Customs, Excise and Gold Tribunal - Delhi
Dharampal Satyapal Ltd. vs Commissioner Of C. Ex. on 26 November, 1997
Equivalent citations: 1998(97)ELT63(TRI-DEL)
ORDER
U.L. Bhat, J. (President)
1. Having filed the appeal against the order passed by the Commissioner of Central Excise, Meerut confirming the demand of duty Rs. 31,56,421/- for the period April, 1993 to March, 1995 and imposing penalty of Rs. 20 lacs, the appellant has filed this application seeking waiver of the requirement of pre-deposit under Section 35F of the Central Excise Act, 1944. We have heard both sides.
2. Appellant, engaged in the manufacture of Branded Pan Masala, was filing price lists from time to time claiming deduction of cash discount and on provisional approval of the price lists, clearing the goods on payment of appropriate duty. Show cause notice dated 26-9-1995 was issued alleging that the cash discount was not made known to the trade and, in fact, not given also and therefore there was suppression of true assessable value with intent to evade duty and proposing demand of differential duty and also proposing imposition of penalty. Though the appellant resisted the notice, the Commissioner passed the impugned order confirming the demand and imposing penalty as aforesaid.
3. Shri Swaminathan, appearing for the appellant stated that waiver of requirement of pre-deposit is sought only regarding a part of the confirmed demand. He stated that even assuming that the finding in regard to cash discount is sustainable (which is to be argued in the appeal) the Commissioner erred in ignoring the provisions of 4(4)(d)(ii) of the Act while determining the differential assessable value. The total cash discount on which the appellant failed to pay duty was Rs. 32,82,155/- (at 45% duty) and Rs. 33,58,902/- (at 50% duty). This, it is pointed out, is to be treated as cum duty price and in terms of Section 4(4)(d)(ii), the duty element has to be deducted in order to arrive at the assessable value. If this exercise is carried out, the demand will come down to Rs. 21,38,234/-. It is also prayed that the appellant may be allowed to pay the amount by way of adjustment in RG 23A (Modvat credit). Shri M. Ali, JDR did not dispute that Section 4(4)(d)(ii) of the Act has to be taken into consideration in determining the assessable value. We are prima facie satisfied that there is an error in the calculation of the assessable value and consequently in the quantification of differential duty. We therefor direct the waiver of the requirement of pre-deposit of Rs. 10,18,187/- and the penalty amount and direct the appellant to pay Rs. 21,38,234/- out of any valid Modvat credit available and if not to deposit the amount within two months from today and report compliance.
4. For compliance report call on 4-2-1998.