CHETAN B THADANI Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner owns a proprietory concern manufacturing Pressure Cookers of various sizes and the concern is registered with the Director of Industries as a small-scale industry. The petitioner sells the whole of its output to M/s. Vijay Trading Corporation, a partnership firm consisting of 5 partners, all of whom are unrelated to the petitioner.

(2.) On August 11, 1972, the petitioner submitted to the Excise authorities, the price-list in the prescribed form and in Column L5, the "assessable value" was declared. The assessable value declared was the price at which the pressure cookers were sold by the petitioner to Messrs. Vijay trading Corporation. The petitioner requested the Excise authorities to complete the assessment on that basis for the purposes of Section 4 of the Central Excises and Salt Act, 1944. The price-list was approved by the Customs authorities on November 18, 1972. The petitioner sought confirmation and that was also given by letter dated December 15, 1972.

(3.) The Excise authorities served a show cause notice dated June 21, 1974 on the petitioner stating that it appears that M/s. Vijay Trading Corporation were engaged in the manufacture of pressure cookers and the price declared by the petitioner was not a wholesale cash price. The Excise authorities called upon the petitioner to show cause why the price charged by M/s Vijay Trading Corporation should not be approved as a wholesale cash price. The petitioner gave his reply on July 17, 1974 pointing out that the transactions between the petitioner and M/s. Vijay Trading Corporation were between independent parties and were at arms length and in the normal course of business. The Assistant Collector, by his order dated October 22, 1974, rejected the claim made by the petitioner and directed that the price charged by the distributor to their dealers should be taken as a wholesale cash price within the meaning of Section 4(a) of the Central Excises and Salt Act, 1944.