Full Judgment
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.
Respondents emphasise that there is no wholesale machine price at the factory gate.
2. The Assistant Collector of Central Excise, who adjudicated the caseheld 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 Rufles. 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 disal-lowed.
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 the respondents.
5. The learned SDR reiterates"the view taken in the order of the Assistant Collector and emphasizes that this is supported by the decision of this Tribunal in the case of Collector of Central Excise, Madras v. Madras Rubber Factory Ltd. 6. In particular, it is emphasized that the respondents themselves were claiming assessments in accordance with valuation under Section 4(1)(a) of the Act upto 10-6-1986. There was in fact no change in their sales pattern, which would justify a change in the basis of valuation effective from 11-6-1986.
7. The learned Advocate concedes the point that the respondents had earlier sought to be assessed to duty on the basis of valuation under Section 4(1)(a) of the Act. It is submitted, however, that there is no estoppel in taxation matters as held by the Hon'ble Supreme Court in the case of Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India and Ors, -1983 ELT 1566 (S.C.). The assessee was valued within its rights to make a claim for different basis for valuation if he was earlier harbouring under a mistaken impression of the law.
8. It is emphasized that the point at issue in this case is well settled in the light of the following case law:Collector of Central Excise, Bombay v. Voltas Ltd.Collector of Central Excise, Meerut v. Escorts Ltd. 9. Shri Ravinder Narian emphasizes that there has been, in fact, no sale to traders as such and the sale is only to consumers.
10. So far as the facts of the case are concerned, there is hardly any dispute between the two sides. The respondents are selling their product to industrial consumers, Government, other institutions and establishments. The department's contention that since the item is a high technology product, which is also very expensive and, therefore, not ordinarily sold in large numbers, therefore, such transactions should be treated as wholesale is far fetched. What we have to look at is not the nature of the product, but the nature of the transaction.
The simple point to be looked into is whether sale is wholesale or it is retail. Wholesale sales are sales to dealers who re-sell the goods to others. The sajes may even be made to industrial consumers who use the goods in the manufacture of other goods or the sale may be to institutions or bulk users who buy in bigger bulk for their own commercial purpose. This is in contradistinction to a buyer who makes the purchase for his own use, as in this case.
The law on the point at issue is well settled by the decisions which have been cited before us by the learned Advocate in his favour. It is not, therefore, necessary to dwell on this point at greater length.
11. We, therefore, dismiss this appeal of the department and uphold the remand order of the Collector (Appeals) in which it is directed that the Assistant Collector should redetermine the assessable value under Section 4(1) (b) of the Act, read with Rule 6(a) of the Rules, after giving the respondents an opportunity to restate their claim, especially in regard to various deductions claimed.