ORDER
1. These are seven Revision Applications filed by the appellants before the Government of India. On the setting up of the Tribunal, these are transferred here and are being treated as appeals before us.
2. Since all these appeals are related to the same issue, these are being disposed of by this common order.
3. When the matter is called, Shri Ajwani, learned Senior Departmental Representative raises the preliminary point in respect of Appeal No. 213/77, that the plea of brand name was not raised before the Assistant Collector. He seems to make the point that the appellants, therefore, should not be permitted to raise this pleas at this stage. We find that this plea was not only raise before the Appellate Collector but the Appellate Collector had also given it due consideration and passed orders thereon. There is, therefore, no ground for raising any objection to this plea.
4. Shri J.J. Bhatt, learned Advocate for the appellant has stated that the basis stand of the appellants has always been that they are liable to duty on ex-factory prices. It is submitted that the plea relating to brand name follows from this basis argument.
5. It is further stated on behalf of the appellants that they are fully covered by the ratio of a number of CEGAT, High Colurt and Supreme Court decisions as mentioned below:-
1. Union of India and Ors. Etc. Etc. v. Bombay Tyre International Ltd. Etc. Etc. 1983 ELT 1986 (SC)
2. Redihot Electricals Delhi v. Union of India and Ors. 1986 (23) 421 (Del)
3. Union of India v. Cibatul Limited 1985 (22) ELT 302 (SC)
4. Two Star and Anr. v. Assistant Collector of Customs, Central Excise, Bombay and Anr. 1981 ELT 865 (Bom)
5. Union of India and Ors. v. Atic Industries Ltd. 1984 (17) ELT 323 (SC)
6. CEGAT order No. 328 dated 28-4-1986 in the case of Polar Auto & Engg. Industries P. Ltd. v. Collector of Central Excise, Delhi.
6. Responding, the learned SDR has sought to reiterate the point made in the order-in-original that the judgement in the Voltas case was given on the issue of whether the assessee could be charged to duty on the basis of prices charged directly to consumers. It is stated that the issue of brand name owners was not before the court. It is urged that if main argument of the appellants is related to post manufacturing expenses, then the matter may merit to be remanded for a determination thereof.
7. Referring to the Redihot Electricals and Cibatul decisions, it is again submitted on behalf of the Department that the issue in those cases was as to what should be considered as manufacture for and on behalf of another person. It is submitted that the issue of brand owners is distinct and in view of the special tie; up, they should be treated as related persons and assessment should be made under Section 4 (1) (b) of the Central Excises & Salt Act, 1944. To support this argument, it is pointed out that normally a manufacturer should have post manufacturing sales responsibilities which the appellants do not have. On the other hand, the brand owner does not have the manufacturing head-aches and liability. Therefore, manufacture for a brand owner is a special tie up in respect of which old Section 4(1 )(a) of Central Excises Act cannot apply, and assessment should be under Section 4(1 )(b) on best judgement basis.
8. We have carefully considered the facts of the case and the submissions made before us. The simple issue involved in all these appeals is whether in a case of manufacture on behalf of a brand owner, the valuation of exciseable goods under Section 4 of the Central Excises & Salt Act, 1944 should be based on the prices, of the manufacturer to the brand owner or on the prices of the brand owner to his buyers. A number of judgements have been cited on behalf of the appellants, in order to support the point that appellants are liable to Central Excise duty on the basis of their ex-factory prices minus post manufacturing expenses which, according to the appellants is the basic stand which, they have taken. Following this position, it is urged that appellants prices to Bajaj represent the correct basis for determination of assessable value and that the escalated prices at which sale is made by Bajaj would include various post-manufacturing expenses which cannot be included. We find that this Tribunal has already decided in the ease of another manufacturer supplying goods to brand owner Bajaj that duty is leviable correctly on the prices of the manufacturer to the brand owner and not the prices of the brand owner to his buyers, this decision is contained in order No. 328/86 dated 28th April, 86 in the case of Polar Auto Engineering Industries (P) Ltd. v. Collector of Central Excise, Delhi.
9. On behalf of the Department, an attempt has been made to establish that appellants cannot rely on the decisions in the Voltas & Redihot Electricals or Cibatul cases. Since, it is pointed Out that the issue of brand owner was not before the courts in those cases. We do not consider it necessary to go into this argument at any length for the reasons, that the appellants have themselves stated that they are relying on the relevant judgements only in so far as the basic issue as regards post manufacturing expenses is concerned. As understood from the angle that the valuation of goods for payment of Central Excise duty should be on the basis of prices at the point of clearance of the factory, so far as the issue of brand owner is concerned, as they have added that they are already covered by the decision of this Tribunal in the case of Polar Auto Industries P Ltd. (Supra).
10. The learned Department Representative has made a point that the manufacturer in this case has no post manufacturing sales responsibilities and the brand owner has no headaches and responsibilities and therefore, this arrangement should be considered. as special tie up, in respect of which valuation of goods manufactured should be done under Section 4(1 (b) of the Central Excises & Salt Act on the best judgement basis. We cannot agree with this view as it is not the order. Department’s case that the transactions between the appellants and the brand owners are not at arms length or that one has interest in the other’s business or there was extra commercial consideration in the prices agreed between the parties. This judgement of the Tribunal relied on the decision of the Bombay High Court in the case of Two Star and Ors. v. Union of India.
11. The issue of brand owners has been finally settled by a Supreme Court decision which was not cited before us and that is Jt. Secretary to Governemt of India v. Food Specialities 1985(22) ELT 32V In that case, Food Specialities entered into an agreement with M/s. Nestle to manufacture on their behalf sweetened condensed milk soluable coffee, & Baby Milk foods under certain trade mark in respect of which the latter was registered as the sole user in India. It is held by the Supreme Court that what were sold and supplied by the respondents were goods manufactured by it with trade mark affixed to it and it was the actual price of such goods that must determine the value for the purpose of excise duty. It was held that it was the wholesale price at which the goods with the trade mark affixed to them were sold by Food Specialities Ltd. to Nestle Products (India) as stipulated under the agreements which would be the value of the goods for the purpose of excise duty.
12. Accordingly, all these appeals have to succeed. Appeals allowed.