2004 (6) TMI 384 - AT - Central Excise

Summary

Issues:

1. Claim of deduction of equalised freight in respect of depot sales.
2. Applicability of Supreme Court decisions on assessable value.
3. Legitimacy of the appellant's claim for deduction.

Analysis:

Issue 1: Claim of deduction of equalised freight in respect of depot sales
The appellants, engaged in the manufacture of PVC pipes and fittings, filed declarations for the sale of goods from their factory gate and depots. They claimed a deduction of 4% on equalised freight for depot sales, lowering the assessable value. The original authority rejected this deduction, citing the need to adopt the factory gate sale price for depot sales based on a Supreme Court decision. The Commissioner (Appeals) upheld this decision, leading to finalization of assessments and raised demands. The Tribunal found the appellant's claim for deduction in depot sales justified, even though the deduction was not claimed for factory gate sales. The matter was remanded for further examination by the original authority.

Issue 2: Applicability of Supreme Court decisions on assessable value
The appellant relied on a Supreme Court decision in the case of Bombay Tyre International Ltd., asserting their entitlement to deduct equalised freight to determine the correct assessable value under Section 4. The Tribunal acknowledged this entitlement and distinguished it from the precedent cited by the lower authorities. The appellant's failure to claim the deduction for factory gate sales did not preclude them from claiming it for depot sales, as the assessable value would have been the same at the factory gate.

Issue 3: Legitimacy of the appellant's claim for deduction
The Tribunal noted that the appellant's claim for deduction of equalised freight in depot sales was valid, emphasizing that the failure to claim the deduction for factory gate sales did not affect the legitimacy of the claim for depot sales. The matter of claiming deduction from factory gate sale price was not under consideration in the appeal. The appellant clarified they were not seeking relief for factory gate sales due to finalized assessments. The Tribunal allowed the appeal by remanding the case for further adjudication, focusing on the deduction claim for depot sales.

In conclusion, the Tribunal upheld the appellant's claim for deduction of equalised freight in depot sales, emphasizing the distinction between factory gate and depot sales assessments. The matter was remanded for detailed examination by the original authority, ensuring a fair assessment based on the observations made by the Tribunal.