2006 (12) TMI 295 - AT - Central Excise

Tribunal rules in favor of applicant on sustainable duty demand, cites Circular 354/81/2000-TRU

The Tribunal ruled in favor of the applicant, deeming the duty demand and penalty unsustainable. The valuation of goods transferred from depots to dealers ... Stay/Dispensation of pre-deposit - Demand Issues:1. Duty demand based on valuation of goods transferred from depots to dealers.2. Interpretation of Circular No. 354/81/2000-TRU for valuation of goods.3. Previous Tribunal's stay order on a similar dispute.Analysis:1. The judgment dealt with a duty demand of over Rs. 16 lakhs arising from the valuation of goods transferred from the applicant's depots to dealers or consignment agents. The Tribunal considered the contention that the valuation should be based on the sale prices at the depots on the date of removal from the factory, regardless of subsequent disposal.2. The applicant's Counsel relied on Circular No. 354/81/2000-TRU, dated 30-6-2000, which clarified that the assessable value of goods transferred to depots should be based on the normal transaction value at the depot. The Tribunal noted that since the applicant made sales to independent buyers from the depots, all goods transferred to a specific depot should be assessed based on the sale price to independent buyers at that depot. Consequently, the duty demand and penalty were deemed unsustainable.3. The Tribunal referenced a previous dispute between the parties where a stay was granted by the Tribunal until the appeal was disposed of. In line with the previous order, the Tribunal allowed the stay application in this case as well, halting recovery until the appeal's resolution. The matter was scheduled for regular hearing, and the stay application was disposed of accordingly.This judgment highlights the importance of correctly valuing goods transferred from depots to dealers, emphasizing the relevance of Circulars issued by the Board in interpreting valuation rules. The Tribunal's decision to grant a stay aligns with previous rulings on similar disputes, ensuring fairness and due process in the legal proceedings.