2005 (2) TMI 554 - AT - Central Excise

Summary

Issues:
- Determination of assessable value of Ethyl Alcohol Denatured under Section 4 of the Central Excise Act.

Analysis:
The appeals filed by M/s. Kisan Sahkari Chinni Mills Ltd. raised the issue of determining the assessable value of Ethyl Alcohol Denatured under Section 4 of the Central Excise Act. The Appellant argued that the price charged by them to M/s. Vam Organic Chemicals Ltd. should be considered the normal price under Section 4(1)(a) of the Act, as the prices were fixed by the Federation to which they belonged. They contended that the buyer was not a related person, and therefore, the price at which the goods were sold should be used for assessment purposes. The Commissioner had enhanced the assessable value based on the price charged by another entity, M/s. Oudh Sugar Ltd., during the same period. The Appellant emphasized that the price was the sole consideration for the sale, citing relevant Tribunal decisions to support their argument.

In response, the Departmental Representative argued that the price fixed by the Federation was not a result of independent negotiation between the buyer and seller but an arrangement between the Federation and the buyer. It was contended that the price at which the goods were sold was not genuine, as evidenced by another unit of the Federation selling the same product to an independent buyer at a higher rate during the same period. The Departmental Representative asserted that the assessable value should be determined following the Central Excise (Valuation) Rules, 1975, as the price was not reflective of a genuine sale between independent parties.

Upon consideration of the arguments presented, the Tribunal examined Section 4 of the Central Excise Act in force at the relevant time, which deemed the value of excisable goods to be the normal price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade. The Tribunal noted that the Appellants had indeed sold the goods at a specific rate, and there was no evidence to suggest that the price was not the sole consideration for the sale. Additionally, there was no indication that the buyer, M/s. Vam Organics Chemicals, was a related person as defined in the Act. Consequently, the Tribunal found that Section 4(1)(a) applied, as the price was the sole consideration and the buyer was not a related person. Therefore, the Tribunal set aside the impugned orders, ruling in favor of the Appellants and allowing the appeals.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal principles applied by the Tribunal, and the ultimate decision reached regarding the determination of the assessable value of Ethyl Alcohol Denatured under the Central Excise Act.