Customs, Excise and Gold Tribunal - Tamil Nadu
C.C.E. vs Bharat Plywood And Timber Products (P) ... on 24 November, 1997
Equivalent citations: 1999(112)ELT183(TRI-CHENNAI)
ORDER T.P. Nambiar, Member (J)
1. The present appeal is filed by the Department against the orders passed by the ld. Collector (Appeals). In the grounds of appeal, the Department has urged as follows :-
(1) The price list No. 2/87-88 in Part-II was approved by the Assistant Collector of Central Excise, Cannanore Division in respect of contract sales to M/s. Trade Board Sales Agencies, Bombay. The said price list was for the supply of commercial block board and veneered particle board. The price list No. 3/87-88 in Part-II was approved by the Assistant Collector for contract sales to M/s. Plytex, Bombay and it was for the supply of veneered particle board only and not commercial block board. M/s. Bharat plywood & Timber Products (P) Ltd. supplied commercial block board to M/s. Plytex, Bombay at the price as per price list No. 2/87-88 which was for the supply of commercial block board and veneered particle board to M/s. Trade Board Sales Agencies, Bombay only. As the price list No. 3/87-88 in Part-II was only for the sale of veneered particle board and not for the sale of commercial block board to M/s. Plytex, Bombay, M/s. Bharat Plywood & Timber Products (P) Ltd., should have supplied the commercial block board to M/s. Plytex, Bombay only at the part I price.
(2) The Collector (Appeals) has erred in holding that the two price lists in Part-II i.e., price list No. 2/87-88 and 3/87-88 did not show different prices for the same products. The price list No. 2/87-88 was for the supply of commercial block board and veneered particle board, but the price list 3/87-88 was for the supply of veneered particle board only. Hence, it is clear that the said two price lists do not cover the same goods.
(3) The Collector of Central Excise (Appeals) has erred in holding that no reason was available for ignoring the approved Part-II price list and demanding duty based on part-I price list. As price list No. 3/87-88 in Part-II was only for the supply of veneered particle board, supply of commercial block board to M/s. Plytex, Bombay should have been effected under the Part-I price only. The price list No. 2/87-88 in Part-II was only for sale of goods to M/s. Trade Board Sales Agencies, Bombay. Hence the differential duty demanded by Assistant Collector of Central Excise, is valid in law. Moreover, the two firms M/s. Trade Board Sales Agencies, Bombay and M/s. Plytex, Bombay are different firms having different Managing Directors and different price list 2/87-88 and 3/87-88 were approved based on separate contracts. Hence it is not correct to hold that the said price lists are for the same class of buyers. The penalty imposed in the order in original is only Rs. 500/- and it is reasonable in the circumstances of the case.
2. The respondents are absent and stated that the matter may be decided on merits.
3. In the impugned order, the ld. Collector (Appeals) held as follows :-
"I have gone through the submissions made in the grounds of appeal as well as the impugned order. The Assistant Collector admitted that appellant had filed two price lists for the two so called sister concerns in Bombay. The duty demand is ordered by ignoring the price list, in part II and calculating the duty on the Part I price list of the appellants. No reason is available for ignoring the approved part II price lists. The two price lists in Part II does not show different prices for the same products. There is no provision in section 4 (i) (a) (ii) of the act, that a contract for a specified quantity must be in existence for availing part II price by an assessee. The Assistant Collector has approved the part II price lists and there is no difference in class of buyers, in the two customers. In view thereof, the differential duty demanded, based upon Part I price is not maintainable and the same is set aside.
There is no reason for imposition of penalty at all. The appeal is therefore allowed."
4. The ld. JDR Shri Rama Rao in this connection pointed out that the Asst. Collector has clearly stated that at the time when the goods were removed it was not known as to where the goods will be going. This particular finding of the ld. Asst. Collector was not dealt with by the ld. Collector (Appeals). He, therefore, stated that the ld. Collector (Appeals) has merely stated with respect to price list. But the aspect that when the goods were removed it was not known as to where the goods were going and therefore that has to be dealt with is the one which stated in the orders passed by the ld. Asst. Collector. In this connection, he relied on the decision reported in 1997 (20) RLT 658 in the case of IDL Chemicals Ltd. v. C.C.E.
5. We have considered the submissions. In the above cited decision, at para-9 the Hon'ble Supreme Court has held as under :-
"9. We are of the view, the contention of the respondent must be upheld. The assessee has failed to make any declaration as to the price of the goods despatched by it to its various agents outside the State. At the point of item of removal of the goods, the assessee was not in a position to say that the goods were meant to be sold to Coal India or any other Government undertaking. The duty had to be calculated at the point of time of removal of the goods. At that point of time, the only way the duty could be levied was by calculating the duty on the basis of sales made to independent customers and not a special customer like Coal India. Even if ultimately and at a much later date from the date of removal of the goods, the appellant sold the goods to a Government Company or to Coal India Limited, the liability to pay duty at the time of removal of goods from the place of manufacture will not be altered. Rule 9A of the Central Excise Rules lays down that no excisable goods shall be removed from any place of manufacture until the excise duty leviable thereon has been paid. Rule 9A also lays down that the rate of duty shall be the rate in force on the date of actual removal of goods from the factory. There is a special rule for warehousing the goods which does not apply to this case. The appellant did not file any price list in connection with these goods which were being sent to the consignment agents. The assessee was unable to make any statement that the goods were meant for sale to Coal India Limited or for any Government Company. The Excise Officer was right in calculating the price which would have been payable by an ordinary customer as the "normal price" of these goods."
6. Applying the above principles to the facts of this case, it is seen that when the goods are removed, the sale price at the factory gate will be the normal price. But at the time of removal, it was not known as to where it was being removed for a particular class of buyer. In the absence of such knowledge, the price has to be calculated as if the goods have been removed from the factory gate for sale in the open market. These are the principles laid down by the Hon'ble Supreme Court in the above cited decision and the same applies to the facts of this case. This being the position, the impugned order is set aside and the order passed by the ld. Asst. Collector is upheld and the appeal of the Revenue is accordingly allowed.