2002 (11) TMI 508 - AT - Central Excise

Summary

Issues:
Whether there can be two prices for the sale of a product to the same buyer for assessment under the Central Excise Act, 1944.

Analysis:
1. The appellant, engaged in manufacturing front axle assembly, supplied goods to M/s. Maruti Udyog Ltd. (MUL) for original equipment (OE) requirement at a lower price compared to spares requirement. The Revenue alleged short-levy, considering the price for spares as the normal price for excise duty assessment. A corrigendum was issued increasing the duty proposed.

2. The assessee argued that sales to MUL for OE and spares were at different commercial levels, a common trade practice in India and internationally. They contended the demand was time-barred and supported their pricing with documents. The adjudicating authority rejected these contentions, confirming the demand and imposing penalties.

3. The appellant challenged the decision, arguing that sales to MUL for OE and spares constituted different commercial levels. They cited precedents supporting multiple prices for the same buyer. The Revenue claimed there was suppression of facts justifying the extended limitation period.

4. The Tribunal noted that sales to MUL were based on different purchase orders for OE and spares, with over 90% for OE. It was questioned if two assessable values could exist for goods supplied for OE and spares. The Tribunal found no evidence of the appellant and MUL being related or additional consideration beyond invoice prices.

5. The Tribunal held that excise duty assessment should be based on the normal price for wholesale trade unless the buyer is related or price is not the sole consideration. The appellant's case on limitation was accepted, as all relevant information was provided to the department, refuting the allegation of suppression of facts.

6. Ultimately, the Tribunal ruled in favor of the appellant, setting aside the Commissioner's order. The demand was deemed unsustainable on both merit and limitation grounds, leading to the appeal's allowance. The judgment highlighted the permissibility of different prices for the same buyer based on commercial levels and the importance of considering all relevant facts in excise duty assessments.