TWO STAR Vs. UNION OF INDIA

JUDGEMENT

(1.) The 1st petitioner is a partnership firm carrying on business of manufacturing and selling various electrical appliances. The petitioner are manufacturers of electrical gods including the geysers since last several years. The petitioners paid the excise duty o the said manufacture according to be provision of the Central Excises nd SAlt Act, 1944. The petitioners entered into an agreement with messrs. Bajaj Electrical Limited for supply the heaters with brand name "Bajaj". The price was also settled and it was provided that the price would be subject to review from the time to time depending on the market conditions,. The petitioners agreed to provide facility for testing of geysers before leaving the factory and the guarantee for a period of 12 of months was also given. The petitioners agreed to reimburse M/s. Bajaj Electrical Limited for any damages or los suffered due to defective manufacture.

(2.) In pursuance of this agreement, the petitioners supplied the water heater to M/s. Bajaj Electrical Limited from 1973 onward. It is not in dispute that the factory where the water heaters are manufactured is completely owned by the petitioners and M/s. Bajaj Electrical Limited have no control over the labour or the mode or manner in which the factory is run. The petitioners filed a price list on February 26, 1973 and it was approved. Thereafter price lists wear filed from time to time and thy were approved till March 1974.

(3.) The Central Excise Collectorate Published a trade notice on March 22, 1974 giving instructions regarding customers getting the goods manufactured with their brand names. In pursuance of this trade notice, the petitioners were served with the show cause notice dated October 21, 1974. by the Superintendent of Central Excise. By this show cause notice the petitioners were informed that the prices of M/s. Bajaj Electricals Limited would be taken as assessable value for the assessment of Central Excise duty in regard to the manufacture of water heater. The show cause notice stated that the goods manufactured by the petitioners bear the name plate of M/s. Bajaj Electricals Limited and, therefore, the prices charged by M/s. Bajaj Electricals Limited to its customers would be the assessable value. Another show cause annexed as Exhibits "F" and "J" to the petition the petitioner gave their reply but by orders dated January 1, 1975 and April 1, 1975 annexed as the Exhibits "H" and "L" to the petition, the show, and cause notices were confirmed. The petitioners preferred appeal against those order but the appellate were issued detaining the goods of the petitioners till the payment of the excise duty and those detention memos are annexed as Exhibit "O" and "P" to the petition. The two orders nd the two detention memos are under challenge in this petition.