1991 (9) TMI 221 - AT - Central Excise

Tribunal Upholds Department's Assessable Value Decision, Clarifies Duty Exemption Abatement

The Tribunal upheld the Department's re-determination of assessable value, emphasizing that duty payable after considering the exemption must be abated ... Valuation Issues:1. Interpretation of Exemption Notification No. 198/76 and its impact on assessable value.2. Re-determination of assessable value based on duty abatement.3. Validity of Press Note and Trade Notice in re-determination of assessable value.4. Effect of retrospective amendment to Section 4 of the Central Excises & Salt Act, 1944.5. Applicability of judicial precedents in determining assessable value.Interpretation of Exemption Notification:The appellants availed Exemption Notification No. 198/76, granting a duty exemption of 25% on products manufactured. Despite paying reduced duty post-availing the exemption, they maintained the same price to customers. The Department re-determined the assessable value, leading to higher duty collections. The appellants contended that passing on the exemption benefit to customers was not mandatory under the Notification.Re-determination of Assessable Value:The Department sought to revise the assessable value by considering the benefit of the exemption, resulting in higher duty collections. The appellants filed refund claims for excess duty paid during a specific period, which were rejected by the lower authorities. The main contention was that assessable value should not be re-determined if the benefit of the exemption was not passed on to customers.Validity of Press Note and Trade Notice:The appellants argued that the Press Note and Trade Notice used by the Department lacked legal sanction and were thus invalid. They relied on Delhi High Court decisions to support their position, claiming that they were not obligated to pass on the exemption benefit to customers.Retrospective Amendment to Section 4:The Department relied on a retrospective amendment to Section 4 of the Central Excises & Salt Act, 1944, introduced by the Finance Act, 1982. This amendment clarified that only the effective duty payable by an assessee should be deducted from the cum-duty price for determining the assessable value.Applicability of Judicial Precedents:The Tribunal held that the legal position post the amendment to Section 4 was clear, emphasizing that duty payable after considering the exemption must be abated from the cum-duty price. The Tribunal dismissed the appeal, citing the change in legal position due to the amendment and the precedents supporting the re-determination of assessable value based on the amended provisions. The earlier Delhi High Court judgment and the cited decisions were deemed no longer valid law in light of the legislative changes.