2010 (8) TMI 917 - AT - Central Excise

Summary

Issues involved: Application for waiver of pre-deposit and stay of recovery in respect of duty, penalty, and interest amounting to over Rs. 10.79 crores.

Summary:

Issue 1: Provisional assessment and valuation of petroleum products

The appellant, a manufacturer of petroleum products, faced a dispute regarding the valuation of goods removed from their refinery during the period from July 2005 to February 2008. The dispute arose due to a change in the assessment procedure by the appellant, where they computed duty based on the "normal transaction value" of the "greatest aggregate quantity" of goods sold from specific depots. The department alleged that the appellant contravened provisions of Section 4(1)(b) of the Central Excise Act by not considering the transaction value across all depots as a unit. The appellant argued that their interpretation of Rule 7 of the Central Excise (Valuation) Rules, 2000 was correct, citing relevant circulars and case laws. The appellant contended that the valuation should be based on the sale price prevalent at a particular depot for identical goods stock-transferred from the factory to that depot.

Issue 2: Allegation of suppression of facts and time-bar

The department issued a show-cause notice invoking the extended period of limitation for recovery of differential duty, alleging suppression of material facts by the appellant with intent to evade payment of appropriate duty. The appellant contested this allegation, claiming that all relevant information was provided to the department through correspondence. They relied on Supreme Court decisions to support their argument against the demand of duty and interest. The appellant also contested the proposal for penalty under Section 11AC of the Act.

Judgment:

The Tribunal found that the order passed by the learned Commissioner did not consider any of the submissions made by the appellant. The Tribunal decided to remand the case back to the Commissioner for a fresh decision, emphasizing the need for a speaking order that duly considers the contentions raised by the appellant. The impugned order was deemed to be vitiated by non-application of mind to the appellant's contentions. The Tribunal allowed the appeal by way of remand, requesting the Commissioner to pass a final order within three months from the date of receipt of the order, ensuring a reasonable opportunity for the party to be heard. The stay application was also disposed of accordingly.