TaxTMI 
TaxTMI 
2005 (3) TMI 122
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....amely, Dabur, Hamdard, Maaza, Kissan etc. JIL are in the business of manufacturing liquor and food products. 3.By show cause notice dated 30-12-1994, differential duty of Rs. 4.33 crores (approximately) for the period December 1989 till March 1994 was demanded mainly on the ground that the assessee had, with the intention to evade duty, wilfully and deliberately filed incorrect price declarations during the aforestated period; that a deliberate attempt was made to show that an independent market existed in respect of the said bottles by filing price lists in part-I and part-II, when in fact there existed no such market; that the sales under parts I & II were not on principal to principal basis; and that the assessee had filed price lists in the case of supplies to JIL for captive consumption by relying upon the prices charged by the assessee to others, namely, Dabur, Hamdard, Maaza, Kissan etc. knowing fully well that there was a difference between the variety of bottles supplied to JIL and the bottles supplied to Dabur, Hamdard, Maaza, Kissan etc. in terms of shape and size. The assessee was called upon to show cause, under the aforestated circumstances, as to why the department ....
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....e, the prices realized under such sales could form the basis of ascertainable value and, therefore, for this category, the Commissioner held that the Rule 6(b)(ii) was not invokable. 6.Accordingly, applying Rule 6(b)(ii), duty demanded under the show cause notice stood reduced and confined to sales by the assessee to JIL, their franchisees and to M/s. ASA, amounting to Rs. 1,00,33,321.73 by applying Rule 6(b)(ii). 7.Aggrieved by the decision of the Commissioner, the matter was carried in appeal to the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as "the Tribunal)". 8.By impugned decision dated 13-8-1999, the Tribunal held that since comparable goods were available, the department was not entitled to invoke Rule 6(b)(ii). According to the Tribunal, there could not have been the intention to evade duty on the part of the assessee as the assessee was entitled to exemption vide Notification No. 217/86 and as the goods were modvatable. Consequently, the assessee's appeal was allowed by the Tribunal. Hence, this civil appeal. 9.Mr. K. Swamy, learned Counsel appearing on behalf of the department, made the following submissions. According to....
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....art VI(a) represented the correct value of the bottles and, therefore, the valuation in respect of bottles supplied to JIL for captive consumption was correctly done under Rule 6(b)(i). According to the learned Counsel, the department was wrong in coming to the conclusion that the franchisee agreements were dictated; that the terms and conditions of the agreements were not unusual but they were normal in the trade; that the franchisees were independent buyers and the prices charged to them were similar to prices charged to the other independent buyers; that the franchisee agreements between the JIL and the franchisees were in respect of liquor and not for bottles; that M/s. ASA was an independent dealer and, therefore, the prices charged for jugs and jars to JIL were comparable with the prices charged from M/s. ASA; that JIL had bought jars and jugs from other manufacturers also and, therefore, the prices charged from M/s. ASA were comparable with the prices charged by the assessee from JIL in respect of such jars and jugs; that M/s. ASA was not a small trader; that the duty paid on such jars and jugs was modvatable and, therefore, there could not have been any intention to evade d....
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....rrect price declaration. There was no dispute of classification. Therefore, the reliance placed by the Tribunal on the exemption Notification No. 217/86-C.E. as also on the product being modvatable was totally ill-founded. 15.Moreover, the impugned judgment of the Tribunal is perfunctory. It has not given any reason whatsoever for setting aside the detailed order passed by the Commissioner. There is no discussion on any of the aspects like difference in the variety of bottles supplied to JIL vis-a-vis bottles supplied to other buyers like Dabur, Hamdard, Maaza, Kissan etc. There is no discussion on the nature of franchisee agreements. In passing the Tribunal says that the goods were comparable. There is no discussion with regard to the shape and size of the bottles supplied to JIL. There is no discussion as to how the bottles supplied to JIL were comparable to the bottles supplied to the "other buyers", like Dabur, Hamdard, Maaza, Kissan etc. The Tribunal has not even considered the resale of bottles by M/s. ASA to JIL. The Tribunal has not even examined the aspect of under-invoicing of sale prices. As stated above, there were instances of sale price charged to JIL being lower tha....
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....amdard, Maaza, Kissan etc. was in the range of 50 to 92%. Further, even the costing data supplied by the assessee to the department indicated that the bottles supplied to JIL and their franchisees were under-priced as the selling and organizational expenses and bill discounting expenses were not included in the assessable value of the goods and, therefore, such prices were not comparable with prices of the bottles sold to Dabur, Hamdard, Maaza, Kissan etc. The costing done by the assessee itself indicates the price differential and consequently, prices of the bottles sold by the assessee to companies like Dabur, Hamdard, Maaza, Kissan etc. were not comparable with the prices of the bottles captively consumed by the JIL. Further, as found by the Commissioner, the price lists filed by the assessee under part VI(a) were illusory as they were based on sales which did not exist or which were meager. Further, as found by the Commissioner, the price lists under part VI(a) filed by the assessee during 1991-92 had no comparable price lists. Further, all supplies shown under gate passes/invoices in favour of M/s. ASA were actually destined for JIL. Further, as found by the Commissioner, the ....