Customs, Excise and Gold Tribunal - Delhi
Kisan Sahkari Chinni Mills Ltd. vs Commissioner Of C. Ex. on 2 February, 2005
Equivalent citations: 2005(100)ECC446, 2005(183)ELT263(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In these two appeals filed by M/s. Kisan Sahkari Chinni Mills Ltd., the issue involved relates to determination of the assessable value of Ethyl Alcohol Denatured under Section 4 of the Central Excise Act.
2. Shri Vikrant Kackria, learned Advocate submitted that the Appellants are member of U.P. Co-operative Sugar Factories Federation; that they had cleared the impugned goods to M/s. Vam Organic Chemicals Ltd. at the rate of Rs. 11.28 per B.L.; that the Commissioner, under the impugned Order had, enhanced the assessable value to Rs. 20.30 per B. L., the rate at which M/s. Oudh Sugar Ltd. had sold ethyl alcohol denatured during the material period; that the Adjudicating Authority has not given any reason for not considering the price charged by them to be the normal price under Section 4(1)(a) of the Central Excise Act; that merely because the prices are fixed by the Federation, it cannot be a ground to allege that the price charged by them is not the normal price; that their customers Vam Organic Chemicals are not their related person and as such the price at which the goods have been sold to them has to be taken for assessment purpose; that the Commissioner has given the finding that M/s. Vam Organic Chemicals are special and favoured buyer which is wrong as there was no such allegation in the show cause notice; that further they had sold the quantity of 3,57,000 litres, whereas M/s. Oudh Sugar had sold only a small quantity of 20,000 litres. He relied upon the decision of the Tribunal in the case of Morinda Co-Operative Sugar Mills v. CCE, Chandigarh [2001 (132) E.L.T. 27 (Tri)] wherein it has been held that the price of comparable goods is applicable only if the sale is not to an independent buyer and price is not the only consideration for sale. Reliance has also been placed on the decision in the case of Anjala Co-Operative Sugar Mills v. CCE, Chandigarh-II [2001 (135) E.L.T. 1290 (Tri)] and Shri Gajanan SSK Ltd. v. CCE, Aurangabad [2002 (140) E.L.T. 392 (Tri)].
3. Countering the arguments Shri S.C. Pushkarna, learned Departmental Representative, reiterated the findings as contained in the impugned order and submitted that the Federation being the Coordinating body could compel its units to follow the conditions issued by it; that thus the price shown and fixed by the Federation is not the price negotiated by the Appellants and the buyers but it was an arrangement between the Federation and the Buyer; that thus it was not in independent sale between buyer and the seller; that no explanation has also been offered by the Appellants as to in how another unit of the Federation had sold the identical product to independent buyer at a much higher rate during the same period; that as the price at which the Appellants had sold the goods is not a genuine price the assessable value has to be determined by following the provisions of the Central Excise (Valuation) Rules, 1975.
4. We have considered the submissions of both the sides. At the relevant time, Section 4 of the Central Excise Act, before its amendment provided that the value of the excisable goods shall be deemed to be the normal price of the goods, i.e. to say the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale. It has not been disputed by the Revenue that the Appellants has sold the impugned goods at the rate of Rs. 11.28 per BL at the time and place of removal. There is no material brought on record to show that the price is not the sole consideration for sale of ethyl alcohol denatured by the Appellants to M/s. Vam Organics Chemicals Ltd. Further, there is no material on record to show that M/s. Vam Organics Chemicals are related person as per the definition of related person given in Section 4(4)(c) of the Central Excise Act. Once the price is the sole consideration and the buyer is not a related person of the assessee, the provisions of Section 4(1)(a) will be applicable and resort cannot be made to the provisions of Section 4(1)(b) of the Central Excise Act for determining the assessable value. We, therefore, find no merit in the impugned orders which is set aside and the appeals are allowed.