2008 (7) TMI 746 - AT - Central Excise

Summary

Issues:
1. Valuation of goods sold in retail - Abatement claim of 28% from retail price.
2. Consideration of expenses on advertisement, sales promotion, and bad debts as retail expenses.

Analysis:
1. Valuation of goods sold in retail - Abatement claim of 28% from retail price:
The appellant, engaged in manufacturing photocopiers, claimed abatement at 28% of the retail price to determine the value, citing similarity with a competitor's marketing pattern. The original authority and Commissioner (Appeals) disallowed the claim, stating lack of relevant details and reliance on a competitor's case without substantiation. The appellant argued for the 28% discount based on precedents and a 1975 Board clarification on retail goods valuation. The Tribunal examined CBEC instructions, emphasizing the need for suitable deductions based on the margin of difference between assessable and retail values of comparable goods. It noted the appellant's blind demand for 28% abatement without adequate evidence, contrary to the guidelines. The Tribunal set aside the previous orders, directing the appellant to submit evidence for reconsideration by the original authority, stressing the need for a proper evaluation based on guidelines.

2. Consideration of expenses on advertisement, sales promotion, and bad debts as retail expenses:
The Commissioner (Appeals) disallowed expenses on advertisement, sales promotion, and bad debts as retail expenses, treating them as part of manufacturing costs. The appellant contended that their product and marketing pattern were akin to a competitor, justifying the claimed abatement. However, the Tribunal found the appellant's reliance on competitor's abatement without detailed justification insufficient. It highlighted the need for a comprehensive assessment of retail expenses and proper consideration of the margin of difference between retail and assessable values. The Tribunal allowed the appeal for remand, emphasizing the importance of substantiated claims and adherence to valuation guidelines for retail goods.