TaxTMI 
TaxTMI 
2022 (5) TMI 1244
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....s Revenue had filed appeal E/901/2008 on the subject. So, Revenue moved an application in January 2010 and the order dated 3 December 2009 was recalled on 12 June 2012. 2. Thereafter, on 14 July 2016, Revenue's appeal was dismissed relying upon the findings of the order dated 3 December 2009 (which was already recalled by the Tribunal on 12 June 2012). Revenue appealed to Supreme Court against this order date 14 July 2016 in Civil Appeal No(s) 6209-6212 of 2018. These appeals were allowed by Supreme Court on 1 August 2019 and both these appeals were restored to the file of the CESTAT for disposal afresh clarifying that all rights and contentions of the parties on merits were kept open. Hence these appeals are now listed before us. 3. We have heard learned counsel for the assessee and the learned authorised representative of the Revenue and perused the records. Since the matter pertains to 1991 to 1995 and there have been changes in the law since that period, we proceed to discuss the relevant legal provisions. 4. Duties of excise are levied and collected on excisable goods manufactured or produced in India under Section 3 of the Central Excise Act, 1944 [....
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....of such goods in relation to each such class of buyers; (ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in clause (iiill) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof; (iii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail; (b) where the normal price of such goods is not ascertainable for the reason that such goods a....
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....le on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale. Explanation.- For the purposes of this sub- clause, the amount of the duty of excise payable on any excisable goods shall be the sum total of- (a) the effective duty of excise payable on such goods under this Act; and (b) the aggregate of the effective duties of excise payable under other Central Acts, if any, providing for the levy of duties of excise on such goods, and the effective duty of excise on such goods under each Act referred to in clause (a) or clause (b) shall be,- (i) in a case where a notification or order providing for any exemption (not being an exemption for giving credit with respect to, or reduction of duty of excise under such Act on such goods equal to, any duty of excise under such Act, or the additional duty under section 3 of the Customs Tariff Act, 1975 , (51 of 1975 ) already paid on the raw material or component parts used in the production or manufacture of such, goods) from the duty of excise under such Act is for the ti....
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....move from his factory any non-excisable goods not mentioned in that declaration, or (c) a change in the rate or rates of duty in respect of the goods mentioned in that declaration or, by reason of any amendment to the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), a change in the Chapter, heading No. or sub- heading No. the assessee shall likewise file a fresh declaration or an amendment of the declaration already filed within thirty days of any alteration mentioned above, in the same manner as is provided in sub-rule (1). (3) The proper officer, duly empowered by the Central Government under section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration filed under sub-rule (1) by an assessee,- (a) require any person to produce or deliver any document or thing relevant to the enquiry; and (b) examine any person acquainted with the facts and circumstances of the particulars given in the declaration or other records, in the manner provided in section 14 of the Act. (4) The proper officer may after such further enquiry as he may con....
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....er of Central Excise may specify. (2) The assessee shall certify in each such document that the amount indicated in such document represents the price actually charged by him and that there is no additional consideration flowing directly or indirectly from such sales over and above what has been declared. (2A) Every assessee who produces, manufactures or warehouses goods notified under Section 4A of the Act shall file with the proper officer a declaration in such form and in such manner and at such interval as the Central Board of Excise and Customs may specify, declaring the retail sale price of such goods, amount of abatement, if any on such sale price and such other particulars as may be specified by the said Board. (3) The proper officer, duly empowered by the Central Government under section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration made in the documents referred to in sub-rule (1) or sub-rule (2A) by an assessee,- (a) require any person to produce or deliver any document or thing relevant to the enquiry ; and (b) examine any person....
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....ong or incorrect particulars in the invoice issued for the excisable goods dealt by him with intent to facilitate the buyer to avail of credit of the duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of such goods which is not permissible under these rules; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the manufacturer, producer, registered person of a warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (bb) or clause (c) or clause (d) has been committed, or ten thousand rupees, whichever is greater. then, all such goods shall be liable to confiscation and the manufacturer, producer, registered person of a warehouse or a regist....
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.... also proposing to impose a penalty under Rule 173Q of the Excise Rules. It culminated in the Order in Original dated 29.12.1997 being passed by the Commissioner. Another order in original dated 29.5.1998 was passed by the Assistant Commissioner which was upheld by the Commissioner (Appeals) by his order dated 31.12.2003. Assessee's appeals against both these orders were decided by this Tribunal by Final Order No. 1135/06 dated 4.7.2006 remanding the matter to the Commissioner as follows: 7. We have gone through the records of the case carefully. The appellants have pleaded that the lower authorities had come to the conclusion that there is no factory gate price even though sufficient information was furnished. It was stated that goods were sold at the factory gate price not only to Government bodies but to other dealers also. There is also a grievance that the request for abatement on account of interest on receivables'has not been considered. In these circumstances, the entire issue has to be remanded to the original authority who should quantify the duty liability afresh after giving a personal hearing to the appellants. The appellants shal....
