Custom, Excise & Service Tax Tribunal
Venus Sugar Ltd vs C.C.E. Meerut Ii on 24 December, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
R.K. PURAM, WEST BLOCK NO. 2, NEW DELHI-110066
COURT NO. III
DATE OF HEARING: 24/12/2014
Appeal No. E/1501/2006-EX [DB]
[Arising out of Order-in-Appeal no. 11-CE/MRT-II/2006 dated 31.1.2006 passed by the CCE (Appeals) Meerut II, Mangal Pandey Nagar, Meerut]
1.
Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
Venus Sugar Ltd. Appellant
Vs.
C.C.E. Meerut II Respondent
Appearance:
None for the appellant Sh. M.S. Negi, ld. DR for the respondent.
Coram: Honble Mr. Rakesh Kumar, Member Technical) Honble Mr. S.K. Mohanty, Member (Judicial) Per: Honble Mr. Rakesh Kumar, Member (Technical) Final Order No. 54960/2014
1. The appellant is a manufacture of sugar chargeable to Central Excise duty. The period of dispute in this case is from March, 1996 to August, 1996. During this period, the appellant cleared 67,585.658 tones of molasses to various buyers at the price of Rs. 10 per metric tonne and paid duty on that price. The departments allegation is that the prevailing price of the molasses during that period was Rs. 100 per metric tone and therefore, the duty should have been paid on this price and it is on this basis that show cause notice dated 11/9/1996 was issued to the appellant for demand of different duty of Rs. 1,21,626/- and imposition of penalty on them. The show cause notice was adjudicated by the Deputy Commissioner vide Order-in-Original dated18/10/2005 by which the above mentioned duty demand was confirmed against the appellant and besides this, penalty of Rs. 50,000/- was imposed on them under Rule 173Q. In course of the proceedings before the Deputy Commissioner, appellant pleaded that the production, storage and sale of molasses is completely controlled by the UP Government under UP Sheera Niyanatran Adhiniyam 1964 under which the Excise Commissioner, UP is the controller of the molasses who exercises complete control over the production, storage and sale price of the molasses; that the molasses sold by the appellant was of second quality and the same was sold by them on fully commercial basis and the sale of molasses at the price of Rs.10 per MT had been intimated to the State Excise Commissioner, but this plea was not accepted.
2. On appeal being filed to the Commissioner (appeals) against this order of the Deputy Commissioner, the Commissioner (appeal) vide order-in-appeal dated 3/1/2006 dismissed the appeal. Against this order of the Commissioner (appeals), the appeal has been filed.
3. None appeared for the appellant. Since the notice for hearing on 24/12/2014 had been sent to the appellant on 21/11/2014 by Registered AD and in spite of this, none representing the appellant appeared, in terms of Rule 21 of the CESTAT Procedure Rules, 1982, the matter is being decided ex-parte.
4. Heard Shri M.S. Negi, ld. DR who defended the impugned order by reiterating the findings of the Commissioner (appeals) and pleaded that there is no justification for sale of the molasses at Rs. 10 per metric tonne when the prevailing price of the molasses was Rs. 100 per metric tonne. He also pleaded that the appellant did not produce any evidence regarding the molasses sold being of second quality. He therefore, pleaded that there is no infirmity with the impugned order.
5. We have considered the submissions of the DR and have gone through the record of this case.
6. The basis of duty demand is that when the prevailing price of the molasses was at Rs. 100 per metric tone, the appellant have sold the molasses at much reduced price of Rs. 10 per metric tonne and have paid duty on this basis for which there is no justification. We find that it is not disputed that during the period of dispute there was control of the State Excise Authorities over the production storage and sale of molasses and that sale of molasses, in question, at reduced price was under intimation to the State Excise Commissioner. It is seen that in the sale invoices of the molasses, the same has been mentioned as of second grade. We also find that the Tribunal in the case of Morinda Co-op Sugar Mills Vs. CCE-Chandigarh reported in 2001 (132) ELT 27 (Tri-Delhi) has held that the price of comparable goods would be applicable only if the sale was not to an independent buyer and the price was not only consideration for sale. In this case, there is neither allegation nor there is any evidence that the sale of the molasses was not to independent buyers and that the price was not the sole consideration of sale. When it is not disputed that the sale was to independent buyers and price was the only consideration for sale and was not influenced by any other consideration, in our view, there would be no justification for rejecting the sale price and adopting the comparable price at which the molasses was being sold by other manufacturers as the assessable value. Moreover, when the sale invoices show the molasses sold on of second quality, if the Department alleges that it was of first quality, and therefore, must have been sold at much higher price, it is for the Department to produce evidence in this regard, which has not been done.
7. In view of the above discussion, we hold that the impugned order is not sustainable. The same is set aside. The appeal is allowed.
S.K. Mohanty Rakesh Kumar
Member (Judicial) Member (Technical)
RITU