Judgment:
1. The appellants manufactured beverage bases which were supplied only to their wholesale traders. The supply was at the different prices.
After issuing show cause notice, the Asstt. Collector accepted the highest price charged for every type of beverage base and approved the price list and confirmed the differential duty amounting to Rs. 10,89,000.78. The assessees then filed an appeal. Before the Collector (Appeals) it was claimed that each franchisee holder was a separate class of buyer and therefore separate price charged was permissible. It was claimed that the determining factor for variation in the price was geographical location as also the appraisal made by the assessees of the potential of the franchisee holder. The Collector directed the assessees to produce price data for sustaining the price. The company produced before him the lower price and the highest price for the individual product. The Collector (Appeals) found the data inadequate and termed the fixing of price as "arbitrary" and not based on commercial consideration. He did not accept the argument that each buyer was a class of buyer. In his judgment, he relied upon the Bombay High Court judgment in the case of Godrej & Boyce. He observed that normally, a manufacturer would sell goods at the highest price. He was of the opinion that the price at which the goods were capable of being sold should be adopted and thus he confirmed the orders of the Asstt.
Collector. Hence the appeal.
2. We have heard Shri M.H. Patil, the ld. Advocate for the appellant and Shri K.L. Ramteke, the ld. JDR for the Revenue.
3. Shri Patil cites substantial case law to say that the judgment of the Bombay High Court in the case of Godrej Boyce -1984 (18) E.L.T. 172 (Bom.) did not relate to this. He mentioned that this finding of the Bombay High Court was set aside by the Supreme Court. He cited the Tribunal judgment in the case of Jagdish Electronics (P) Ltd. - 1995 (6) RLT 646. This judgment and the other judgment cited held that the different buyers situated at different places constituted separate classes of buyers. The judgment in the case of Travancore Cements Ltd. -1994 (71) E.L.T. 498 speaks of industrial buyers who are necessarily single corporate personalities. The belief of the ld. Collector that the individual buyers could not be termed as class of buyers is not based on law.
4. As long as the price is the sole consideration in the transaction, such different price has to be accepted. The Commissioner's belief that even in the absence of extra commercial consideration, the highest price that is capable of prevailing should be taken to be the basis of assessment, is not sustainable.
5. As regards the failure of the assessees to satisfy the ld. Collector (Appeals), we observe that it is for the Department to disprove the variation in prices and not for the assessees to give the detailed reasonings regarding the different prices. In the result, we set aside the impugned order and allow the appeal with consequential relief.