2003 (10) TMI 568 - AT - Central Excise

Summary

Issues:
1. Application for stay of the impugned order of the Commissioner (Appeals) based on a strong prima facie case.
2. Rejection of transaction value, redetermination of value under Rule 6b(ii) of Central Excise Valuation Rules, demand for differential duty, and imposition of penalties.
3. Allegation of selling a product at a lower price than the cost of production leading to undue hardship if required to deposit the duty and penalty.

Analysis:
1. The appellant sought a stay of the order of the Commissioner (Appeals) due to a strong prima facie case. The Commissioner (Appeals) had confirmed the demand for duty and imposition of penalties. The appellant argued that the rejection of transaction value and redetermination under Rule 6b(ii) was unjustified. The appellant contended that selling a product at a lower price does not imply wrongdoing, especially when all products involved carry the same rate of Central Excise duty. The appellant relied on legal precedents to support their case and highlighted the potential undue hardship of depositing the duty and penalty.

2. The case revolved around the rejection of transaction value by the department, which alleged that the appellant was selling a product below the cost of production. The department demanded a differential duty and imposed penalties based on this premise. However, the Tribunal noted that there was no evidence of financial flow back from buyers to the appellant. The Tribunal found that the appellant had made a strong prima facie case in their favor. As a result, the Tribunal decided to waive the pre-deposit of duty and penalty, staying the recovery pending the appeal's disposal.

3. In the absence of evidence showing any financial benefit to the appellant from selling the product at a lower price, the Tribunal found the department's case solely based on the selling price being lower than the cost of production. The Tribunal acknowledged the appellant's argument regarding the uniform Central Excise duty rate on all products involved. Considering the appellant's strong prima facie case and the potential undue hardship of depositing the duty and penalty, the Tribunal decided in favor of granting a stay on the recovery pending the appeal's resolution.