UNION OF INDIA AND OTHERS vs ATIC INDUSTRIES LIMITED

The Supreme Court upheld the constitutional validity of Clause (c) of sub-section (4) of Section 4 of the Central Excise and Salt Act, 1944, as amended by Central Act 22 of 1973, which defines 'related person' for the purpose of excise duty assessment. The Court ruled that the transactions between the assessee and its wholesale buyers were principal to principal, and the price charged was the sole consideration for the sale, thus rejecting the Revenue's claim for differential duty based on the selling price of the buyers. The Court also directed that costs for furnishing a bank guarantee should be borne by the Revenue when the demand for duty is quashed as unjustified.