2008 (1) TMI 76

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....s. They have adopted lower prices for clearance to their various depots for the same goods compared to the prices at which they were available at the factory gate. Sixteen show cause notices were issued proposing differential duty of Rs.2,76,43,950/-; the demands related to the period from November 1994 to September 1999 and were proposed by adopting the highest price available at factory gate during the month/quarter for the relevant period. b. The Original Authority held that the buyers who purchased at factory gate were those who entered into agreements/contracts with the assessee and constituted a separate class of buyers and therefore the contract price entered into with these buyers cannot be made applicable to sale through depots.....

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....is in appeal against the said order. 4. Ld. Jt. CDR relies on the judgements of the Hon'ble Supreme Court in the case of CCE, Allahabad v. M/s. Somaiya Organics India Ltd. [2007 (218) E.L.T. 321 (S.C.) = 2007-TIOL-198-S.C.-CX] and in the case of M/s. Ashok Leyland Ltd. v. CCE, Madras [2002 (146) E.L.T. 503 (S.C.)]. 5. It was submitted that for the period prior to 28-9-1996, the assessment of goods on inter unit transfer are required to be carried out in a similar fashion as held for depots when the concept of normal price with reference to a particular class of buyer was invoked. In other words, the principle adopted by the Commissioner (Appeals) in respect of goods sold from depots prior to 28-9-1996 should have been applied to asses....

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.... in respect of goods cleared by the appellant to other units is not correct and the OIO in this regard is set aside. In this regard, Hon'ble Supreme Court has also made a similar observation in case of Ashok Leyland Ltd. v. Collr. of C. Ex., Madras reported at 2002(146) E.L.T. 503 (S.C.)." 7. For the period prior to 28-9-1996, the valuation requires to be done on the basis of price at factory gate as depot has not been specified as a place of removal. Admittedly at the factory gate there have been sales to independent buyers under contract. The term inter unit transfer in respect of transaction between the assessee and the other units in their group is misleading. The transaction is one of sale. When there is a sale, the sale price can b....