ALLIED TEXTILE LEATHER INDUSTRIES Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners have been manufacturing leather pickers. Under agreement dated 15th December, 1972, they have appointed M/s. Bhatt Brothers as their sole production purchasers. M/s. Bhatt Brothers have been purchasing the entire production of the petitioners. The agreement stipulates that M/s. Bhatt Brothers shall sell leather pickers at a price not exceeding 12% of the price which they may be paying to the petitioners.

(2.) The petitioners were asked by the Central Excise authorities to get the price list approved. On 29th June, 1976, the petitioners made a representation in that behalf. The Assistant Collector of Central Excise after having taken into account the petitioners, case made his order on 18th April, 1977 in which he stated that partners of Petitioner No. 1-Allied Textile Leather Industries - the manufacture and M/s. Bhatt Brothers - the sole production purchaser - were "Related persons". He, therefore, directed that petitioner No. 1 was not entitled to opt for assessment of their goods on the basis of the invoice price in terms of Notification No. 120 of 1975, dated 30th April, 1975. The petitioners were asked to file the price list in proper form under Sec. 4 of the Central Excises and Salt Act, 1944, and to pay duty on the prices approved by the appropriate authorities. The order was challenged by the petitioners in appeal which they filed before the Appellate Collector. On 11th October, 1977, the Appellate Collector dismissed the appeal. It is under these circumstances that the petitioners have filed this petition.

(3.) The Appellate Collector in this order has stated that the petitioners did not fulfil condition Nos. (iii), (iv) and (v) in the said notification because, according to him, the partners of the manufacturing firm and the partners of the sole production purchaser were related by blood. According to him, therefore, the prices shown by the petitioners in their invoice could not be accepted as normal prices.