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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
M. Gouri Shankar Murthy, K.L. Rekhi, D.C. Mandal, JJ.
Collector of Central Excise, Madras -Appellant
Versus
Ashok Leyland Ltd. -Respondent
Order Nos. 130 to 135 of 1987-A, 130 of 1987, 135 of 1987
Decided On : 17-02-1987
K.L. Rekhi, Member (T)
1. These six appeals have been filed by the department. They are inter-connected and deal with a common issue. They are, therefore, being disposed of by this combined order.
2. The common issue involved is regarding valuation of the motor vehicles manufactured by the respondents for the purposes of assessment of central excise duty and determination of consequential refund due to the respondents as a result of the Madras High Court judgment. This judgment was in favour of the respondents and had declared that main dealers of the respondents were not their related persons.
3. The present controversy started with the coming into force of the new Section 4 of the Central Excises and Salt Act, 1944 on 1-10-1975. In accordance with the requirements of the new section, the respondents, by their letter dated 23-9-1975, disclosed their marketing pattern in the following terms :-
xxx xxx xxx xxx xxx
"2. DISTRIBUTION PATTERN
Our products in Clause 1 above manufactured at our works at Ennora, Madras are distributed to our various customers all over India through dealers net-work covering all the States. At the moment there are 13 independent Main Dealers, all non-related to us. The list of the dealers is given below:-
1. to 13.
X X X
The distribution is effected through the above main dealers who in turn have their own arrangement for sub-dealership. The Main Dealer appoints Sub-dealers who do not come into contact directly with us except as per the instructions from the Main-dealer. Our discounting pattern remains unaffected by any arrangement of Sub-dealership.
3. CLASS OF BUYERS
We have the following classes of buyers:
(a) Nationalised State Transport Undertaking.
(b) Government Projects/Departments/Local Bodies.
(c) Private Sector customers.
(d) Defence.
Direct Demanding Officers should route their orders through the DGS&D for purchases under Rate Contract for comet goods chassis only. We are also exporting our product as chassis and also as buses trucks etc. with bodies built by the following firms.
(1) "Jay Coach", Bombay
(2) "Sundaram Industries", Madurai.
4. REGIONAL SALES OFFICES
We have Regional Sales Offices at Poona, Bangalore, Vijayawada and Ahmedabad at present.
The function of the sales office is to give more prompt and timely service to our customers in all the spheres of sales activities, i.e. Customer contact, Marketing Intelligence, processing of documentation connected with orders, invoices etc.
5. DISCOUNTING PATTERN
Discount pattern is uniform for all dealers. In respect of other customers belonging to the different classes listed in 3 above, the discount pattern varies from one class to another. The details of the different discount stipulated are given in the price list proforma.
We follow a uniform pattern for all buyers within a class and no favours are shown to any particular individual buyer.
We also have a quantity discount scheme as detailed in the Price List proforma.
Such quantity discounts are allowed only on firm commitments and that too on a uniform basis.
It would be observed from the Price List proforma that the net inflow as price to us as the manufacturer remains unchanged, irrespective of our sales to the various classes of buyers."
According to the data made available to us, percentage-wise clearances of motor vehicles of the respondents during the material period were as under:-
4. The Assistant Collector held in his order-in-original dated 29-11-1975 that main dealers as well as sub-dealers of the respondents were related persons. He ordered assessment to be made on the basis of the retail sales price charged by the. sub-dealers. In appeal, the Appellate Collector, agreed that the main dealers were related persons but directed the Assistant Collector to re-examine whether sub(sic) persons. In remand, the Assistant Collector passed another order on 12-4-1977 in which he accepted the uniform discount of Rs. 1500/- given by main dealers to sub-dealers but disallowed the over-riding commission give
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