Custom, Excise & Service Tax Tribunal
M/S Surya Kiran Engineering Works P. Ltd vs Cce, Noida on 3 November, 2009
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R. K. Puram, New Delhi COURT-III Date of hearing/decision: 3.11.2009 Excise Appeal No. 738 of 2006-Ex. Br. [Arising out of order-in-Appeal No. 160/CE/Appl/2006 dated 31.1.2006 passed by the Commissioner (Appeals), Central Excise, Noida] For approval and signature: Honble Shri M. Veeraiyan, Technical Member Honble Shri D.N. Panda, Judicial Member 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 Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? M/s Surya Kiran Engineering Works P. Ltd. Appellant Vs. CCE, Noida Respondent
Appearance:
Appeared for the Appellant Shri S.D. Gaur, Consultant Appeared for the Respondent- Shri S.R. Meena, SDR Coram: Honble Shri M. Veeraiyan, Technical Member Honble Shri D.N. Panda, Judicial Member Order No.___________________________ Per: M. Veeraiyan:
This Appeal is against the order of the Commissioner (Appeals), Noida dated 31.1.2006.
2. Heard both sides.
3. The Appellant is a manufacturer of fans which are notified under Section 4A by Notification No.5/2001-CE(NT) dated 1.3.2001 as amended. The Appellant, in addition to selling to various customers, supplied to Government Departments on the basis of DGS&D rate contract. In respect of such clearances also, the Appellant have affixed MRP in the retail packages. The original Authority held that the supply based on DGS&D contract has no nexus with MRP printed on the package and that the valuation should be done on transaction value in terms of Section 4 and accordingly confirmed demand of differential duty of Rs.21,683/- along with interest and imposed penalty of Rs.10,000/- on the Appellant. Commissioner (Appeals) upheld the order of the original authority.
4. Ld. Consultant for the Appellant submits that the issue as to whether, in respect of supplies made in terms of DGS&D contract, the valuation under Section 4A, is applicable has been settled by the decision of the Tribunal in the case of Purisons Engineers (P) Ltd. Vs. CCE reported in 2004 (164) ELT 417. In the said decision, it has been held that there is no sale taking place between the party and the DGS&D even though the rates and conditions are fixed by negotiation with DGS&D and that Section 4A valuation shall be inapplicable in such cases.
5. Ld. SDR reiterated the findings of the Commissioner (Appeals). He also relies on the decision of the Tribunal in the case of Grasim Industries Ltd. Vs. CCE reported in 2004 (175) ELT 779.
6. We have carefully considered the submissions from both sides. The decision of the Tribunal in the case of Grasim Industries Ltd. (supra) relates to sale to special category of customers. However, the decision in the case of Purisons Engineers (supra) directly relates to the supplies made under DGS&D contract. In the said case, the Appeal of the party has been allowed with the following findings:-
We find merit in the contention raised by the appellant. If the nature of the transaction between the appellant and DGS&D is properly understood, then there cannot be any doubt regarding applicability of Section 4A on the facts of this case. The negotiation and the arrangement arrived at between DGS&D and the appellant relate only to rate and other conditions regarding sale. The sale is effected directly to different departments in respect of each piece of air conditioner. The ratio of the decision in Bharti Systel Ltd. V. CCE, Chandigarh, 2002 (145) ELT 626 (Tribunal) cannot be of any application in the present case since there it was admitted that the sale of telephone instruments to DOT and MTNL was in bulk. They were distributing each instrument to the subscriber without transferring the ownership but on rental basis. Therefore, there was no question of any retail sale involved in the transaction. It was under these circumstances we took the view that Section 4A has no application in that case. But in the present case there is retail sale to different departments. Therefore the provisions of Section 4A will be directly applicable.
7. Inasmuch as the case of the Appellant is identical to the case in Purisons Engineers (supra), we allow the Appeal of the party with consequential relief, as per law.
(Dictated & pronounced in open Court) (M. VEERAIYAN) TECHNICAL MEMBER (D.N. PANDA) JUDICIAL MEMBER RM