation in this writ petition. The petitioner company is said to be having 179 dealers all over the country to whom 98% of the vehicles are sold. The delivery of vehicles at the factory gates does not generally exceed more than 2% of the sales in a year. The petitioners company has sales depots at several places in the country and deliveries of companys two-wheelers are effected to the various dealers and customers in the country through such depots. It is the contention of the petitioner company that the sale of goods to the dealers are outright and the price is the sole consideration for the sales and no direct or indirect commercial, financial or other relationship other than that created by the goods exists between the company and the dealers who are independent unrelated wholesale buyers. It is also contended that no part of the sale proceeds of the excisable goods on their resale from such dealers accrues to the company either directly or indirectly. An agreement is entered into between the company and the various wholesale dealers to whom the companys products are sold under which the company imposes an obligation on the dealers to tender service to every vehicle after its sale, for which purpose the necessary service stations, repair shops, spare parts stores, salesmen etc. , apart from the services of a trade mechanic and show room are maintained. Further more, under the agreement every dealer is given a commission of Rs. 110. 00 on Suvega Standard, Rs. 145. 00 on Suvega Deluxe and Rs. 165. 00 on Suvega Samarat, the mopeds, sold by the dealer. A commission of 20% on ex-factory price on the spare parts is also provided in respect of the sales to wholesale dealers. The contention of the petitioner company is that these commissions are paid out of selling price/profits of the company and n

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