1998 (3) TMI 265 - AT - Central Excise

Tribunal allows deposit extension, considers reducing demand amount, emphasizes review of value increase & depot prices

CENTURY LAMINATING CO. LTD. Versus COMMISSIONER OF C. EX., MEERUT

CENTURY LAMINATING CO. LTD. Versus COMMISSIONER OF C. EX., MEERUT - 1998 (101) E.L.T. 88 (Tribunal) Issues:1. Confirmation of duty demand and penalties by the Commissioner of Central Excise.2. Inclusion of commission in assessable value and determination of factory gate prices.3. Discrepancies in pricing and collection of amounts above factory gate prices.4. Arguments regarding the assessment of value and deductions.5. Consideration of evidence and contentions for reducing the demand amount.Analysis:The judgment involves an appeal by M/s. Century Laminating Co. Ltd., its directors, staff members, and a commission agent against the confirmation of duty demand, penalties, and confiscation of assets by the Commissioner of Central Excise. The Commissioner found discrepancies in pricing, including the collection of excess amounts above factory gate prices. It was revealed that the assessable value of goods was based on depot prices due to alleged manipulation of factory gate prices. The Commissioner also noted missing invoices and directed a substantial demand of Rs. 8,16,85,476.22.The appellant argued that certain evidence, like statements of wholesale dealers and slips from the Delhi Depot, did not conclusively prove all factory gate sales were at higher prices. They contested the method of determining assessable value, highlighting the difference in percentages between factory gate and depot prices. The appellant also questioned the Commissioner's decision to enhance the value by 10% annually and the failure to allow post-manufacturing deductions if depot prices were to be considered.The Respondent, represented by Shri Sharma, countered the appellant's arguments by presenting additional evidence from Ludhiana Depot, circulars, diaries, and files to support the claim of collecting amounts above factory gate prices. They emphasized the reasonableness of the 10% increase in value annually and the necessity of considering actual expenses and taxes in depot prices.Upon review, the Tribunal acknowledged the need for further examination of the contentions raised, particularly regarding the 10% annual increase in value and deductions related to depot prices. The Tribunal expressed a prima facie satisfaction that a proper reconsideration could significantly reduce the demand amount. Consequently, the Tribunal directed the assessee to deposit a specified sum towards the demand and penalties within a designated period, with a possibility of waiving the pre-deposit requirement for the remaining amount pending further proceedings.In conclusion, the judgment addresses the complex issues surrounding the determination of assessable value, discrepancies in pricing practices, and the need for a thorough review of evidence and contentions to ensure a fair resolution of the dispute.