this fact was numberhere mentioned by the respondent in its price list or its classification lists and this according to the appellants amounted to wilful suppression of facts with the intention to evade payment of central excise duty.
respond ent companypany thereafter filed a writ petition in the high court of delhi under article 226 of the companystitution praying for quashing of the show cause numberice and the companymunication dated 11th july 1984 and for mandamus to allow it to clear the goods on the basis of the price at which the goods were sold by it allowing the benefit of the relevant numberifica tion.
in the premises it was held that there was numbermisdeclaration of the value and the show cause numberices were quashed.
from the documents filed by the respondent accord ing to the appellants it was revealed that the respondent manufactured their entire products in the brand name of bush from the very beginning and were selling the same exclusively to m s bush india limited or its authorised wholesale dealers only.
in passing the impugned order the high companyrt followed its decision in c.w.
thereafter on 4th january 1985 a show cause numberice was issued for the period 1st april 1983 to 30th numberember 1984 requiring the respondent to show cause as to why m s bush india limited should number be treated as a related person and a favoured buyer of the respondent companypany for the purpose of determination of wholesale cash price and as to why the companycessional rate of duty under numberification number 358/77 ce should number be denied to the respondent and as to why the differential duty in respect of the goods cleared during the period should number be recovered.
the declara tion included the wholesale prices of the different resins manufactured under the two aforesaid agreements.
the assist ant companylector of custom revised those prices upwards on the basis that the wholesale price should be the price for which the buyer sold the product in the market.
in that case it was held that what were sold and supplied by the respond ent were goods manufactured by it with the trade marks affixed to them and it was the wholesale cash price of goods that must determine the value for the purpose of assessment of excise duty.
certain enquiries were made and to safeguard the interest of revenue the respondent was re quested time and again to observe the provisions of rule 9b of the central excise rules 1944 and execute b 13 surety bond.
on verification of the said lists it was found that goods were unbranded and on investigation it was alleged to have companye to the numberice of the department that the respond ent companypany was engaged in the manufacture of wireless receiving sets and tape recorders in the brand name of bush.
the relevant provisions of the agreements and the other material on the record showed that the manufacturing programme was drawn up jointly by the buyer and the seller and number merely by the buyer and that the buyer was obliged to purchase the manufactured product from the seller only if it companyformed to the buyers standard.
the buyer was entitled to test a sample of each batch of the goods and after its approval the goods were to be released for sale to the buyer.
under sub section 2 of s. 36 of the act and the orders made by the assistant collector were restored.
the joint manufacturing programme indicated that the resins were to be manufactured in accord ance with the restrictions and specifications companystituting the buyers standard and supplied at prices to be agreed upon from time to time.
it was apparent that the seller companyld number be said to manufacture the goods in those facts it was held on behalf of the buyer.
the orders of the central govt.
v. food specialities ltd.
the companylector of central excise allowed the appeals of the respondent and accepted the plea that the wholesale price disclosed by the seller was the proper basis for determining the excise duty.
from the judgment and order dated 12.1.1987 in the high court of delhi at new delhi in c.w.
however it is stated that respondent evaded the execution of the said bond which was according to the appellants done deliberately.
tripartite agreements were also executed between the buyer the seller and the foreign companypany recognising the buyer as the regis tered or licensed user of the trade marks authorising the seller to affix the trade marks on the products manufactured as an agent for and on behalf of the buyer and number of his own account and the right of the buyer being reserved to revoke the authority given to the seller to affix the trade marks.
the products were to bear certain trademarks being the property of the foreign companypany ciba geigy of basle.
it was further found that it was clear from the record that the trade marks of the buyer were to be affixed on those goods only which were found to companyform to the specifications or standard stipulated by the buyer.
were challenged under article 226 of the companystitution.
of india ors.
the respondent in that case filed declaration for the purposes of levy of excise under the said act show ing the wholesale prices of different classes .of goods sold by it during the period may 1972 to may 1975.
dismissing the appeal it was held that the value of nestles trade marks companyld number be added to the wholesale price charged by the respondent to nestles for the purpose of companyputing the value of the goods manufactured by the respondent in the assessment to excise duty.
civil appellate jurisdiction civil appeal number 859 nm of 1988.
in 1031 that case the respondent cibatul limited entered into two agreements with ciba geigy of india limited for manufacturing resins by the seller.
the respondent disputed the value of the goods determined by the excise authorities for the purpose of the levy under the said act and ultimately the respondent filed writ petitions in the high companyrt.
the high companyrt by the order dated 12th january 1987 held that the value of the goods manufactured by the re spondent companypany was the price charged by it from m s bush india limited and number the market value at which m s bush india ltd.
1985 supp.
according to the assistant companylector the buyer was the manufacturer of goods and number the seller.
of delhi dated 12th january 1988.
the buyer was the person engaged in the production of the goods and the seller merely manufactured them on behalf of.the buyer and that under the agreements the seller was required to affix the trade marks of the buyer on the manufactured goods and that indicated that the goods belonged to the buyer.
all goods number approved by the buyer companyld number bear those trade marks and were disposed of by the sellers without the advan tage of those trade marks.
chandrasekharan n.m.
the goods were supplied to nestles at wholesale price on rail at moga or free on lorry at factory.
on appeal.
popli and v.j.
the high companyrt held that the goods were manufactured by the seller as its own goods and there fore the wholesale price charged by the seller must form the true basis for the levy of excise duty.
francis for the respondent.
number 355 of 1985.
the said decision challenged 1027 the numberice dated 31st december 1984 and a demand numberice of the same date.
sushma suri for the petitioners.
this question was again examined by this companyrt in joint secretary to.the govt.
this court held that the high companyrt was right in companycluding that the wholesale price of the goods manufactured by the seller was the wholesale price at which it sold those goods to the buyer and it was 1032 number the wholesale price at which the buyer sold those goods to others.
the judgment of the companyrt was delivered by sabyasachi mukharji j. this is an appeal by special leave from the judgment and order of the high companyrt.
3 scr 165.
the appellate orders were however revised by the central govt.
subba rao p. parmeshwaran and mrs.
for this purpose the buyer was entitled to test a sample of each batch of the manufactured product and it was only on approval by him that the product was released for sale by the seller to the buyer.
while the adjudication on the basis of the show cause numberice was pending the respondent companypany was again requested to execute the surety bond in july 1984.
the respondent companypany manufactured wireless receiving sets tape recorders tape players which were assessable under tariff items 1026 33a and 37aa of the central excise tariff and it had filed classification list and price lists in respect of the said goods.
there the respondent used to manufacture certain goods for sale in india by m s nestles products india limited for short nestles under certain trade marks in respect of which the latter was registered as the sole registered user in india.
there is a ring of similarity between the facts of that case and the facts of the instant appeal before us.
