2002 (10) TMI 438 - AT - Central Excise

Summary

Issues:
1. Dispute over deductibility of post-manufacturing expenses, including commission paid to agents.
2. Challenge of High Court's finding by the department before the Supreme Court.
3. Issuance of show cause notices seeking recovery of duty and disallowance of deemed Modvat credit.
4. Commissioner's decision disallowing deduction claimed by the assessee.
5. Comparison of terms in agreements before High Court and during the present dispute.
6. Assessment of whether the assessees are covered by the previous judgment.

Analysis:
1. The case involved a dispute between M/s. Raymond Limited and the excise department regarding the deductibility of certain post-manufacturing expenses, specifically commission paid to agents, from the assessable value. The High Court, in a previous judgment, allowed the deduction of commission paid to agents as it was ascertainable prior to the goods' removal and was part of the agency agreement.

2. The department challenged the High Court's finding before the Supreme Court, which dismissed the appeal and upheld the deductions allowed by the High Court. However, later assessments were kept provisional, leading to the issuance of show cause notices seeking recovery of duty and disallowance of Modvat credit.

3. The jurisdictional Commissioner disallowed the deduction claimed by the assessee, citing different facts from those considered by the High Court earlier. The Commissioner confirmed the demand and imposed penalties, prompting the appeal and the present application.

4. The counsel demonstrated that the terms in the agreements before the High Court's earlier case and during the present dispute were the same. The Commissioner (Appeals) also noted that the facts had not changed, and the High Court's judgment allowing deductions for commission to agents was applicable to the present situation.

5. The Tribunal observed that the assessees continued to be covered by the previous judgment of the High Court upheld by the Supreme Court. As the conditions were similar, the Tribunal granted the waiver of pre-deposit of credit and stayed the recovery during the appeal's pendency, emphasizing that if there were any wrong claims, the department could address them in court.