1999 (5) TMI 221 - AT - Central Excise

Dispute over assessable value of goods resolved in favor of appellants

HINDUSTAN LEVER LTD. Versus COLLECTOR OF CENTRAL EXCISE, RAIPUR

The appellants were involved in a dispute over the assessable value of goods for Central Excise duty purposes due to a Sales Promotion Scheme. The ... Valuation Issues:Lowering the price of goods in Sales Promotion Scheme; Liability to pay Central Excise duty on reduced assessable value; Evidence of extra consideration influencing price; Applicability of Section 4 of Central Excises and Salt Act, 1944.Analysis:The issue in this case revolves around the allegation that the appellants reduced the value of goods in a Sales Promotion Scheme, leading to a dispute over the assessable value for Central Excise duty purposes. The Commissioner/Collector found that the appellants indeed lowered the assessable value of excisable goods and were liable for duty, regardless of prior price list approvals. The appellants argued that market competition necessitated price reductions, emphasizing that no extra consideration beyond normal prices was received. They cited a previous Tribunal order where it was held that manufacturers are free to set prices but assessable value must comply with Section 4 of the Central Excises and Salt Act, 1944. The Tribunal in that order allowed an appeal due to lack of evidence showing any additional consideration influencing the declared price.The appellants further pointed out a subsequent Tribunal order that upheld the same principle, reinforcing their argument. The Judge noted the absence of evidence demonstrating any flow-back or additional consideration affecting the declared price. After considering submissions and the record, the Judge concurred with the earlier decision's ratio and accepted the appellants' contention. Consequently, the appeal was allowed, granting consequential relief to the party.In summary, the judgment delves into the intricacies of determining assessable value in excisable goods cases, emphasizing the importance of evidence regarding price influences and additional considerations. It underscores the freedom of manufacturers to set prices while highlighting the necessity of complying with statutory provisions such as Section 4 of the Central Excises and Salt Act, 1944. The decision ultimately favored the appellants due to the lack of proof indicating any external factors impacting the declared price, aligning with previous tribunal rulings on similar matters.