ORDER
P.C. Jain, Member (T)
1. Briefly stated the facts of the case are as follows :-
1.1 The appellants herein submitted a price list with effect from 1-4-1987 for sale to their resellers (dealers) in respect of commodities, namely, Nitrogen Standard and Nitrogen Dry manufactured by them. The prices declared were Rs. 695.00 for Nitrogen Standard and Rs. 705.00 for Nitrogen Dry.
1.2 In an earlier price list effective from 1-4-1986, the appellants declared the prices to their resellers at Rs. 795.00 and Rs. 805.00 respectively and after reduction of turn-over tax and Central Excise duty elements, the assessable value was approved at Rs. 684.39 and 693.00 as against the assessable values subsequently arrived at with effect from 1-4-1987 at Rs. 588.30 and 606.71.
1.3 The lower authorities have held that the price to the resellers is not acceptable as declared in the price list with effect from 1-4-1987 on the ground that there has been a clause in the Agreement between the appellants and their resellers (dealers) that the latter would promote the sales of the appellants’ products. This act of promotion of sales has been considered by the authorities as an interest directly or indirectly in the business of each other and therefore, the price at which the distributors/resellers/dealers are selling the goods had been adopted by the lower authorities in terms of the proviso (3) to Section 4(1)(a) of the Central Excise Act, 1944. In other words, the distributors/resellers have been considered as persons related to the appellants. Hence this appeal before the Tribunal.
2. Learned Advocate, Shri N. Mookherjee for the appellant company submits that the dealers are clearly separate class of buyers from that of industrial consumers and this differential price is also due to the fact that whereas the dealers take delivery of the goods from their factory gate, the industrial consumers are delivered the goods at their factory premises. He submits that third proviso to Section 4(1)(a) is clearly an authority for having the differential prices for different classes of buyers. There can be no dispute, submits the learned Advocate, that dealers are a different class of buyers than the industrial consumers. He, therefore, prays for allowing the appeal with consequential reliefs to the appellants.
4. Learned JDR, Shri R.K. Roy for the Revenue Commissioner reiterates the pleas of the lower authorities.
5. We have considered the submissions. We agree with the submissions of the learned Advocate that the dealers are a class of buyers different from the industrial consumers. We are unable to appreciate the allegation of mutual interest between the appellants and dealers merely on the ground of sales promotion by the latter of the assessee’s products. Promotion of sales is for the mutual benefit of both the buyers of the goods as well as sellers of the goods. That by itself, will not be sufficient to hold that the dealers are persons related to the appellants. Consequently, the invocation of the third proviso to Section 4(1)(a) as adopted by the Revenue is totally uncalled for. In view of the aforesaid discussions, we allow the appeal with consequential reliefs to the appellants.