Excise duty valuation on molasses sold by open auction: strong prima facie case justified stay of recovery pending appeal.

Recovery of the confirmed excise duty demand was stayed pending appeal because the appellant established a strong prima facie case on the assessable value of unreserved molasses sold by open auction. The Tribunal applied the reasoning in Rana Sugar Mills, noting that price minutes from a State-level meeting had no statutory backing and that differential duty could not be sustained unless the Revenue showed realisation of an amount over and above the declared price. As the Revenue did not demonstrate that the State-fixed price had legal force, the stay was granted for the full duty demand during the appeal.

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Issues: Whether recovery of the confirmed excise duty demand should be stayed pending disposal of the appeal on the basis that the appellant had made out a prima facie case on valuation of molasses sold by open auction.

Analysis: The dispute concerned the assessable value of the unreserved quantity of molasses sold in open auction. The Tribunal noted that the earlier decision in Rana Sugar Mills had held that minutes of a State-level meeting fixing price had no statutory backing and that differential duty could not be sustained where no amount over and above the declared price was shown to have been realised. Applying that reasoning, and noting that the Revenue had not shown that the State-fixed price was fixed under any law, the Tribunal found a strong prima facie case in favour of the applicant.

Outcome: Recovery of the entire duty amount was stayed during the pendency of the appeal.

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