2004 (12) TMI 538

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.... under the provision of Rule 9(2) and 173Q(1) of Central Excise Rules, 1944. 2. The appellants are engaged in the manufacture of Pesticides falling under Chapter 38 of schedule of the Central Excise Tariff Act 1985. During the period relevant for the purpose of the present appeal i.e August 96- May 98, they were clearing their product from their factory gate to their distributors on Stock Transfer Basis. The assessable value for clearance of the said goods was declared on the basis of average price for the previous year inasmuch as the price of the pesticides is highly flexible depending upon the season of the crops and other factors. The appellant adopted the modus operandi of clearing the pesticides on the basis of average price of ....

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....ess at the out set that in such type of situation the appellant should have resorted to the procedure of provisional assessment for which the revenue should have guided them. It is noticed that the entire facts were placed before the jurisdictional Assistant Commissioner by the appellant, as is clear from the letter dated 16-08-1998 written by them. It is clearly mentioned in the said letter that arising out of the peculiar modus operandi, the sale price of the product realised from their customer will be more than what was paid at the time of removal from the factory in bulk and they agree to pay the excess duty arrived out of the differential price between the factory gate removal and the actual sale from the distributor. Admittedly nothi....

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....fferential duty of Rs. 1.62 crores. As such we are of the view that the demand is hit by the bar of limitation. 7. Surprisingly, the Commissioner while accepting the appellant's stand of bona fide, still invokes the longer period of limitation and for imposition of penalty upon them. For better appreciation, we reproduce Paragraph 45 of the impugned order. "45. This is a peculiar case of not knowing the price of the product at the time of clearance of the goods from the factory due to seasonal nature of the business and the price fluctuations depending on the prospect of crop production and the competition in the market. The party had voluntarily come forward to pay the difference in duty on getting the information from the depo....