G.A. Brahma Deva, Member (J)

1. Revision filed by the appellants before the Government of India against the Order-in-Appeal No. 1877/80 dated 1-1-1981 passed by the Collector of Central Excise (Appeals), Bombay has been statutorily transferred to this Tribunal as an appeal under Section 35P(2) of the Act.

2. Brief facts of the case are that appellants M/s. Weikfield Products Company (India) Private Limited are manufacturers of Prepared or Preserved Foods which fall under the Tariff Item 1(B) of the Central Excise Tariff. During the relevant period i.e. from 1-10-1974 to 30-8-1975 they had sold their goods through two broad channels viz. directly to the Canteen Stores Department (hereinafter called CSD) and to the Weikfield Central Marketing Organisation (hereinafter called the CMO), allowing 20% and 30% discount to CSD and CMO respectively. According to the appellants higher discount was allowed to CMO because they were sole selling agents for civil sales in India and they have to incur cost of freight for transporting the goods from Pune to outside markets and to incur a sizeable expenditure on their sales. Originally the appellants paid duty at the assessable value determined in accordance with discount given to CSD but subsequently after pronouncement of the judgment in the famous case of Voltas by the Supreme Court, they came to know that they were entitled to the deduction of higher discount under the old Section 4 in respect of their sales in the past. Accordingly, they filed a refund claim on 14-11-1975 amounting to Rs. 32,958.28 paise on the excess duty paid by them in respect of the goods sold to the CMO during the previous 12 months, under the old Rule 11 read with the old Rule 173J. Their refund claim was rejected by the Assistant Collector on the ground (i) assessable value was determined without any protest nor duty was paid under protest prior to 14-11-1975 and (ii) the transaction between the appellants and the CMO cannot be treated as at arm's length in view of the fact that most of the partners in the firm CMO are close relatives of the President and Directors- of the Appellant Company. In the appeal, the first Appellate Authority held that though the refund claim was made in time but rejected the appellant's appeal on the ground that the value of identical goods was otherwise determinable. Hence, this appeal.

3. Shri N.D. Khosla, learned Consultant, appeared for the appellants and submitted that the appellant is a Public Ltd. Co. incorporated under the Companies Act, whereas the CMO is a registered partnership firm having separate legal entity. CMO cannot be considered as a related person under Section 4(4)(c) of the Act even if the partners and the Directors in these two concerns are relatives in view of the ruling given by this Tribunal in the case of G.D. Industrial Engineers v. Collr. of Cus. & Central Excise, Chandigarh, reported in 1984 (3) ETR 39 and in the case of Meteor Satellite Ltd., Kathiuada, Ahmedabad and Telstar Electronics, Ahmedabad v. Collr. of Central Excise, Baroda, reported in 1984 (4) ETR 359. Further, he brought to our notice where the Collector (Appeals) in his Order No. 510/PN-47/85 dated 14-5-1985 has taken the same view in the appellant's case for the subsequent period holding that CMO is not a related person on the similar facts and circumstances. He argued that CMO cannot be considered as a special or favoured buyer as the appellants have sold for the same price to other Distributor CSD and it is not the case of the Department also that the appellants have charged an unduly low price from CMO. He contended that the Assistant Collector has held that transactions are not at arm's length without any authority for such findings and the appellate authority rejected the appeal on the ground which is clearly extraneous to the order of the learned Assistant Collector. He submitted that duty on the goods in question introduced on 1-3-1970, whereas the CMO had been appointed as their Dist