Approved factory gate price and limitation in depot clearances remained open, with only a prima facie partial waiver granted.

Approved factory gate price was recognised as a relevant basis for duty assessment, but its application to clearances through depots and stockyards was left open for fuller examination at the appeal hearing. Allegations of suppression and invocation of the extended period also prevented a conclusive finding on limitation, although the record disclosed a prima facie case that part of the demand could be time-barred where depot sales and depot operation expenses had been disclosed in invoices. Interim relief was therefore granted only partly, with a deposit directed and the balance demand and penalty stayed on compliance.

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Issues: (i) whether, for a prima facie view in the stay application, the approved factory gate price could govern clearances to depots and stockyards; and (ii) whether the demand appeared to be time-barred in part in view of the allegation of suppression and the invocation of the extended period.

Issue (i): whether, for a prima facie view in the stay application, the approved factory gate price could govern clearances to depots and stockyards.

Analysis: The established principle that an approved factory gate price can govern duty assessment was recognised, but the distinction urged between sales at the factory gate and sales through depots to different classes of buyers was not treated as having been finally resolved in the existing authorities. The issue was considered to require detailed examination at the hearing of the appeal.

Conclusion: The point was left open for final hearing and no conclusive finding was recorded at the stay stage.

Issue (ii): whether the demand appeared to be time-barred in part in view of the allegation of suppression and the invocation of the extended period.

Analysis: The show cause notice contained allegations of suppression with intent to evade duty. At the same time, the record indicated that depot sales and, at least from 1-4-1994, the charging of depot operation expenses were disclosed in invoices, making a prima facie case that the demand for a later period could be barred by limitation. On the materials then available, the allegation of suppression could not be negated at that stage in respect of the entire period.

Conclusion: A prima facie case of limitation was found only for part of the demand, while the extended period issue remained open for final adjudication.

Final Conclusion: Interim relief was granted only partially, with deposit of Rs. 1 crore directed and the balance demand and penalty stayed upon compliance.

Ratio Decidendi: In a stay application, the Tribunal may grant partial waiver where the merits require fuller examination and the record discloses only a prima facie case of limitation for part of the demand.

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