2010 (2) TMI 604 - AT - Central Excise

Waiver from the requirement of pre-deposit of duty demands along with interest - valuation of the parts of the pressure cookers - for the purpose of determining assessable value, are covered by the provisions of Section 4A ,the parts of the pressure cookers are assessed to duty on the value determined under the main Section 4 of the Central Excise Act, 1944 - At the time of removal of pressure cooker parts to depots they paid duty on price equal to declared MRP 35% - Department view that since the goods were being sold from the depots and the appellant have not produced any evidence as to at the time of removal they are liable to pay duty on the price mentioned in the invoices for removal from the factory without any abatement Held that - - pre-deposit of duty demands, interest and penalty is waived for hearing of these appeals and recovery thereof stayed till the disposal of these appeals. The stay applications are allowed.

Summary

Issues: Valuation of pressure cooker parts for Central Excise Duty assessment, waiver from pre-deposit of duty demands, interest, and penalty, stay on recovery till appeal disposal.

Valuation of Pressure Cooker Parts:
The dispute revolved around the valuation of pressure cooker parts for Central Excise Duty assessment. While pressure cookers were assessed based on declared MRP with permitted abatement, parts of the pressure cookers were assessed under Section 4 of the Central Excise Act. The appellant cleared parts to depots for sale, paying duty on MRP less 35%. The Department contended that duty should be paid on the invoice price without abatement as goods were sold from depots. The Commissioner upheld the duty demands, penalties, and interest imposed by the Joint Commissioner, despite evidence presented by the appellant regarding discounts given to buyers from depots. The Tribunal observed discrepancies in the Commissioner's reliance on a Range Officer's report received post-hearing, without giving the appellant an opportunity to respond adequately.

Waiver from Pre-deposit of Duty Demands:
The appellant sought a waiver from the pre-deposit of duty demands, interest, and penalty for the appeal hearings. The appellant's counsel argued that discounts given to buyers from depots were reflected in invoices, reducing the assessable value. The Department opposed the waiver, citing the Commissioner's findings. However, the Tribunal, after considering submissions from both sides and examining the records, found merit in the appellant's plea. The Tribunal noted that the Department's insistence on charging duty on MRP without considering discounts and taxes was not prima facie correct. Consequently, the Tribunal waived the pre-deposit of duty demands, interest, and penalty, allowing a stay on recovery until the appeal's disposal.

Conclusion:
The Tribunal granted the waiver from pre-deposit of duty demands, interest, and penalty for the appeal hearings due to the prima facie merit in the appellant's case. The Tribunal highlighted discrepancies in the Commissioner's decision and the lack of opportunity given to the appellant to address post-hearing reports. The decision emphasized the importance of considering discounts and taxes in determining the assessable value, indicating a favorable stance towards the appellant's arguments.