2011 (7) TMI 357 - AT - Central Excise

Assessable value - Demand of differential duty on the ground that the price adopted for clearing the balance stock lying with the assessees after they ceased to have the right to use brand name Banish , was less than the price adopted by the assessees from their depot during the period when they had the right to use the brand name - Held that - the choice of the assessees regarding unused quantity of insecticides bearing the brand name was either to destroy the goods or to sell them to the buyer and therefore the assessees sold at a lower rate - It is not the case of the department that the lower price at which the goods were sold to independent buyer was not genuine and therefore the price adopted for the earlier sale, when the assessees had the right to use the brand name, is the nearest ascertainable assessable value, is not justified - Decided in favour of assessee.

Summary

Issues:
1. Differential duty demand based on price difference for clearing balance stock after brand name assignment.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI involved a challenge regarding a differential duty demand of Rs.2,16,029/- due to the price adopted for clearing balance stock after the transfer of the brand name "Banish." The brand name was assigned to another party, and the appellant had to clear the remaining stock at a lower price compared to when they had the right to use the brand name.

Upon hearing both sides, the Tribunal noted that the buyer was a wholesale dealer and manufacturer with the right to use the brand name "Banish." The authorities had contended that the price adopted by the appellant was not the normal price. However, the Tribunal found this argument legally unsustainable as there was no evidence that the sale was not in the normal course of business or that the buyer was related to the appellant. The Tribunal highlighted that the appellant's decision to sell the remaining stock at a lower rate was a choice between destruction or sale, and there was no indication that the lower price was not genuine.

In light of the above discussion, the Tribunal accepted the appellant's contention that the price adopted by them was the normal price. Consequently, the impugned order was set aside, and the appeal was allowed. The operative part of the order was pronounced in open court on 5.7.2011.

This judgment clarifies the concept of normal price in the context of differential duty demand based on price differences for clearing stock after a brand name assignment. It emphasizes the importance of assessing whether the price adopted by the appellant was genuine and normal in the given circumstances, ultimately leading to the decision in favor of the appellant based on the facts and legal principles presented during the hearing.