TaxTMI 
TaxTMI 
2016 (4) TMI 16
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....e at which the excisable goods were sold from the depots at the time of removal of the goods from the factory. On 22.12.1998, the Central Excise officers HPIU-I, Surat-II, headed by the Superintendent of Central Excise, visited the Assessee's factory premises and found that RG23A Part II register and RG-1 registers were not maintained upto date. The Central Excise Officers had seized several records/documents. They had recorded the statements of various persons of the Assessee Company. During the investigation, it was noticed that there was variation in prices at factory gate and subsequent sales from the depots. 2. A Show Cause Notice dt.04.10.2000 was issued proposing demand of Central Excise duty amounting to Rs. 70,45,270.71 alongwith interest and to impose penalty on the Assessee, for the period from September 1995 to March 1999. It has also proposed to impose penalty on the Director and employees of the Assessee. It has been alleged that the Assessee had contravened the provisions of Section 4 of the Central Excise Act, 1944 read with Rule 5 of Central Excise (Valuation) Rules, 1975 and other rules of erstwhile Central Excise Rules, 1994, in as much as they have not determ....
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....s barred by limitation. There is no irregularity and the penal provision cannot be invoked. The learned Advocate submits that the Adjudicating authority rightly extended the benefit of cum-duty price and dropped the demand of duty on excess transportation charges following the decision of Hon'ble Supreme Court. So, the appeals filed by the Assessee and others are liable to be allowed and the appeal of the Revenue should be dismissed. The Learned Advocate submitted written submission and compilation of case laws. 5. On the other hand, the learned Authorised Representative for the Revenue reiterates the findings of the Adjudicating authority. He submits that it is a clear case of under-valuation of the goods. It is submitted that the Assessee cleared the goods at factory gate at a lower price and charged higher price at their depots. In this context, the learned Authorised Representative drew the attention of the Bench to the Table shown in the impugned order. He further submits that the Assessee is liable to pay duty on the differential amount between the factory gate price and depot price. He further submits that the Assessee had not produced any evidence that they have pass....
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....p; xxxx xxxx (4) For the purpose of this section, - (a) "assessee" means the person who is liable to pay the duty of excise under this Act and includes his agent; (b) "place of removal" means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; or (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed." By section 74 of the Finance (No.2) Act, 1996 (33 of 1996), Section 4 of the Act, 1944 was amended, as under:- "Section 4. Valuation of excisable goods for purposes of charging of duty of excise. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value, shall, subject to the other provisions of this section, be deemed to be (a) the normal price thereof, that is to say, the price at which such goods are ordinarily....
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.... being ascertainable at factory gate and it would be applicable to depot sale. But, after amendment as on 28.08.1996, the "place of removal" included "depots, premises of consignment agents" etc. The effect is that the normal price would be, the price of such goods ordinarily sold by the assessee at depots, at the time of delivery of the goods from factory. Where there is no ex-factory sale and the entire stock transferred to depots even prior to 28.08.1996, the assessable value would be determined on the basis of depot sales price, at the time of clearance of goods at factory. In the present case, as there is no ex-factory sale, the appellant is required to pay duty on the basis of the depot price prevalent, at the time of removal of the goods from the factory. So, the amendment of Section 4 as on 18.9.1996 has no effect in the present case. Thus, in the case where the goods are cleared from the depot, and there is no ex-factory price is available, the assessee is liable to pay duty on the price prevalent in the depot at the time of clearance of the goods from factory. It is well settled by the decisions of the Hon'ble Supreme Court and Tribunal that subsequent to clearance of goo....
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.... Tribunal's view that the duty is chargeable at the rate and price when the commodity is cleared at the factory gate and not on the price reduced at a subsequent date is unexceptionable. Besides as rightly observed by the Tribunal the subsequent fluctuation in the prices of the commodity can have no relevance whatsoever so far as the liability to pay excise duty is concerned. That being so, even if we assume that the roll back in the price of tyres manufactured by the appellant-company was occasioned on account of the directive issued by the Central Government, that by itself, without anything more, would not entitle the appellant to claim a refund on the price differential unless it is shown that there was some agreement in this behalf with the Government and the latter had agreed to refund the excise duty to the extent of the reduced price. That being so, we see no merit in this appeal brought by the assessee and dismiss the same with no order as to costs." b) In the case of Shri Bhagwati SSK Ltd vs CCE., Pune - 2000 (115)ELT(120)(Tri), the assessee was a manufacturer of Sugar. After clearance of goods from the factory, the price of levy sugar was increased by the Go....
