LexUNION OF INDIA & ORS. versus HIND LAMP LTD.
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- UNION OF INDIA & ORS. v. HIND LAMP LTD. MAY 2, 1989 -~[SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.] Central Excises & Salt Act, 1944-Section 4(4)(c)-Valuation of goods for purposes of levy of excise duty-Whether Customer Companies can be regarded as 'related persons' as defined in Section 4(4)(c)-Whether the prices charged by the assessee company to its Customer Companies for its products or the prices charged by the Customer Companies for further sale to wholesale dealers and others should be the basis for determination of value of goods for levy of excise duty. The respondent company, a manufacturer of electric lamps, fluorescent-lamps and miniature lamps sold its entire products to five customer companies namely (a) Bajaj Electricals Ltd. (b) Philips India Ltd. (c) Crompton Greaves Ltd. (d) General Electric Co. oflndia Ltd. and (e) Mazda Lamps Co. Ltd. after putting the brand names of the said Cu~tomer companies as per their directions. The customer com- panies in turn sold these lamps under their respective names to wholesale dealers and others at prices higher than the prices charged to them by the Respondent Company. A B c D F Excise duty on electric lamps at first was a specific duty but lator j· it was changed to ad valorem duty. After such change there was a controversy between the Respondent Company and the Central Excise F -41 authorities as to whether the prices charged by the Respondent Comrany to its customer companies or the prices charged by the custo- mer companies when they in turn sold to wholesale dealers and others, should be the basis for determination of the value for levy of excise duty. As the Department insisted that latter shall be the value for levy of excise duty, the Respondent Company moved a Writ Petition in the High Court of Allahabad. The High Court by its order dated 14.S. 74 allowed G the Writ Petition holding that the prices at which the Respondent Company sold its products to tire Customer companies should be the value for levy of excise duty and not the prices at which the customer companies sold these to wholesale dealers and others. Hence this appeal by the Excise authorities. H 874 SUPREME COURT REPORTS [1989] 2 S.C.R. A Dismissing the appeal, this Court, B HELD: The first part of Section 4(4)(c) refers to a person who is so associated with the assessee that each had interest, directly or indi- rectly in the business of the other and the second part of that definition refers to a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub-distribntor of such distributor, The sale by the assessee company was on principal to principal bas~. and the share holding company (Bajaj Electrical Ltd.) and so called to associate companies of the foreign share holding companies. Goods were supplied to the Customer companies in their brand names as in the case of Atic Industries case. In Atic Industries case there was no allega- C lion of extra commercial consideration and in the instant case also there was no such allegation. In Atic Industries case, same prices were charged from all the customers. similar is the position in the instant -f case. [876G-H; 8770; 878A-B] In view of the ratio of the decision of this Court in Atic Industries D case the Judgment and order of the High Court is upheld and the appeal preferred by the Revenue dismissed. [879E] E Union of India v. Bombay Tyre International Ltd., [1984] I SCR 347;A.K. Royv. VoltasLtd., [l973]2SCRl089andUnionoflndiav. -+· A tic Industries Ltd., [1984] 3 SCR 930, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2858 of 1977. From the Judgment and Order dated 16.12.1976 of the Allaha- F bad High Court in Civil Miscellaneous Writ No. 179 of 1976. ~ A. Subba Rao, P. Parmeshwaran and Mrs. Sushma Suri for the+. Appellants. H.N. Salve, Ravinder Narain, K.C. Dua, P.K. Ram and D.N. G Misra for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an appeal by special leave from the judgment and order of the High Court of Allahabad H dated 16th December, 1976. '' - U.O.l. v. HIND LAMP LTD. [MUKHARJI, J.] 875 ). The question in this case was the valuation of goods for the A purpose of levy of excise duty under the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act'). The respondent company had submitted its price list in Form IV to the Superintendent, Ce
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