Custom, Excise & Service Tax Tribunal
Cce, Chennai I vs M/S. Carborandum Universal Ltd on 12 March, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/1204/2000
(Arising out of Order-in-Appeal No.68/2000 (M I) dated 26.5.2000 passed by the Commissioner of Central Excise (Appeals), Chennai)
For approval and signature:
Honble Mr. P. G. Chacko, Member (Judicial)
Honble Mr. P. Karthikeyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
CCE, Chennai I Appellant
Vs.
M/s. Carborandum Universal Ltd. Respondents
Appearance Dr. Nitish Birdi, SDR for the Appellant Shri R. Raghavan, Advocate, for the Respondent CORAM Honble Mr. P. G. Chacko, Member (J) Honble Mr. P. Karthikeyan, Member (T) Date of Hearing: 12.03.2008 Date of Decision: 12.03.2008 Final Order No. ____________ Per P. G. CHACKO This appeal of the Revenue is against an order of the lower appellate authority setting aside a differential duty demand of Rs.3,48,273/- confirmed against the respondents by the original authority for the period August December 1999. This case involves a valuation dispute. The goods in question were stock-transferred from the factory to depots/dealers at a price discounted to the extent of 17.5% and subsequently sold to industrial consumers who obtained a lesser discount (12.5%). In other words, a higher price was paid by the industrial consumers than that of which duty was paid at factory gate. The above demand of duty was raised on the differential price. In this context, it is also pertinent to note that, where similar goods were removed directly from the factory to industrial consumers, the discount allowed to them was only 12.5%. In the impugned order, learned Commissioner (Appeals) followed his own view taken in his earlier Order-in-Appeal No. 51 53/2000 (M I) dated 12.4.2000 and accordingly held that, once the goods were removed on payment of duty as finally assessed, there would be no warrant to chase the goods from the factory to depot until they were eventually sold and that it would be sufficient if duty had been duly discharged at the time of removal from the factory reckoning their valuation relevant for a particular depot to which the goods were intended. It was found that the assessee had discharged duty in the normal course of trade after determining the value as obtained on the date of removal with reference to the sale price at the depot and, in such a factual situation, it was held that there would be no need to reopen the assessment on a consignment-by-consignment basis. In the result the demand of duty raised by the original authority and the penalty imposed by it were vacated. The present appeal of the department is against this decision of the Commissioner (Appeals).
2. After hearing both sides and considering their submissions, we find that Order-in-Appeal No. 51 53/2000 ibid was upheld by this Tribunal [South Zonal Bench, Bangalore] in Final Order Nos. 1409 1411/2007 dated 10.12.2007 in Appeal Nos. E/951 953/2000, wherein the period of dispute was 28.9.1996 to 31.7.1999. After taking note of the amendments brought to Section 4 of the Central Excise Act with effect from 28.9.96 under Section 74 of the Finance Act, 1996, the Bench held vide paar (5) of the said final order as follows:-
5. On a very careful consideration of the issue, we find that when the goods are stock-transferred from the factory, to the depot, duty is to be paid in terms of Section 4(b) read with Valuation Rules. The time of removal in respect of goods removed from the place of removal shall be deemed to be the time at which such goods are cleared from the factory. When the coated abrasives are removed from the factory to the depot, duty liability has to be discharged and in terms of law value to be adopted is the price prevailing in the depot at the time of clearances from the factory. In terms of the declaration made by the respondents, it is seen that normally 17.5% discount is given to the dealers in respect of the goods purchased from the depot. Moreover, at the time stock-transfer from the factory to the depot, the appellants would not be knowing that a particular item would be sold to an industrial consumer. Further, the percentage of sales to industrial consumer from the depot is very meager only 0.5%. However, as rightly observed by the Commissioner (Appeals) once the goods are cleared from the factory to the depot on payment of duty on the basis of a price prevailing at the depot, at the time of removal from the factory there is no need to chase the goods and to see at what price the same are actually sold. Therefore, he has rightly set aside the orders of the lower authority demanding duty. We do not find any reason to interfere with the orders of the Commissioner (Appeals). Therefore, we dismiss Revenues appeals and uphold the Orders-in-Appeal. The appeals and cross-objections are disposed of in the above terms.
3. The issue involved in the instant case is no different from the one considered by the coordinate Bench. We have no reason to take a different view. Accordingly, the impugned order of the Commissioner (Appeals) is sustained and this appeal of the Revenue is dismissed.
(Dictated and pronounced in open court)
(P. KARTHIKEYAN) (P.G. CHACKO)
Member (T) Member (J)
Rex
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