2007 (6) TMI 21 - AT - Central Excise

Valuation(Central Excise) Department declaring that the depot as a place of removal and hence the impugned goods are required to be assessed at a higher price at which they have sold from depot and accordingly demand was made Held department contention is not correct

Summary

Issues:
1. Interpretation of law regarding the assessment of goods sold from a depot at a higher price post-amendment.
2. Validity of demand raised by the Original Authority and subsequent appeal by the Department.
3. Consideration of clearances made from the factory before the legal change in assessing duty on goods sold from the Depot.

Analysis:

1. The case involved a dispute over the assessment of goods sold from a Depot at a higher price following an amendment to the law. The Respondents sold the goods between 29-9-1996 to 31-10-1996 at a price higher than the one used for paying Excise duty. The Department contended that the amendment declared the depot as a place of removal, necessitating assessment at the higher selling price from the Depot.

2. The Original Authority confirmed the demand raised by the Department, which was subsequently challenged by the Respondents in appeal before the Lower Appellate Authority. The Lower Appellate Authority set aside the demand, prompting the Department's appeal. The Department argued that the law amendment required assessing the goods at the higher selling price from the Depot.

3. The Lower Appellate Authority found that the goods were cleared from the factory before the legal change, and thus, the duty paid based on the factory gate sale did not need adjustment. The Respondents supported this by providing a detailed statement showing all goods were cleared before the legal change, with the last clearance from the factory on 30-8-1996. Furthermore, a Circular dated 29-9-1996 clarified that clearances from the factory before the legal change should be assessed at the prevailing factory gate sale price.

In conclusion, the Tribunal upheld the Lower Appellate Authority's decision, noting that the clearances occurred before the legal change, and therefore, the duty assessment based on the factory gate sale price did not require modification. The Department's appeal was rejected, affirming the assessment based on the pre-amendment factory gate sale prices.