Ttk Healthcare Limited (Ttkhl) And Ors. vs The Commissioner Of Central Excise on 22 August, 2006
The High Court of Gujarat dealt with a similar situation in the case of Whitco Ltd. v. UOI . In this case the assessee was manufacturing goods for himself and for other customers. The goods manufactured for one of the customers could be sold to that customer only. The said customer has right to reject below par goods. It was alleged that the relationship between the assessee and the customer is of principal and agent but the High Court held that the relationship is that of principal to principal basis, advance payment of price at commencement of each quarter notwithstanding. The High Court observed that merely because the buyer had a right to inspect quality of the raw material and to check records maintained by the seller in that behalf, it cannot be said that the petitioner company was manufacturing FAB detergent cakes on behalf of the buyer.