SIDHOSONS & ANR. ETC. ETC. versus UNION OF INDIA & ORS. ETC. ETC.

Excise duty is to be levied on the price charged by the manufacturer to the buyer, excluding the augmentation of value attributable to the goodwill in the brand name owned by the buyer, since such enhancement does not accrue to the manufacturer.

Parties: Petitioner: SIDHOSONS & ANR. ETC. ETC.; Respondent: UNION OF INDIA & ORS. ETC. ETC.
Jurisdiction: India
Judgment Date: 28 October 1986
Procedural Posture: Writ Petition / Decision on Merits
Outcome: Petition allowed. Rule made absolute.
Legal Topics: Central Excise Duty, Valuation Under Central Excise, Brand Name Goods

Tax Law Central Excise Duty Valuation Under Central Excise Brand Name Goods

Case Brief

Summary, issues, holding and outcome

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Full judgment text Legal principles 2 Authorities cited 5 Party arguments 2

Parties

SIDHOSONS & ANR. ETC. ETC.

Petitioner

UNION OF INDIA & ORS. ETC. ETC.

Respondent

Procedural Posture

Writ Petition / Decision on Merits

Legal Issues

1 What is the correct basis for valuation of goods for payment of excise duty when goods are manufactured under a contract and labeled with a brand name owned by the buyer?
2 Whether the enhancement in market value due to application of buyer’s brand name should be included in the assessable value for excise duty?

Ratio Decidendi

Court Disposition

Petition allowed. Rule made absolute.

Orders

Respondents shall levy excise duty on the basis of the price charged by the manufacturers to the buyers (e.g. Bajaj Electricals Ltd.).
Bank guarantee furnished by petitioners in context of the petition will stand discharged.