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....y genuine factory gate sales that satisfy the norms prescribed in Section 4(1)(a) of the Act. 7.2. Clause (a) of sub-section (1) of Section 4 of the Central Excise Act, 1944. stipulates that a price, in order to be acceptable as assessable value under the said clause, shall satisfy the following conditions - (a) It should be the price at which such goods are ordinarily sold by the assessee to their buyers in the course of wholesale trade. (b) The sale should be for delivery at the time and place of removal (c) The buyer should not be a related person (d) The price shall be the sole consideration for the sale Further, proviso (i) to the said clause stipulates that if such goods are sold at different prices to different classes of buyers, each such price shall, subject to the existence of the other circumstances specified above, be deemed to be the normal price of such goods in relation to each such class of buyers. 7.3 During investigation, various personnel of M/s BHL have deposed in their statements, given under section 14 of the Act, as follows - 7.3.1. Shri P.AnandSagar, D....
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....t price" at the factory gate and that the goods are mostly sold through their Depots. M/s Jaipur and Bikaneer Trading Co is one such buyer to whom the goods have been supplied at a "negotiated contract price". Therefore, it appears that M/s Jaipur and Bikaneer Trading Company, being a contractual buyer, constitutes a class by itself and the price charged from such buyer is applicable to them only as per proviso (i) to section 4(1)(a) referred above, and such price cannot be adopted for the goods sold to other buyers at Depots, who constitute a different class of buyers. 7.4.3 To support their claim that a genuine factory gate sale price existed, the assessee have also stated that they have effected clearances from the factory gate to Public Sector / Government Undertakings. In this regard, it is submitted that sales to Public Sector/Government Undertakings can be considered as normal price only in respect of such class of buyers in terms of first proviso to Section 4(1) (a). 7.4.4 Hon'ble Supreme Court, in the case of Government of India Vs Madras Rubber Factory, reported in 1995 (77) ELT 433 (S.C), has held that - "by virtue of proviso (1) to Sect....
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....ots. Thus, following the ratio of the decisions of the Tribunal in the aforesaid cases, the ex-factory price claimed by the assessee is liable to be rejected. However, in his Order, the Commissioner has arrived at an incorrect finding that the ex-factory price is acceptable. 7.8. Even though the assessee has contended that Depot prices are not relevant for determination of the assessable value of the goods since they have an established factory gate price, the fact remains that they have collected and have received amounts in the guise of Delivery Charges. When the department sought to determine value on the basis of Depot Price, they came up with an alternative plea that abatements on account of ten different factors mentioned in para 6 above, are available to them. On examination of this plea, it was found that out of ten factors, abatement on account of seven factors i.e, sl. no. (i) to (vii) was admissible and that on account of the remaining three, i.e. sl no. (viii) to (x), abatement is not admissible and duty is payable. 7.9. Thus, all the facts of the case and the evidence brought forth in the show cause notice implied that there did not exist ....
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....he total sales is irrelevant. For instance, even if only 1% of the goods are sold as per the value under section 4(1) (a), such price shall be deemed to be the value for all clearances by the assessee. The value under section 4(1) (a) and its proviso is subject to the following conditions: a) that it is in the course of wholesale trade; b) it is at the time and place of removal, i.e., at the factory gate; c) to persons who are not related; d) where price is the sole consideration for sale; e) if the goods are not sold except to or through a related person, then the price at which the related person sells the goods shall be the normal price; f) if the goods are sold to different classes of buyers at different prices, then each such price shall be the value for sales to such class of buyers; for instance, if there are industrial consumers, OE manufacturers, wholesalers, etc., each of which can be a class of buyers; and g) for the purpose of this section, any sale other than retail is considered wholesale trade. 10. Thus, a shrewd assessee can sell a small quantity of the ....
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....994 e) a) Ex-factory dispatches of decorative laminates for April 1994 to March 1995 14. Each of these ledgers covers a very large number of buyers to whom the assessee sold goods at factory gate. These details have been summarised by the learned counsel in her written submissions as follows: Buyer group 1990-91 1991-92 1992-93 1993-94 1994-95 Dealers 78 66 69 83 56 Actual user companies 5 5 4 1 3 PSUs 8 2 2 1 2 Total buyers other than employees 91 73 75 85 61 15. Therefore, the entire argument of the Revenue in its appeal that the goods were sold from the factory gate to only four categories of persons viz., Public Sector Undertakings, M/s. Jaipur and Bikaner Trading Co., individuals and company employees is not borne out by the ledgers produced before us by the assessee. The evidence on the basis of which the Revenue relies are the statements of the employees said to have been recorded during investigation. When details of actual sales in the form of ledgers are presented before us by the assessee, even if statements of employees contrary to the av....