2013 (11) TMI 1211 - AT - Central Excise

Tribunal rules transaction not a sale, sets payment due to waive remaining dues

The Tribunal determined that the transaction between the parties did not constitute a sale, and the price difference with independent buyers was not a ... Determination of assessable value – Waiver of Pre-deposit – Held that:- Prima-facie, the Commissioner has categorically recorded as to how the transaction between the applicant and M/s TATA cannot be treated as a ‘sale’ - the Commissioner had recorded his findings to the notice for determination of assessable value of silico manganese under Rule 8/10A of the Central Excise (Valuation) Rules, 2000, the correctness of which, would be considered at the time of final disposal of the appeal - the price at which the goods were sold to the independent buyers claimed to be at a higher price than the price of the converted goods cleared to M/s TATA for captive consumption has not been an issue before the lower authorities, being not canvassed - The applicant failed to make out a prima-facie case for total waiver of pre-deposit of dues – Relying upon Commr. of Central Excise, Guntur Vs. Shri Chaitanya Educational Committee [2011 (1) TMI 356 - HIGH COURT ANDHRA PRADESH] - the applicant to deposit an amount of Rupees fifteen lakhs as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted. Issues:1. Waiver of predeposit of duty and penalty under Section 11AC of the Central Excise Act, 1944.Analysis:The issue in this case pertains to the determination of the assessable value of silico manganese supplied to a company over a specific period. The applicant contended that they were discharging duty based on conversion cost and raw materials supplied by the company receiving the goods. The disagreement arose regarding the valuation method of the converted goods consumed by the company, with the Department alleging that the value should be determined under specific rules. The applicant argued that they sold the goods to independent buyers at a higher price than to the company, questioning the basis of the demand. However, the Department's position was that the assessable value should be determined differently. The Tribunal found that the transaction between the parties could not be considered a sale, and the price at which goods were sold to independent buyers was not a raised issue before. Despite the applicant's financial hardship and prior deposit, the Tribunal directed a specific amount to be deposited within a timeframe to waive the remaining dues and stay recovery during the appeal process.The key contention revolved around the determination of the assessable value of the goods supplied, with the Department seeking to apply specific valuation rules. The Tribunal noted the arguments presented by both parties, emphasizing that the transaction did not constitute a sale and the price differential with independent buyers was not a relevant point raised earlier. Despite acknowledging the financial challenges faced by the applicant and the amount already deposited, the Tribunal directed a specific sum to be paid within a stipulated period to waive the remaining dues and stay recovery during the appeal process.