1. The appellant was engaged in its factory at Verna, Goa in the manufacture inter alia of Cremaffin, a medicament. We are concerned in this appeal with the quantities of the product that the appellant cleared in response to orders placed by government medical stores in various parts of the country. The invoices that were issued, while indicating the manufacturer to be Knoll Pharmaceuticals' factory at Verna, showed the consignee to be its depot Knoll Pharmaceuticals Ltd. Four copies of the invoices that have been enclosed to the appeal show the consignee to be Knoll Pharmaceuticals Ltd, Shop No. 18, Vinayaka Plazza, Vidyanagar, Margao. Notice issued to the appellant proposed to recover duty on the basis that it is the value of the goods, when cleared from the depot, that should be applied and not the value when it cleared from the factory. We are concerned with the clearances made between July and October 2000. After considering the cause shown and hearing the assessee, the Assistant Commissioner, whose order has been confirmed in appeal by the Commissioner (Appeals), applied the price of clearances from the depot.
2. The contention of the counsel for the appellant is that, although the goods were despatched to the depot, this was done against the specific orders from the purchasers in each case. This fact is clear from each of the invoice which indicates that the goods were supplied was specified government stores depots indicating to be the date of the purchaser. The depot, it is contended, there has been a sale of the goods at the factory gate, applying the definition contained in Section 2 (h) of the Act, and there has been transfer of possession of the goods.
3. At the relevant time, the place of removal was specified in Section 4 (3) (c) of the Act, as a factory or any other place or premises of production or manufacture of the excisable goods, or a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty from where such goods are removed. Although it is not in dispute that the goods in question were removed from the factory to the depot, and from were they were despatched by the appellant to the destination specified by the purchaser. We do not see how it is possible in this situation to say that there has been a sale of the goods at the factory gate of the appellant. Section 2 (h) of the Act defines sale and purchase meaning any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. The sale as defined did not take place at the factory gate. The goods continue to be in possession of the appellant when they left the factory gate, and at least till they were removed from the depot. Hence it is not possible to say that there has been sale.