2011 (4) TMI 906 - AT - Central Excise

Tribunal Upholds Assessment on Depot Sales Under Valuation Rules

NRC Limited Versus Commissioner of Central Excise Thane - I.

NRC Limited Versus Commissioner of Central Excise Thane - I. - TMI Issues:Provisional assessment based on transaction value provisions under Central Excise Valuation Rules, 2000 - Final assessment reviewed by Commissioner of Central Excise - Interpretation of Rule 7 of Valuation Rules - Applicability of 'normal transaction value' for goods sold through depots - Circular issued by CBEC - Submission of relevant details for finalization of assessments - Remand to original adjudicating authority for determination of 'normal transaction value.'Analysis:The appellant, engaged in manufacturing various yarns, sought provisional assessment post the introduction of transaction value provisions under the Central Excise Valuation Rules, 2000. They claimed that due to sales through depots, the ex-factory price was not immediately ascertainable, as different discounts were applied, varying between depots and product types. The final assessments were done based on actual sale prices, with deductions claimed by the assessee and passed on to consumers.The Commissioner of Central Excise reviewed the final assessment order, objecting on two grounds. Firstly, the demand claimed by the assessee was not entirely allowable under Rule 7 of Valuation Rules, 2000, which mandates determining the 'normal transaction value' for goods not sold at the place of removal. Secondly, it was argued that the provisional assessment should have been based on the 'normal transaction value' at the depot during removal, not the eventual sale price from the depot.The Commissioner (Appeals) set aside the original order, considering a circular from the CBEC and the relevant legal provisions. The appellant's counsel contended that the assessments based on actual transaction values were appropriate, while the Departmental Representative supported the impugned order, citing Rule 7 of Valuation Rules.The Tribunal analyzed Rule 7, emphasizing that for goods sold through depots, the assessments must adhere to the 'normal transaction value' provision. As the appellant exclusively sold goods via depots, the assessments had to align with Rule 7, making the impugned order legally sound. Consequently, the matter was remanded to the original adjudicating authority for a reassessment based on the greatest aggregate value, as per the Tribunal's observations.In conclusion, the appeal was rejected, and the case was referred back to the original adjudicating authority for further action in line with the Tribunal's directions.