2005 (3) TMI 673 - AT - Central Excise

Summary

Issues:
1. Whether the compensation received by the appellant from the Government should be added to the assessable value of the product.
2. Validity of the ex parte order rendered without considering relevant circulars.
3. Stay application regarding pre-deposit amount and penalty.

Analysis:

Issue 1:
The appellant, a PSU unit, sold Superior Kerosene Oil (SKO) at an administrative price fixed by the Government of India. The Revenue sought to include the compensation paid by the appellant to the Government in the assessable value of SKO. The appellant argued that as per Board's Circular No. 549/45/2000-CX.I, the compensation received need not be added to the assessable value. The Tribunal, after considering the Circular, ruled in favor of the appellant, stating that the compensation amount need not be added to the assessable value. The stay application was allowed, and no recovery of the amounts was permitted until the appeal's disposal.

Issue 2:
The appellant contended that the order was ex parte and did not consider the relevant Board's Circular, which clarifies that the sale value should be as per the administrative control price, and the compensation received need not be added to the assessable value. The Tribunal acknowledged the Circular's relevance and held that the appellants were not obligated to pre-deposit the amount in question or the penalty. The stay application was granted unconditionally, with no recovery of amounts until the appeal's final disposal.

Issue 3:
The department reiterated its contention, but the Tribunal, after careful consideration, relied on the Board's Circular to decide the matter. The Tribunal allowed the stay application without requiring the appellant to pre-deposit the amount and penalty. The Commissioner was directed to report on the Circular's applicability and acceptance. The case was scheduled for final hearing on a specified date.

In conclusion, the Tribunal's judgment favored the appellant, ruling that the compensation received from the Government should not be added to the assessable value of the product, as per the relevant Board's Circular. The stay application was allowed, and no recovery of amounts was permitted until the appeal's final disposal, ensuring procedural fairness and compliance with the Circular's provisions.