2001 (7) TMI 1135 - AT - Central Excise

Summary

Issues:
Waiver of deposit of duty and penalties, determination of assessable value based on price declared to the bank, correction of errors in the order by the Commissioner.

Waiver of Deposit of Duty and Penalties:
The judgment involves applications for the waiver of deposit of duty, penalty, and fine amounting to approximately Rs. 1.84 crores on the manufacturer and Rs. 18.4 lakhs under section 209A on the director of the manufacturer. Additionally, a corrigendum application to rectify the order of the Commissioner has been allowed. The duty is demanded on consignments of textured polyester yarn cleared by the manufacturer, where the department alleges that the price declared to the bank did not include duty. The manufacturer contends that the price declared to the bank was inclusive of duty, supported by the Commissioner's acceptance of this fact in her order. The Commissioner's subsequent corrigendum sought to change the assessable value by stating that the price was exclusive of duty, leading to skepticism by the Tribunal regarding the nature of these changes. The Tribunal, based on the evidence and inconsistencies, decides not to proceed solely on the original order but considers the corrigendum, thereby waiving the deposit of duty, penalty, and fine pending further assessment.

Determination of Assessable Value Based on Price Declared to the Bank:
The dispute revolves around the assessable value of consignments based on the price declared to the bank by the manufacturer. The Commissioner initially accepted that the price declared to the bank was cum-duty price, indicating that duty was included in the declared value. However, a subsequent corrigendum issued by the Commissioner sought to change this interpretation to state that the price was exclusive of duty. The Tribunal scrutinizes this change, highlighting inconsistencies and the likelihood that these alterations were not typographical errors but deliberate. The Tribunal opines that the prices declared to the bank should be considered as cum-duty prices, and duty should be deducted to determine the assessable value. This decision impacts the differential duty payable and the potential entitlement to a refund by the manufacturer.

Correction of Errors in the Order by the Commissioner:
The Tribunal questions the validity of the corrigendum issued by the Commissioner, suggesting that it alters the fundamental basis of the order and, therefore, may be considered a nullity in law. The Tribunal expresses skepticism regarding the nature of the changes made in the corrigendum, indicating that they were not mere clerical errors but intentional modifications. The Tribunal emphasizes that the corrigendum changes the entire basis for the assessment, thereby necessitating a reevaluation of the assessable value based on the prices declared to the bank. Consequently, the Tribunal waives the deposit of duty, penalty, and fine pending a reassessment considering the prices as cum-duty prices, potentially leading to a differential duty payment or refund for the manufacturer.