K. Prakash Anand, Member (T)

1. In this case, the department alleges that respondents are manufacturers of electronic typewriters falling under sub- heading 8469.00 and inter-connecting computer devices and floppy disk drive falling under sub-heading 8473.00.

Prior to 10-6-1986, the respondents were filing price list in Part I claiming that their product was being sold to buyers, not being related persons in the course of wholesale trade - assessable under Section 4(1) (a) of Central Excises and Salt Act, 1944 (hereafter, the Act).

On 11-6-1986, the respondents filed a fresh price list in respect of their new range of electronic typewriters in Part V as excisable goods being sold in retail by the asses-see/related person under Rule 6(a) of the Central Excise (Valuation) Rules, 1975 (hereafter, the Rules). It was claimed that electronic typewriters will be sold through various branched of the respondents located at various places in the country. The sale was claimed to be a retail sale to the purchaser who usually placed the order only for a single machine.

In the context of their claim of selling the goods in retail and, therefore, of being entitled to valuation under Rule 6(a) of the Rules, the following further deductions were claimed:

(i) Distribution and retailing expenses @ 10% for model Nos. 400,400-D and 401 and @ 15% to 20% for other models.

(ii) Retailing expenses.

(iii) Freight/transportation, insurance and installation charges.

Respondents emphasise that there is no wholesale machine price at the factory gate.

2. The Assistant Collector of Central Excise, who adjudicated the case held that the customers of the respondents were generally not individuals or house-holds, but industrial consumers, Government, and other institutions and establishments. Electronic typewriters, it was held are an expensive and high technology product, which is not ordinarily sold in large quantities. The nature of the goods being such that they are generally sold in small number, even transaction in single item, it was held, could not be taken to be in the nature of retail sale, but were required to be treated as sale in the course of wholesale trade.

The Assistant Collector also pointed out in his adjudication order that the printed catalogue of the respondents nowhere indicated that the prices cited therein were retail prices. He held that the claim of change in pattern of sale effective subsequent to 10-6-1986 was imaginary and there was no justification for change in the basis of valuation for purposes of collecting Central Excise duty.

Accordingly, the Assistant Collector rejected the claim of the respondents to valuation under Rule 6(a) of the Rules. He, however, allowed deduction on cost of transportation/transit, insurance and equalised freight of Rs. 450/- upto specified destination plus the actual transportation expenses of the machine when taken by the engineers to the customer's place, as supported by documentary evidence. The deduction in the cost of installation charges and cost of ribbon wherever supplied was also disallowed.

3. When the respondents went up in appeal against this order of the Assistant Collector, the learned Collector (Appeals) set aside the order of the Assistant Collector holding that the Assistant Collector's findings were untenable. He held that it was not correct to hold that retail sales was only sale to individuals or household. He held that the Assistant Collector's order approving the respondent's price list under Section 4(1)(a) of the Act was not correct. He ordered that determination of assessable value should be done under Section 4(1)(b) read with Rule 6(a) of the Rules. The matter was remanded to the Assistant Collector for re-determination after allowing the appellants an opportunity of being heard in the matter. It is against this order of the Collector (Appeals) that the department is now before us.

4. We have heard Shri A.S.R. Nair, SDR, for the department and Shri Ravinder Narain, Advocate for t