COMMISSIONER, CENTRAL EXCISE, CHANDIGARH versus M/S. KWALITY ICE CREAM CO.

COMMISSIONER, CENTRAL EXCISE, CHANDIGARH versus M/S. KWALITY ICE CREAM CO.

The assessee-company and distributor-company were not ‘related persons’; the transaction was principal to principal and solely for price consideration; thus, assessable value cannot be computed based on the distributor’s sale price.

Parties
Appellant: Commissioner, Central Excise, Chandigarh; Respondent: M/s. Kwality Ice Cream Co.
Jurisdiction
India
Judgment Date
26 November 2010
Procedural Posture
Civil Appeal / Appeal Against Order of Central Excise & Gold [control] Appellate Tribunal, New Delhi
Outcome
Appeal dismissed
Legal Topics
Valuation of Excisable Goods, Related Persons Under Central Excise Tariff Act, Principal to Principal Transaction
Central Excise Taxation Valuation of Excisable Goods Related Persons Under Central Excise Tariff Act Principal to Principal Transaction

Case Brief

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Parties

Commissioner, Central Excise, Chandigarh

Appellant

M/s. Kwality Ice Cream Co.

Respondent

Procedural Posture

Civil Appeal / Appeal Against Order of Central Excise & Gold [control] Appellate Tribunal, New Delhi

Legal Issues

  1. 1 Whether the manufacturer-assessee and distributor-company are ‘related persons’ under s. 4(4)(c) of the Central Excise Tariff Act, 1985 for the purpose of excise valuation.
  2. 2 Whether the assessable value should be computed on the basis of the price at which the distributor-company sold the product.

Ratio Decidendi

The assessee-company and distributor-company were not ‘related persons’; the transaction was principal to principal and solely for price consideration; thus, assessable value cannot be computed based on the distributor’s sale price.

Court Disposition

Appeal dismissed

Orders

  • The appeals are dismissed; Tribunal's order that Kwality Ice Cream and the distributor are not ‘related persons’ is affirmed.
  • Assessable value is not to be computed on the basis of the price at which the distributor-company sold the product.