2010 (9) TMI 793 - AT - Central Excise

Assessable value - when a factory gate price is available for the goods that should be adopted and the question of depot price at which the goods were sold from the consignment agent premises cannot adopted - Held that - amendment to Section 4 by which the premises of consignment agent is also a place of removal orders upheld and appeals dismissed

Summary

Issues:
1. Competence of the Superintendent to issue show cause notices beyond six months.
2. Determination of excise duty based on factory gate price versus consignment agent's selling price.

Analysis:

Competence of the Superintendent:
The judgment addressed the issue of the competence of the Superintendent to issue show cause notices beyond six months. The appellants contended that the notices were issued beyond the six-month period by an incompetent authority. However, the Tribunal found no merit in this argument. It was noted that while the notices did cover periods exceeding six months, the actual demand for duty was confined to the permissible period. In one case, the demand was within the six-month limitation period, as the notice was received by the assessees within the normal period for filing returns. Therefore, the Tribunal rejected the challenge regarding the competence of the Superintendent to issue notices beyond six months.

Determination of Excise Duty:
Another crucial issue in the judgment was the determination of excise duty based on the factory gate price versus the consignment agent's selling price. The appellants argued that the duty should be calculated based on the factory gate price of the goods, rather than the price at which the goods were sold from the consignment agent's premises. However, the Tribunal disagreed with this contention. It highlighted the amendment to Section 4 of the Central Excise Act, which expanded the definition of "place of removal" to include premises of consignment agents. Consequently, the selling price at any place of removal, including consignment agents, was considered the normal price for levying excise duty. As a result, the Tribunal upheld the demand for duty and penalties imposed on the appellants, dismissing their appeals.

In conclusion, the judgment by the Appellate Tribunal CESTAT, Chennai addressed the issues of the competence of the Superintendent to issue show cause notices beyond six months and the determination of excise duty based on the consignment agent's selling price. The Tribunal ruled in favor of the tax authorities, upholding the demand for duty and penalties imposed on the appellants.