2002 (2) TMI 611 - AT - Central Excise

Summary

Issues:
Rectification of mistake application under Section 35C(2) of the Central Excise Act, 1944 against Final Order No. 1167/2001 allowing the appeal by the assessee.

Analysis:
The rectification of mistake application (ROM) was filed by Revenue against the Final Order No. 1167/2001, which allowed the appeal by the assessee. The order was based on the Supreme Court judgment in the case of Hindustan Polymers, stating that the value of drums supplied by buyers would not be loaded to the value of liquid glucose delivered unpacked in such drums. The Revenue argued that the manufacturer had another factory in Gujarat and was required to declare values under Section 4 for approval, but cleared liquid glucose at lower prices without filing amended declarations. The contention that sales were based on contract prices was challenged by the Revenue, stating that the Hindustan Polymers decision was not entirely applicable in this case.

The respondent's advocate argued that there was no mistake in the order and referred to Circular No. 34/85, which accepted oral contracts between the assessee and buyers. He also relied on CBR bulletin instructions regarding the determination of 'normal price' under Section 4(l)(a) when goods were sold at different prices to buyers of the same class. The advocate contended that these references did not support the Revenue's case.

The Tribunal found that the Final Order did not cover the aspect of removals at prices lower than declared to the same class of buyers. Referring to a Delhi High Court decision, an addendum was issued to the order, citing Circular 315/18/76-CX and Circular 34/85, which allowed oral contract prices subject to post-verification. The Tribunal concluded that no duty demands could be made on prices lower than those declared, and penalties under Central Excise Rules could be imposed for not filing amended declarations.

The consequence of the order was that the appeal against duty demands remained allowed. The ROM was allowed, and an addendum was issued to Order No. 1167/2001, incorporating the relevant legal references and conclusions.