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....gate and depot, respectively. Whenever goods are removed from depot, such goods are to be valued with reference to the time when it was removed from the factory". As per this decision, whenever the goods manufactured by the appellants at their factory at Udaipur were removed for subsequent clearances from Mumbai, they have to be assessed at the price prevalent on that date of removal from the factory. Instead of assessing the goods on this basis, the adjudicating authority and the appellate authority resorted to the method of fixing the value of the goods at the time of its actual sale from the depot. This method was clearly against the CBEC Circular and the decision referred to earlier. Consequently, we have no hesitation in holding that the exercise undertaken by the adjudicating authority was contrary to law. The appellate authority, while confirming that order, has not given any legal sanctity to the proceedings resorted to by the adjudicating authority either. In such a situation, the only course that is open to us is to set aside all the orders passed by the adjudicating authority and the appellate authority. Appeals are allowed and the impugned orders are set aside." ....
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....er submitted that after removal of the goods from the factory, the appellant sold the goods from the depot at the price prevailing at the depot, which could either be higher or lower depending upon the market condition. It is noted that the appellant declared the depot sale price as prevalent at the time of clearance of the goods from the factory and paid duty thereon. 11. We find that the appellant rightly paid duty on depot sale price as prevalent at the time of clearance of goods from the factory gate, which is in conformity with provision of Section 4(1)(a) of the Act , 1944 and case laws as referred above. The finding of the Adjudicating Authority that the appellant is required to pay duty on such goods sold from the depot at a higher price over and above price as declared in their declaration, is contrary to provision of Section 4(1)(a) of the Act, 1944 and the case laws. It is not in dispute that the appellant cleared the goods from their factory, at the price prevalent at the depot and therefore, the demand of duty cannot be raised for increase of the price after clearance of the goods from the depot. Thus, the demand of duty cannot be sustained. 12. With regard to de....
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....hat such general concessions are given on such occasions to all customers but it cannot be said that if a special trade discount is given to such an esteemed customer who is a buyer of 90 per cent of goods, it would amount to trade practice which would not be a normal trade practice but would be in any way an impermissible trade practice. In fact such type of concessions are usually given by manufacturers whose goods are lifted by whole-buyers whose availability avoids lot of marketing and advertising costs for the manufacturer and also ensures a guaranteed quantity of sales year after year. In order to keep such a wholesale monopolistic buyer attached to it, if under such circumstances by way of business expediency, the manufacturer offers him a special trade discount, it cannot be said that it is not in accordance with normal practice of wholesale trade. It is not in dispute that Ponds (I) Limited has not refunded such discount on any account. Therefore, it satisfies the requirement of clause (ii) of Section 4(4)(d) of the Act. Learned counsel for the appellant in this connection invited our attention to the decision of the Gujarat High Court in Gujarat State Fertilizers Co. Limi....
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....ferred to the recent decision of the Hon'ble Supreme Court in the case of Purolator India Ltd vs. CCE, New Delhi III - 2015(323)ELT.227(SC). In that case, the Commissioner of Central Excise dropped the duty demand on the issue of cash discount for the period prior to July 2000 and confirmed the demand from July 2000 after introduction of "transaction value", which was upheld by the Tribunal. It is not in dispute that the duty has been demanded in respect of cash discount, which was not actually passed on to the customer. The Hon'ble Supreme Court set aside demand of duty on cash discount issue. The Hon'ble Supreme Court in the case of Purolator India Ltd (supra) held as under : "18. It can be seen that Section 4 as amended introduces the concept of "transaction value" so that on each removal of excisable goods, the "transaction value" of such goods becomes determinable. Whereas previously, the value of such excisable goods was the price at which such goods were ordinarily sold in the course of wholesale trade, post amendment each transaction is looked at by itself. However, "transaction value" as defined in sub-clause (3)(d) of Section 4 has to be read along with the expre....
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.... of Auto Control Pvt. Ltd Vs CCE - 1993 (63) ELT 166 (Tri). It has been held that the freight charges are allowable subject to production of evidence regarding its expenses, and subject to verification. He also relied upon CBEC Manual Part III (Valuation) Para 3.2. It has been clarified that for the period prior to 01.03.2003, exclusion of cost of transportation is allowed only for the actual cost of transportation and only if the Assessee has shown the same separately in the invoice. In the present case, there is no dispute that the Appellant shown the cost of transportation separately in the invoice. Section 4 (2) of the Central Excise Act, 1944 provides where in relation to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price. So, it is clear that the cost of transportation from the place of removal to the place of delivery would be excluded from the price. The contention of the Revenue is that the Appellant has cla....